by Jeffrey McKinney
February 10, 2024
Despite economic hardship, Black women pushed to form businesses during the pandemic.
A silver lining has emerged from the devastating COVID-19 pandemic, allowing Black women entrepreneurs to succeed faster than some of their peers.
The 38-page report says: 2024 Wells Fargo Women-Owned Business Impact Report; This work is narrative because it shows how black women can start or expand businesses when given new opportunities. For example, we implemented a targeted grant program during the pandemic, which resulted in a significant increase in revenue. This could be a game-changer for women, who have historically been largely left out of the entrepreneurial ecosystem. The aid comes amid a recent backlash against companies providing funding to businesses with Black women-owned businesses.
Driven primarily by black entrepreneurs, the proportion of women-owned businesses across all sectors increased by nearly twice that of men-owned businesses from 2019 to 2023, the report said.
At the same time, the report does not address the issues facing black women business owners. These include closing the business, struggling with obstacles to raising sufficient capital, and the need to generate profits on par with other small business competitors.
While this report highlights the many victories of Black women entrepreneurs, it also pinpoints where further progress is needed to help them overcome barriers and achieve future success. . The following numbers reflect what happened from 2019 to her 2023.
- Despite economic hardship, Black women pushed to form businesses during the pandemic. Black women's businesses have increased to nearly 2.1 million, making up about 15% of all women-owned businesses. Black women in business were the only demographic with a greater share of businesses owned than their male peers (52.1%). She had 528,000 employees and sales totaling $98.3 billion.
- Black women’s businesses have rebounded better than they did during the 2008 financial crisis. In 2023, revenue increased nearly 33% to $47,300, compared to an 11.2% increase for all women-owned businesses to $192,600. Black women-owned businesses are overrepresented in industries such as restaurants and retail, and many have been hit hard by the pandemic lockdowns. Black women business owners have limited financial resources due to their small size and low profitability.
- Revenues for Black women entrepreneurs increased by nearly 50%, compared to about 26% for women-owned businesses overall and about 24% for Black male-owned businesses. The number of Black women-owned businesses increased by about 13%, slightly less than the number of women-owned businesses overall and slightly more than businesses run by Black men.
- In 2023, businesses owned by white men generated nearly 16 times the average revenue of black women ($754,000). Interestingly, the report shows that if Black women-owned businesses were able to reach that revenue level, it would add an additional $1.5 trillion in revenue to the nation's economy.
So what is the call to action? Permanence of grant programs, more exposure from the public and private sectors, and greater entry points to capital will help Black women continue to thrive and become bigger players in their fields. Observers argue that this is one way that it could help people become more effective.
This report demonstrates the value of pro bono programs, such as the Milestone Circles program, that help women build networks that connect them to funding and partnership opportunities.
Geri Stengel, Founder and President of Ventureneer, is dedicated to researching issues that hinder minority and women entrepreneurs. black companies Please contact us via email to discuss the report's findings. Her company, along with Core Women and Women Influencing Public Policy, partnered with Wells Fargo on this report.
Familiar: What are the biggest takeaways, pros and cons of this report for Black women entrepreneurs?
Stengel: Black women face systemic disadvantage when starting and growing businesses due to wide pay disparities and limited access to financial resources and support. In 2019, women-owned businesses rebounded from the financial crisis and exceeded their average pre-crisis profit levels. However, businesses owned by Black/African American women did not see a similar recovery. However, during the COVID-19 pandemic, when capital, training, mentorship, and business development opportunities are made available through supplier diversity programs, Black/African American women-owned businesses' average revenue is lower than other companies. increased more than any other group.
Familiar: Why is there such a huge disparity between the incomes black women small business owners collect and their white male counterparts?
Stengel: Black women face systemic disadvantage when starting and growing businesses due to wide pay and wealth disparities and limited access to capital. As a result, you are more likely to be a side-entrepreneur with a lower average income than a full-time entrepreneur.
Familiar: Black women-owned businesses reportedly close at a higher rate than their peers. What is causing the problem and how can we stop it?
Stengel: Restricted access to capital can result in operational challenges, cash flow issues, and reduced flexibility in adapting to economic changes such as COVID-19, which can impede business growth. . This highlights the need to address racial wealth disparities and provide greater support and resources to Black/African American women entrepreneurs.
Familiar: Accessing capital remains an ongoing challenge for Black women entrepreneurs, who often have to rely on personal savings or credit cards to finance their start-up or expansion. What programs or resources would you suggest we consider for assistance?
Stengel: Community Development Financial Institutions are local, mission-based financial institutions that provide affordable financing and technical assistance to underrepresented entrepreneurs. Find small businesses in your area using the Wells Fargo Small Business Resource Navigator. Grants are lower than they were during the pandemic, but you can still do regular keyword searches and set up Google alerts to let you know when new opportunities become available. Kiva is a type of crowdfunding that allows you to raise interest-free loans. IFundWomen Crowdfunding through platforms like Indiegogo and Kickstarter is an opportunity to raise money from a crowd and increase awareness of your product or service.
When Val Jones, Wells Fargo's Women in Small Business leader, reviewed the data in the report, she was inspired by the remarkable progress Black women have made.“Businesses led by Black women have undoubtedly had a positive impact on our economy and helped our country recover from the pandemic. “This is a testament to their resilience and the breadth and depth of support they are receiving and must continue to receive from government agencies, banks, businesses and charities,” she said. “But while these achievements are impressive, this is by no means the end point. Much progress still needs to be made to continue to level the playing field for Black women entrepreneurs.”
