The number of businesses owned by minority women has increased from 1 in 6 in 1997 to 1 in 3 in 2015, per the 2015 State of Women-Owned Businesses Report commissioned by American Express OPEN.
While non-minority women-owned firms grew 40% over the 18-year time period, black women-owned firms grew 322% and Latina-owned firms grew 224%. Women now own 30% of all businesses in the U.S., accounting for some 9.4 million firms. And African American women control 14% of these companies, or an estimated 1.3 million businesses, employing 297,500 workers and generating $52.6 billion in revenue.
What’s more, studies show that women tend to create home-based micro businesses and personal service based businesses, while men starting businesses are entering construction and contracting fields. Washington, DC and New York, New York are reportedly two cities with high rates of black female entrepreneurship.
Black women are the fastest-growing entrepreneurs in the nation, starting businesses at six times the national average.
Despite such numbers, African American female entrepreneurs start their ventures with less funding then men. They also receive less money from private investors. In 2014, 36% of startups pitching to angels were women-led and 15% of these secured funding, while 24% of firms presenting were minority-led and of these 16% received angel investment, according to the Center for Venture Research at the University of New Hampshire.
In addition to access to capital, access to influential networks and mentors are challenges facing women entrepreneurs in growing their businesses.
“One of the most remarkable entrepreneurial trends in recent years is the phenomenal growth among black women. The number of firms skyrocketed. And employment and receipts are increasing too, but not nearly at the same rate. There’s a lot more to this story, and we’re excited to explore these important questions,” stated Amanda Brown, executive director, National Women’s Business Council.
Walker’s Legacy, a national women-of-color in business collective, has been contracted by the National Women’s Business Council and the SBA Office of Advocacy to conduct research that aims to identify the unique opportunities of black women business owners and entrepreneurs, and assess the unique challenges and barriers they face.
BY THE NUMBERS
30% of all U.S. businesses women now own
14% of all U.S. businesses controlled by black women
9.4 M Total number of firms owned by women
1.3 M Total number of firms owned by black women
297,500 Workers employed by black women-owned firms
$52.6 B Revenues generated by black women-owned firms
Source: The 2015 State of Women Owned Businesses Report