Black women entrepreneurs have increased their presence in the microbusiness sector.
According to an entrepreneur survey by GoDaddy Venture Forward, which documented data from 6,000 small businesses across the United States and the United Kingdom, out of the 15% of U.S. microbusinesses owned by Black entrepreneurs in 2023, Black women-owned 68%.
Results in the U.K. were similar to those in the U.S. Out of the 5% of Black-owned microbusinesses, Black women-owned 60%.
Venture Forward, launched in 2018, collected the data as part of its 10th national survey.
“Most
of these businesses employ fewer than 10 people, classifying them as a microbusiness,” the report stated. “While they may be small, their economic impact is outsized even though they often don’t show up in traditional government statistics.”Marketing and access to capital were at the top of the list of challenges respondents faced when starting their businesses, according to the research initiative’s survey. According to the Harvard Business Review, Black women entrepreneurs face several challenges sustaining their businesses. The 2021 research found that access to capital and key resources vital for entrepreneurship were unevenly distributed in the U.S., “reinforcing the advantage of certain groups while impeding the entry and catching-up of disadvantaged groups.”
Companies such as JPMorgan Chase have committed to providing grants to support Black women entrepreneurs in scaling their businesses
and thriving in the entrepreneurial space. Goldman Sachs recently launched its 2023 One Million Black Women Cohort, an initiative that aims to address gender and racial biases that Black women have encountered for years.Grants tailored to Black women-owned businesses are helping bridge the funding gap and overcome racial biases. However, according to Forbes, Black women have also found success in entrepreneurship by acquiring existing businesses. With only 3% of Black women running mature businesses, buying and scaling established companies has presented more tremendous success.
“Instead of starting a company from scratch, purchasing an existing business is more affordable and less risky,” said Giac Capital CEO James Giacopelli. “Financially, you only consider actual profit and loss records instead of rough estimates. You get a clear history of previous sales to refer to. With a purchased business, you can also acquire valuable copyrights and patents. Finally, you can lead a declining business in the right direction with your creative ideas.”
Acquiring an affordable company offers Black women an advantageous option for launching their careers in entrepreneurship.
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