- Elizabeth Murray
A Spotlight on Black Women-Owned Businesses
Updated: Oct 25, 2020
Now more than ever, women are opening businesses and becoming their own bosses. Women start businesses five times more than the national average in the U.S., and eight out of ten new businesses are owned by women of color. According to Forbes the amount of female-owned businesses grew by 58% between 2007 and 2018. For black women, it was an impressive 164%. Black women make up about 35% of Black business owners, and about 2.4 million businesses in 2018 were owned by Black women. Black women are the fastest-growing entrepreneurial demographic and the only group to have more business growth than their male counterparts.
Even with these amazing strides, Black women still face many challenges when it comes to establishing their own businesses. According to CNBC, Black women reported that they struggled to receive credit. They were more likely to be denied loans and be charged high interest rates. Banks also give women of color different customer service. When the the National Community Reinvestment Coalition did a mystery shopper experiment with people of multiple races and genders, they found that black and Hispanic participants disproportionately received poor service. As a result, many relied on personal credit and savings to start their own businesses.
Covid-19 has not helped black businesses. The virus undoubtedly hit Black communities the hardest in almost every possible way. Most Black, woman entrepreneurs own small businesses, which notably took a huge hit after the economic fallout. The New York Times reported that 41% of Black small business-owners were out of work in April. These businesses also benefited less from the federal stimulus. Because they struggle to receive credit, Black-owned businesses typically don’t have traditional banking relations. As a result, only a quarter of them received any government aid.
In the wake of calls for racial justice, many people globally have wanted to support Black-owned businesses. Several major chains such as Sephora have signed the 15% Pledge, which commits major retailers to give 15% of their shelf space to Black brands to proportionately represent the black population in the U.S. Organizations such as Women in the Black and The Black Women Business Owners of America work to give Black women the networks and support to establish their own businesses.
As feminists, the best thing we can do is shop from Black women-owned businesses. Still, it may seem difficult to find them. Thankfully, businesses and nonprofits have developed a renewed resolve to support marginalized business-owners, making it easier for us to support Black women paving their path to success.