By: Dr. Tammira Lucas, Assistant Professor, Coppin State University and Omar Muhammad, Director of Entrepreneurial Development & Assistance Center (EDAC) Morgan State University

Introduction

Women entrepreneurs often encounter significant challenges, including balancing work and personal life, facing stereotypical prejudices, and combating the fear of failure. Access to funding remains particularly difficult due to gender-based biases and underrepresentation in decision-making roles. Government policies play a crucial role in supporting women entrepreneurs by addressing these challenges and ensuring equal access to financial resources, tailored training programs, and supportive networks. This white paper explores the multifaceted challenges faced by Black women entrepreneurs, emphasizing legislative education, access to capital, network building, media engagement, and the importance of creating supportive systems for their professional growth (Farmiloe, 2023; Cheng, 2018; Hyman, 2023).
 

Background

For the past two decades, women-owned businesses have been the fastest growing segment in the U.S. economy, growing at twice the rate of all other businesses with 10.1 million women-owned businesses employing 13 million Americans and generating $1.9 trillion in annual revenues in 2008 alone. Additionally, there are now over four million minority-owned businesses across the country, accounting for over $591 billion in annual revenues (U.S. Senate Committee on Small Business & Entrepreneurship, n.d.).

Women entrepreneurs continue to be the backbone of our economy through business sustainability. However, women continue to lack the financial capital, government policies and human capital needed to grow their business revenue as much as their male counterparts. In addition to carrying the burden of the responsibilities at home, women also are over-represented among the smallest businesses in highly competitive low-margin markets and industries. In context, Women entrepreneurs play a significant role in producing jobs, wealth, poverty reduction, human development, education, health and nation’s development especially in developing countries. Women can be considered as the fastest growing entrepreneurs in the world (Brush and Cooper, 2012; Patil and Deshpande, 2018).

Women entrepreneurs often struggle with balancing work and personal life, facing stereotypical prejudices, and combating the fear of failure. These challenges include joining supportive communities, improving communication skills, and consistently showing up to work despite difficulties (Farmiloe, 2023). Other challenges women entrepreneurs face include accessing funding and overcoming gender bias. Securing venture capital remains particularly difficult due to gender-based biases and underrepresentation in decision-making roles. Additionally, societal expectations and stereotypes persist, complicating the balance between professional and personal responsibilities. Finding mentorship and networking opportunities is also a struggle, yet these are crucial for business growth and development (Cheng, 2018). Balancing work and personal life is particularly tough due to traditional caregiving roles that fall disproportionately on women. Additionally, women often struggle with self-promotion and fear of failure, which can hinder business growth. To overcome these hurdles, it's crucial for women to seek supportive communities, embrace mentorship opportunities, and confidently showcase their achievements (Hyman, 2023).

In 1988 The Women’s Business Ownership Act, also known as Public Law 100-533, was a landmark piece of legislation in the United States that aimed to promote and support women entrepreneurs. The goal of the act was to improve women-owned businesses access to capital by establishing Women Business Centers under the Small Business Administration. The act also was the catalyst to increase contracting with women-owned businesses within federal agencies by setting specific procurement goals and offering resources for women entrepreneurs to compete for government contracts. The Act authorized the establishment of Women's Business Councils to advise the President, Congress, and the SBA on issues related to women-owned businesses. The Women's Business Ownership Act of 1988 was a pivotal piece of legislation that laid the foundation for supporting and promoting women-owned businesses in the United States. Over time, it has led to the establishment of vital resources, increased funding, and policy adjustments to address the changing landscape of women entrepreneurship and continue fostering its growth.

Women entrepreneurs face significant obstacles, including limited access to financing and venture capital, which remains disproportionately low compared to male counterparts. Social and cultural factors, such as gender stereotypes and societal expectations, further complicate their entrepreneurial endeavors (Mittal, MR, Gupta, 2024). Targeted policies and initiatives are essential to ensure that the rapid increase in the number of women-owned businesses translates into sustained economic success and equity for all women entrepreneurs (American Express Open, 2014).

Government Policies

Government policies play a crucial role in supporting women entrepreneurs by addressing specific challenges they face. Implementing policies that ensure equal access to financial resources is essential, as funding remains a significant barrier for many women. Tailored training programs can provide women entrepreneurs with the skills and knowledge needed to succeed in competitive markets. Additionally, creating supportive networks and mentorship opportunities is vital for business growth, offering guidance and enhancing prospects. Policies promoting work-life balance, such as parental leave and flexible working hours, help women manage both business and family responsibilities effectively. A comprehensive policy framework that includes financial, educational, and social support can significantly bolster women’s entrepreneurship (ICSB, 2024). Government policies significantly impact women entrepreneurs, particularly in the realm of financial access. Women face greater difficulties in securing funding for business creation and growth compared to men. Traditional measures such as loan guarantees and grants are commonly used, while microfinance schemes are gaining traction, especially in Eastern Europe. Additionally, fintech innovations, including crowdfunding platforms and data-driven investment decisions, are emerging as tools to bridge the finance gap for women entrepreneurs. Increasing government investments and fostering networks of female investors are crucial strategies. Improved data collection on gender disparities is essential for effective policy making (Halabisky et al., 2023).

Access to Capital

Building capital is a critical aspect for minority and women entrepreneurs. Many face significant barriers to obtaining the necessary funding to start and grow their businesses. This lack of access to capital is often due to systemic biases in lending practices and a general lack of financial resources within these communities. The paper highlights that minority and women entrepreneurs tend to have lower levels of household wealth, which makes it more difficult for them to secure loans or attract investors (Barr, 2015). The State Small Business Credit Initiative (SSBCI) and the New Markets Tax Credit (NMTC) are two government programs proposed to address these challenges. The SSBCI, with a proposed reauthorization at $3 billion, aims to leverage private funding for small businesses. Meanwhile, the NMTC, which has already attracted over $60 billion in private investments, should be expanded to $5 billion annually and made permanent to provide a stable source of capital for minority and women entrepreneurs (Barr, 2015).

Women often encounter difficulties in securing funding compared to their male counterparts, which can impede the growth and sustainability of their businesses. This disparity is attributed to various factors, including gender biases in investment decisions and a lack of networks that provide financial opportunities. Statistics show that women receive less venture capital funding, which restricts their ability to scale their businesses effectively (AI Bees, 2023).

Network Building

In addition to capital, building strong business networks is crucial for success. These networks provide access to mentors, potential customers, and investors, which can significantly enhance business growth prospects. Minority and women entrepreneurs often lack access to such networks, making it harder for them to navigate the business landscape. Barr (2015) argues that these networks would help entrepreneurs connect with peers, gain valuable advice, and build relationships that can lead to new business opportunities. This approach aims to create a more supportive environment for minority and women entrepreneurs by fostering connections that are essential for business development (Barr, 2015).

Statistically, women are less likely to be part of business networks that could provide essential support and mentorship, impacting their professional growth and confidence. A lack of confidence is another prevalent issue, with women often underestimating their entrepreneurial abilities and success potential. Education and training programs specifically tailored to women can help bridge these gaps, but more systemic support is needed to ensure equitable opportunities in entrepreneurship (AI bees, 2024). Skill development is another critical area where minority and women entrepreneurs face challenges. Many lack access to training and education that can help them build the necessary skills to manage and grow their businesses (Barr, 2015).

Media Engagement

Seventy percent of women entrepreneurs feel their businesses are unfairly represented Wang (2024). Technology and media play pivotal roles in the growth of women-owned businesses globally. Access to digital tools such as mobile phones, tablets, and cloud services enables women entrepreneurs to manage their businesses more effectively and reach wider markets. Media representation and digital platforms also help in promoting their businesses, overcoming traditional barriers, and enhancing visibility. Studies show that technology boosts efficiency and connectivity, while media helps in building a positive public image, both of which are crucial for the success of women-owned enterprises (Alton, 2019).

Methodology

28 Black women entrepreneurs participated in the survey tool.

This white paper utilizes a qualitative research approach to explore the experiences and challenges faced by minority women entrepreneurs. The primary tool for data collection is a structured survey designed to capture in- depth qualitative insights

Survey Design

The survey was meticulously designed to include open-ended questions that allow respondents to provide detailed narratives about their entrepreneurial journeys. Questions focused on key areas such as access to capital, business networks, skill development, and specific barriers encountered.

Data Analysis

The collected qualitative data were analyzed using thematic analysis. Responses were systematically coded to identify recurring themes and patterns. This process involved multiple rounds of coding to refine categories and ensure the reliability of the findings. The analysis aimed to uncover nuanced insights into the specific challenges and strategies employed by black women entrepreneurs.

The survey tool consisted of 19 questions which included demographic questions. Some of the questions in the survey tool included:

  1. What industry do you operate in?
  2. How long have you been in business?
  3. What are your current annual sales?
  4. Where do you primarily conduct business?
  5. What are the main challenges and barriers you faced as a women entrepreneur in accessing capital and funding for your venture?
  6. How do you navigate the legislative landscape, and what specific obstacles do you encounter in complying with regulations and policies?
  7. What strategies do you employ to build influential networks and connect with key stakeholders and mentors in your industry?
  8. How do you engage with the media to promote your business(s) and overcome gender biases and stereotypes in media representation?
  9. What support systems and initiatives do you think are most effective in fostering an enabling environment as a women entrepreneur and nurturing your professional growth?
     

Findings

More than a decade ago, women-owned businesses were concentrated in just three industries. Now, half of all women-owned businesses (50%) are concentrated in four industries: other services (16.2%), professional, scientific, and technical services (14.4%), administrative and support services (11.9%), and healthcare and social assistance (11.3%). Specifically, in 2023, women owned 2,267,000 other services companies, 2,017,000 professional services businesses, 1,671,000 administrative services businesses, and 1,588,000 healthcare companies (Wells Fargo, 2024).

The women entrepreneurs in this study represented twenty-three different industries. The industries included:

  1. Crafts
  2. Association
  3.  Beauty
  4. Construction
  5. Event planning
  6. Engineering & Professional Service
  7. Fintech
  8. Fitness
  9. Food & Beverage
  10. Greeting card industry
  11. Healthcare
  12. Manufacturing
  13. Marketing
  14. Mental Health
  15. Notary
  16. Nutrition & Wellness
  17. Real Estate
  18. Training & development
  19. Travel Technology
  20. Veteran Organization
  21. Wedding Planning
  22. Ecommerce & Retail
  23. Pet sitting

Over 50% of the participants worked full-time in their businesses while 36% worked both part-time in their businesses and held a full-time job. Fourteen percent only worked part-time in their businesses. Black/African American women are driving business creation, but they also closed businesses at higher rates than other demographic segments (WIPP Education Institute, n.d.). Fifty-seven percent of the participants have been in business for five years or less, while 32% have been in business for 6-10 years, and only 11% have been in business for 15 years or more.

The thematic analysis of the responses from minority women entrepreneurs revealed several key challenges and barriers in accessing capital and funding for their ventures. One prominent theme is the lack of knowledge and education. Many respondents indicated difficulties in understanding where to find resources, how to build business credit, and the general lack of educational support available to them. This gap in knowledge extends to the complexity of navigating financial systems and the lack of tailored guidance for women entrepreneurs.

Access to resources and networks emerged as another significant barrier. Respondents highlighted the lack of transparent underwriting processes and the absence of networks that could provide support or mentorship. Many women reported that they lacked assets for collateral, networks for initial fundraising, and felt isolated without community support, particularly among veteran women entrepreneurs. The difficulty in meeting the requirements for funding and the prevalence of predatory lending practices further compounded these challenges.

Financial challenges are a recurring theme, with entrepreneurs struggling to secure grants and build solid cash flow projections. Many reported that the restrictions for start-ups and the high thresholds for funding often disqualified them from receiving necessary capital. Personal credit issues and the struggle to save enough money to leverage additional funds were also frequently mentioned.

Lastly, business operations and scalability issues were significant. Entrepreneurs faced challenges in hiring reliable staff, scaling their businesses, and feeling overlooked by grant opportunities that seemed oversaturated with applicants. Many expressed the need for marketing assistance and capital to grow their businesses but found it challenging to secure external funding due to a lack of established business models and reliable revenue streams.

Challenges in Legislative Education

The thematic analysis revealed that many women entrepreneurs face significant challenges due to a lack of knowledge and awareness about navigating the legislative landscape. Many respondents admitted they are still learning or unsure about how to find and comply with regulatory and compliance information. This gap in knowledge often leads to stumbling upon regulatory issues unexpectedly, which can be a significant obstacle. Additionally, there is a general sense of not having enough information or resources to fully understand and engage with the legislative requirements that impact their businesses.
On the other hand, some women entrepreneurs actively seek assistance and information to navigate these challenges. They reach out to peers, rely on information from educational institutions and professional associations, and stay updated on legislation through calls and emails. For those involved in government contracting, staying informed about local, state, and federal legislation is crucial. However, a portion of the respondents indicated that the legislative landscape has minimal impact on their business, either due to being in a business-friendly state or not yet encountering significant issues. Despite this, specific challenges such as keeping up with important changes, qualifying for certain programs, and obtaining Minority Business Enterprise (MBE) certification highlight the need for targeted support and resources to help women entrepreneurs better navigate the legislative landscape.

Building influential networks and connections

The thematic analysis of responses regarding strategies employed by women entrepreneurs to build influential networks and connect with key stakeholders and mentors reveals several key approaches. A significant number of respondents emphasized the importance of attending networking events, workshops, and industry-specific conferences. These events provide opportunities to meet potential partners, mentors, and key stakeholders, facilitating the exchange of information and support necessary for business growth. Additionally, many entrepreneurs participate in cohorts, accelerators, and community events to expand their network and stay updated with industry trends.

Building and maintaining relationships emerged as another crucial strategy. Entrepreneurs highlighted the value of constantly networking and leveraging personal connections and mutual contacts. This includes forming strong partnerships and engaging with small, often female-owned circles, both in person and online. Social media and online platforms also play a vital role, with respondents mentioning the use of LinkedIn and other digital spaces to share content, organize networking groups, and offer support within their industry. Personal approaches, such as using one's story and passion to attract individuals to their mission, and volunteering in the community, were also noted as effective strategies for building influential networks and connecting with key stakeholders.

Media Engagement

The thematic analysis reveals several strategies that women entrepreneurs use to engage with the media and promote their businesses while addressing gender biases and stereotypes. A prominent theme is the use of social media platforms, where many women actively share content, promote their businesses, and voice their passions. This approach allows them to maintain control over their narratives and reach a broad audience. However, some respondents noted the challenges of maintaining consistent social media activity, indicating a need for better management strategies or assistance.

Authenticity and confidence are also crucial elements in overcoming gender biases. Entrepreneurs emphasize the importance of showing up confidently and authentically, ensuring their presence is felt and recognized in the media. This includes not allowing stereotypes to influence their content and making a point to put their faces out there to build trust and recognition with their audience. Traditional media engagement, such as participating in commercials, radio shows, and public speaking at conferences, also plays a significant role. These avenues provide additional visibility and credibility, helping to combat stereotypes and showcase the entrepreneurs' expertise and achievements. Despite these efforts, many women still face significant challenges and express a need for more support and guidance in effectively engaging with the media.

Support Systems

The research indicated that effective support systems and initiatives for fostering an enabling environment for women entrepreneurs include strong networking and community support, mentorship and accountability partnerships, educational and development programs, and accessible resources. Participants highlighted the importance of connecting with other like-minded women and being part of small groups, think tanks, and accountability circles that provide mutual support and diverse perspectives. Mentorship programs, both formal and informal, are seen as crucial for professional growth, offering guidance, resources, and a safe space for discussing ideas and strategies.

Additionally, many women entrepreneurs find value in educational programs such as training, retreats, and conferences that offer opportunities for learning and development. Accelerator and incubator programs that provide not only initial support but also post-completion follow-up and opportunities to reconnect with peers are particularly beneficial. Access to funding, resources, and equitable environments where information is readily available and women can seek help without significant barriers is also essential for nurturing professional growth. Overall, a combination of community support, mentorship, educational opportunities, and resource accessibility forms the foundation of an effective support system for women entrepreneurs.

Proposed Solutions

BEAM (Black Entrepreneur Advancement Methodology): A Comprehensive Framework for Supporting Black Women Entrepreneurs

The BEAM (Black Entrepreneur Advancement Methodology) is a strategic framework designed to address the unique challenges faced by Black women entrepreneurs through a multifaceted support system. This methodology incorporates four key pillars—Pro Bono Accelerator Programs, Access to Capital Initiatives, Mentorship and Networking Programs, and Media Visibility and Advocacy Campaigns—to create an enabling environment for these entrepreneurs to thrive.

Conclusion

In conclusion, the challenges faced by Black women entrepreneurs are multifaceted and deeply rooted in systemic biases and structural barriers.

The insights gathered from this research underscore the need for comprehensive and targeted support systems that address these unique challenges. Legislative education, access to capital, network building, and media engagement are critical areas where interventions can have a significant impact.

Programs like pro bono accelerator services, targeted financial initiatives, and mentorship opportunities, coupled with equitable media representation, are essential to leveling the playing field for Black women entrepreneurs. By addressing these areas, we can foster a more inclusive and supportive entrepreneurial ecosystem that not only encourages the growth of Black women-owned businesses but also contributes to broader economic development and diversity.

Implementing the BEAM Methodology can serve as a transformative approach to empower Black women entrepreneurs, providing them with the tools, resources, and networks necessary to overcome barriers and achieve sustainable growth. The methodology's four key pillars—Pro Bono Accelerator Programs, Access to Capital Initiatives, Mentorship and Networking Programs, and Media Visibility and Advocacy Campaigns— offer a structured framework to tackle the most pressing challenges. By increasing access to expert services, financial resources, mentorship, and media visibility, we can enhance the entrepreneurial landscape for Black women and ensure their businesses thrive. It is crucial for policymakers, financial institutions, and community organizations to collaborate in these efforts, ensuring that Black women entrepreneurs receive the support they need to succeed and drive positive change within their communities.
 

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