By Robert Stitt
African American women now account for 30 percent of all businesses owned by women, which amounts to 14 percent of all U.S. businesses (1.3 billion). According to Black Enterprise, this makes Black women the “fastest-growing entrepreneurs in the nation, starting businesses at six times the national average.” On average, Black-women-owned businesses generate $52.6 billion in annual revenues.
One of the factors that makes this accomplishment truly spectacular is that Black women tend to have less startup capital than their male counterparts. According to a national report by the group Digitalundivided “Black women startup founders raise only $36,000 on average, whereas white males typically raise over $1 million in startup capital. In the past few years, Black women received just .02% of funding.” In addition to having less financial backing from private investors, Black women tend to have less access to mentoring and professional networks as well.
Other notable differences include the types and locations of businesses. Many female businesses are home-based or involve services while the men tend to prefer the contracting and construction fields. Many Black women prefer to start their businesses in larger cities like Washington, D.C. and New York, New York, two of the cities with the most African-American-woman owned businesses.
In addition to the number of entrepreneurial endeavors started by African American women, the new businesses have also increased the number of employment opportunities in the country. Amanda Brown is the executive director of the National Women’s Business Council, she notes, “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.” Black Enterprise put the number of employees at just under 300,000.
Over the last two decades, how do Black-women-owned businesses compare to women of other nationalities? Business owned by African American women increased 322 percent, while Latina-owned firms grew by 224 percent and Asian-owned businesses nearly tripled.