Black women were among the fastest-growing entrepreneurs—then Covid arrived by ruthumohnews
“There’s this assumption that entrepreneurship is a tech startup that’s venture-capital-funded because we see so much about Mark Zuckerberg and Elon Musk. People discount informal entrepreneurship and part-time business creation, which creates a narrow view of entrepreneurship,” says Donna Kelley, who has led research on the rate of Black entrepreneurship and serves as a professor of entrepreneurship at Babson College.
The lack of access to capital also dictates, in part, to which industries Black women flock. “If you don’t have the personal resources to get your business up and running, you may pick businesses that are easy to get off the ground, but that are crowded with competition for similar products and services, and less opportunity for differentiation,” Kelley says.
“That was my saving grace. If I hadn’t received that mortgage break, I’m afraid I’d be out of business,” says the Raleigh, North Carolina, resident. “We usually have far under three months of runway. Without the PPP loan, we would have had to lay people off and not take a salary,” says Yvette Richardson, one of the company’s four partners, three of whom are Black. Access to capital is a major predictor of business success and Black entrepreneurs find it difficult to weather economic duress, reach scalability and pivot away from unsustainable business models without financial backing.
“This data lays bare the structural inequities Black people face and that’s born out in their entrepreneurial endeavors,” Pompey says. Already, Covid-19 has shuttered 41% of Black-owned businesses, compared to just 17% of white-owned businesses. However, many small businesses aren’t easily adaptable without a massive infrastructure overhaul, which requires a significant financial investment. And most Black and women-led businesses only have a few weeks to a month of cash flow.
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