Issue: Vol. 9, No. 2

BY JUANITA WEAVER The Center for Women’s Business Research publishes the results of a groundbreaking three-year research study identifying 12 major barriers that women entrepreneurs of color face as they grow their businesses. Editor’s note: In early May 2008, the Center for Women’s Business Research is hosting a national symposium in Washington, DC, to present the first round of findings from the Center’s three-year study that focused on understanding the dynamics of the intersection of race, gender and entrepreneurship. This is the first in a series of articles that will report on the research findings.

"Why is there such a major disconnect between start-up and growth rates for businesses owned by African-American, Asian, Latina, and women of other ethnicities?”

That was the question that launched the Center for Women’s Business Research study on “women of color.” Consider this fact: Women of color start businesses at a rate five times greater than anyone else. However, once in business, their growth lags behind all other businesses.

The Center for Women’s Business Research, with the support of funds from 15 major corporations and women business owners groups and associations, designed a participatory action research strategy to uncover the barriers to growth of these firms. This research represents the most innovative and extensive work done in the area of race and gender in recent decades.

Women business owners of color make up a significant proportion of our economy. Improving their performance and making it possible for them to realize their full potential makes economic sense. As of 2006, there were 2.4 million firms owned by women of color. They generated $230 billion in revenues and employed 1.6 million people. They represent 23 percent of all women-owned firms and 36 percent of all minority-owned businesses.

	Gail Warrior-Lawrence (left) and Dr. Faye E. Coleman, are two of the outstanding women entrepreneurs who participated in the research project.

The findings represent a roadmap for moving forward. They highlight a deficit in access to financial, human, and social capital, as well as the less than optimal support in the community and national business environments. Many of the barriers facing women of color who seek to grow their businesses have been previously identified. What the research shows is that the programs and policies that are currently in place are not working well enough. These barriers still exist and are limiting, not only the personal prosperity of the business owners, but the prosperity of our communities and our nation.

Of the 12 major barriers identified by the research, an overwhelming number of the business owners ranked “capacity in the area of human resources” as their number one barrier. Their concerns about this issue ran the gamut from hiring to firing. They faced challenges in attracting the kind of workers they needed not only because of competition with other companies and the perceived desirability of working for a larger firm, but also the disincentive some people felt about working for a woman of color. A woman of color was not perceived as the type of person who can run a successful business.

An additional challenging factor faced by many women of color is their desire to help the people in their community. They had a double bottom line. Of course they wanted to be successful in terms of money, but they also wanted to be of service to their communities. A theme emerged from the research that highlighted women who sought to have a local impact by hiring from their communities. As a result, they often had to train their workers in the most basic elements of work life. They had to ingrain a work ethic, teach them how to do the work and the expectations of a workplace culture.

They also faced the same human capital challenges that all businesses face. They wondered how to create teams, how to identify employee’s strengths and weaknesses, and how to cultivate sensitivity toward customers. They wanted to know how to find and hire the types of employees they needed, employees who could grow with the company. They also wondered about how and when to let someone go.

The challenges women of color face regarding lack of business know-how or lack of access can be addressed by training and ameliorating program initiatives. Designing programs and creating policies is our usual response to fixing this problem. These can make a positive difference, but the Center’s research shows that the existing programs and strategies need to be improved.

Furthermore, to design a truly effective strategy to create a level playing field for women business owners of color, we also need to change the perception that being a woman of color is incompatible with being a successful entrepreneur. How do we do this? How do you change a perception that could keep a woman of color from starting a business or a woman already in business from first imagining and then moving toward building a large business — a perception that could keep people from working in a business owned by a woman of color, or buying from her business?

First, we must use the facts. One of the goals of the research study on Accelerating the Growth of Businesses Owned by Women of Color was to document the facts. The women in the research were owners of firms with revenues between $250,000 and $5 million. Twenty-three percent of the participants owned businesses with revenues of $1 million or more and six percent had revenues of $5 million or greater. They were all in growth mode and had track records of at least several years. The women who participated in research forums included very successful entrepreneurs. So it is a fact that women of color can be and are successful entrepreneurs.

Secondly, we must be motivated to change our view because it is painful to do so. In addition to fairness, the changing demographics of our nation provide just such motivation. It won’t be long until Caucasians are the minorities in the United States. According to a recent Pew Research Center report, Whites will become a minority (47%) by the year 2050. It behooves us all to recognize the imperative of including all races, genders and ethnicities into the effort to build a vibrant national economy. Paraphrasing a Chinese proverb, it takes all of us to hold up the sky.

When looking at the future, it seems obvious and imperative, for individual companies and institutions to address the needs of the members of the emerging majority or see their market share and profits shrink.

History teaches us that the implications of facts and well-documented impending social change are often ignored. At the deepest level, changing our perceptions, what we see, means changing how we see. Anyone seeking to see and experience reality directly, that is, not though the filters of our socialization that support culturally induced misperceptions, would benefit from studying the large body of knowledge about the power of paradigms.

Paradigms can literally keep us from seeing what is right in front of us. Those who don’t see successful women business owners of color are not seeing a reality and a possibility that is right in front of them. The dynamics of changing paradigms takes more than facts. It requires us to not be enthralled by our first impressions.

The Buddhists extol the virtues of maintaining a life-long “beginner’s mind,” a mind that is as open and curious as a beginner about to learn something new. In such a fast-paced world, being open and curious provides a competitive edge and keeps us in touch with what is really going on. It is a good business skill and a good life skill.

This research entitled, Accelerating the Growth of Businesses Owned by Women of Color, provides a roadmap not only for designing more effective programs and policies, but also reveals the price we pay for our limited and limiting view of what is possible for women of color.

JUANITA M. WEAVER is director of media and strategic alliances for the Center for Women’s Business Research. Headquartered in Washington, DC, Weaver can be reached at 202-638-3060, ext. 719 (e-mail: jweaver@womenbusinessresearch.org). For more information on the study, please visit www.womensbusinessresearch.org.

(This article is reprinted from Vol. 9, No. 2 of Enterprising Women magazine. Copyright 2008, Enterprising Women Inc.  Reproduction in whole or part is prohibited, except by express permission of the publisher. Would you like to comment on this article? Send a note to our editors.)