Have you ever heard of Madam C.J. Walker?
You should know her: Walker is considered history’s first African-American female entrepreneur and the first female self-made millionaire in America.
And we’re not talking about extraordinary success in a post-Jim Crow or Civil Rights, but the nineteenth century. Born Sarah Breedlove on December 23, 1867, she was an entrepreneur, philanthropist, and activist. She created an empire in 1910, Madam C.J. Walker Manufacturing Company, based out of Denver. The brand developed hair products and cosmetics for Black Women, also known as the “Walker Method” or the “Walker System of Beauty Culture.” She was a fierce and impactful advocate for the advancement of African Americans and the end of lynching.
Over a hundred years after Walker became a tycoon, the question should be asked how Black women are doing in entrepreneurship.
It’s a pretty fascinating ride, so let’s take a look.
Stats on Black Female Entrepreneurship
The good news should be addressed first, as it’s excellent news. According to a report by J.P. Morgan, the number of businesses owned by Black women grew 50 percent from 2014 to 2019, representing the highest growth rate of any female demographic. Just as promising, Black females accounted for 42 percent of all women who started a new business during the same time, representing 36 percent of all Black employers.
This success is not a glitch in the Matrix, as 17 percent of African American women are in the process of starting a new business (compared to 10 percent of White women and 15 percent of White men). Black female entrepreneurs have started companies at over four times the overall population rate. The leading motivations are following a dream and creating a source of income.
Somewhere, the good Madam Walker is smiling – especially when considering that Black women are one of the nation’s most underserved groups, with the lowest proportional democratic representation and the largest median income gap for full-time workers. Sometimes, you “gotta do what you gotta do.” As Walker herself once said pithily, “I got my start by giving myself a start.”
Walker’s spirit indeed abounds in this century. Data from the Harvard Business Review reveals that seventeen percent of African American women lead a business, compared to just ten percent of White women. Black women account for more than a third of the 12 million female-owned businesses in the country. The pandemic absolutely hurt small businesses nationwide in various ways, with roughly 200,000 permanent closings just in 2020. At the same time, the disruptive event fueled the risk-taking bug of many demographics, including Black women – and so far, it seems to be a good bet. With the gig economy growing and being embraced by a rising Gen Z, opportunities and inspiration should continue to soak the Black female demography.
Challenges Remain and Overcoming Roadblocks
The bad news may not be so bad, but it’s certainly concerning for Black women attempting to secure a seat at the front of the bus of the American Dream.
For example, data shows that only three percent of black women-owned companies mature and survive longer than five years. Furthermore, Black women business owners have a higher rate of failure for first businesses than the national average. This indicates an apparent lack of financial support and structural barriers to capital access. To drive this point home, approximately 0.2% of VC funding goes to companies headed by Black women. Not being able to access capital makes Black women’s revenue comparatively low.
“It just feels like a lottery,” said Angela Barnes Barnes, who founded her own electric company after leaving her job as a project manager at Ohio State University Wexner Medical Center. “It’s really frustrating, and now I’ve taken time away from my business to apply for this. It just feels like you’re in a rat race.”
Even within their own culture, Black women are getting the short end of the opportunity stick. Although Black-owned businesses grew faster than other businesses in 2020, bringing in $141.1 billion in gross, Black male entrepreneurs dominated, encompassing 64 percent of Black-owned businesses (per Forbes).
In short, some gaps and cycles need fixing to maximize the contribution of Black women to the overall economy. It doesn’t help that from a psychological standpoint, Black female owners also struggle: they tend to deal more with imposter syndrome, fueled by their experience with microaggressions at work, and are more likely to have their judgment and competence questioned at the workplace.
Here are some key methods to fix or at least improve roadblocks facing Black women entrepreneurs:
These solutions dovetail with the main challenges of Black women when starting a business, according to a survey:
Although Black female entrepreneurship didn’t happen overnight (although it happened more than 100 years ago with Madam Walker), it has happened rather quickly, even if the barriers faced will take time to dissolve, as with other minorities.
It Might Be Even Better Thank Believed
One typically envisions brick-and-mortar businesses or some online venture when thinking about entrepreneurship. But shouldn’t artists be considered entrepreneurs – as well as today’s Influencers? The best case study is Oprah, who was raised in poverty to become more successful than any Russian oligarch or Silicon Valley mogul. What about Nicki Minaj, who operates several successful businesses, including a record label? Both women began in the proverbial show business and shifted to entrepreneurship. Shouldn’t they and many others like them be considered entrepreneurs as soon as they succeed with their craft, as they often have personal staff and are hands-on in many business decisions? Moreover, in the digital age, branding is the most business-savvy decision any executive can make in a traditional business (just ask Steve Jobs or Elon Musk). Musicians are typically masters of manufacturing an engaging and approachable persona.
In the arena of influencers, we can look at Jackie Aina. She is a hugely successful YouTuber who began, like most influencers, with just her camera, drive, and dreams.
There’s no easy answer, as there is rarely an easy answer in today’s world of labyrinth economics and shifting attitudes. What is certain is that Black women can and should continue to become business owners as long as they have access to the right information, education, and level playing fields. They should tap into the opportunities of these protean times and follow the lead of Black media figuress. These pivots can set them apart from traditional business models: social media, cryptocurrency, influencer marketing, gig economy, etc. Black women should dream like artists and dream up amazing personal brands. An army of Madam Walkers and Jackie Ainas can only make the nation more prosperous and African-American communities stronger.
As Barnes also said, “There’s going to be a good amount of Black women who are starting businesses who are going to be inspirations to others.”
