Black women leave their mark in all areas of the economy – from historic victories in politics to extraordinary leaps as entrepreneurs. But when it comes to generating income and building wealth, black women still lag behind their white counterparts. In fact, black women report average earnings that are less than any other US population surveyed.
According to a 2019 report commissioned by American Express, black female founders earn an average of $ 24,000 per company. This equates to less than 17% of the earnings of all women-owned businesses. The report shows that the average revenue of all women-owned companies is $ 142,900.
The transition to entrepreneurship
The number of businesses owned by black women grew exponentially from 2014 to 2019. Motives for starting a business are creating an additional source of income or a desire to follow dreams. But there are large numbers of black women who are fed up with inequalities in the workplace.
American Express research advisor Geri Stengel points out, "There is frustration and widening pay gaps in the traditional workforce, and entrepreneurship is seen as a way to fill that gap." Unfortunately, entrepreneurship has proven to be another hurdle for black women. Limited access to capital, experience and resources has contributed to the stifling sales figures for most companies.
“My advice to younger women starting a business is to use all available resources and take part in accelerator programs,” says Stengel in an interview. "Research Programs by the SBA and Business Centers to Evaluate Funding."
The 2019 State of the Company-Owned Company Report estimates that if more minority-owned companies were able to run the US economy, four million new jobs and $ 981 billion in revenue would be added to the US economy to achieve the revenue generated by their colleagues.
Increasing sales for women-owned companies
Black women are the fastest growing group of entrepreneurs in the US, running over 2.6 million businesses across the country as of 2019. Women were responsible for over 12 million businesses, with black women accounting for 21% of businesses. The report shows a total of 6.4 million minority-owned companies and 6.5 million non-minority-owned companies.
“The face of entrepreneurship is evolving to include all women regardless of population size. What's even more impressive is that women start businesses on their own terms – be it full-time or part-time, "Courtney Kelso, American Express senior vice president, said in a statement.
Last November, American Express partnered with IF and Women of Color to surprise 100 black women entrepreneurs with grants of $ 25,000. Recipients also received 100 days of resources under the 100 for 100 program. These grants are more than the average sales of businesses owned by Black women in 2019.
While there is still work to be done to help black women increase their income fairly, entrepreneurs can take small steps to improve their bottom line. Memphis-based event planner Cynthia Daniels generated over $ 2 million for black-owned companies during the pandemic. Daniels offers these words of wisdom to other entrepreneurs: "When you face challenges, don't be afraid to focus on what is needed in the moment."