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YESSSSSS  “Sistas are doing it for themselves, standin’ on their own two feet and ringin’ their own bells!” I know that I am probably dating myself, but I still sing this famous Aretha Franklin song proudly.

So, you want to know who the fastest growing group of entrepreneurs are? We are… Black Women!  Major companies like American Express are showing this through hard data which I will break down later. However, I didn’t need a fancy study or statistics to come to that conclusion.  It is displayed on my social media timelines daily.  I scroll with pride knowing that we are not leaving our destiny in the hands of others.

From the tried and true businesses in the fields of beauty and culinary (people want to look fly, and they love to eat) to tech and consulting firms (doors which are typically closed in the corporate world), Black Women are taking their seat at the head of the table.  To put it bluntly, our unmatched creativity, along with sheer necessity, gives us a distinct advantage which propels more Black Women into entrepreneurship.  Now that we have gushed and applauded the good, we must now face some hard truths.

A recent study, produced by the Ewing Marion Kauffman Foundation (2018), reported that “Black-owned firms have higher failure rates than White-owned and Asian-owned firms” No surprises there!  Furthermore, the average revenue for women of color dropped from $84K in 2007 to $66K in 2018, while for non-minority businesses revenue rose from $181K to $212K. Even though Black Women own 2,402,600 or, 20%, of all women-owned businesses we only produced an average revenue of $25K per firm vs. $143K among all women-owned businesses.  As for other minority groups (i.e., Asian, Latina), they do not experience the same revenue disparities at such an alarming rate.

Now that we know there is a disparity, let’s explore some of the root problems and more importantly some solutions.

1. STARTING BUSINESSES OUT OF NECESSITY

I know… I know… I said this was an advantage, but it can also be a weakness if you allow it to be.  Because we need money, many of us are willing to undervalue our products and services (offers). The “something is better than nothing” mentality will cripple your business. Don’t let it. In a world of Amazon and off-shore resources, you may not be able to compete by lowering your prices, instead, let’s tap into that Black Girl Magic and create an offer and a market that will pay you your worth.

I already know what you are going to say – “My customers won’t pay more!” My response is to find some new customers.  You will never win on price alone because there will always be someone willing to do it for less.

2. NO ACCESS TO START-UP OR OPERATING CAPITAL

In all likely hood, you probably don’t have a trust fund or a rich uncle that left you a hefty sum of money.  And your prospect of getting venture capital is not much better.  The Ewing Marion Kauffman Foundation (2016) study further stated that only, “2.7% of all U.S. companies receiving venture capital had a woman CEO, and only 0.2% of venture capital goes to African American women – despite the fact that African American women founders are the fastest growing entrepreneurial segment.”

The fact is most Black Women who start businesses bootstrap them. Some may have stashed a little cash away courtesy of their 9-5 or they may have even cashed out their 401Ks.  In most cases, a little sprinkle of cash, that you don’t know how to effectively manage, is not enough to start or operate a business.  But remember we are creative by nature.  We have ample experience in making a dollar out of fifteen cents; so, it can definitely be done.  You must be willing to start where you are and make strategic decisions with your money.  The fancy logo and gold foil business cards will have to wait.  Invest in marketing and systems that will allow you to scale and lead with offers that have higher profit margins, thus increasing your cash flow.  The more cash on hand, the more likely you are to survive the early stages of business.

3. IT’S  A BIG COMMITMENT, SO ACT LIKE IT

According to an article in The Atlantic (2015), “95 percent of African American middle-class families do not have enough net assets to meet most of their essential living expenses for even three months if their source of income were to disappear.” In many cases, the risk of entrepreneurship is far too high and we simply don’t have the resources to quit our jobs and bet it all on a new business.

Understand that you are not going to grow a million-dollar brand overnight.  You may work at your side-hustle aka 9-5 until your business is making enough money to sustain itself and you. You are only going to get out of your business what you put into it. Make a commitment to work in your business as much time as you can so that you can Position it for Profits.

4. YOUR BUSINESS IS NOT A SIDE HUSTLE

Treat your business like a “business”!

[a]  Have separate accounts for your business and personal finances.  Mixing the two will only lead to chaos.

[b]  Make strategic investments in your infrastructure.

[c] Issue and pay your invoices on time.

As you grow your business, you may need financing and if you don’t pay your bills on time, financing will now be an option.  There is no Rent-A-Center when it comes to business.

Even if you are not working in your business full-time, it should not feel like that to your customers.  It should feel legit and professional.  A few small key investments can go a long way.  A simple one-page website, emails to your customers from your business domain name, and clear communication channels are just a few fundamental tools you should be using. And please stop with the excuses in your business.  When customers pay you for your products or services, deliver them on time.  They could care less about you having to work overtime at your 9-5. You must treat your customers better than your 9-5 because this is YOUR business and you are positioning yourself for profit.

5. NO ACCESS TO DEVELOPMENT RESOURCES

There is a slim chance that you may know someone that has a successful business and is willing to mentor you or show you the ropes for free.  If you do, great! But if you don’t, you can’t sit around waiting for that bus to come along.  You must invest in the knowledge that you need to make your business profitable.  When I say invest, I don’t mean Google, although you can start there.  Learn all that you can about your business on your own so that you get an understanding of the resources that you will need to invest in.  Some other free resources you should tap into include Facebook groups and the Small Business Administration (SBA).

Now that you know a little about a lot, you should invest in a group coaching program and then hire a business coach/consultant for some strategic 1×1 coaching, as needed.  Buyers beware! Do your homework before you buy.  There are lots of scammers out there just waiting to take advantage of you.  Coaching is an excellent investment that will save you money, time, and provide you with access to a community of entrepreneurs which is invaluable.  Once you have found a community, find a “Business Bestie”. This is someone who is at a similar stage as you are in your business that you can lean on for support and advice.

We want to help you get started on your journey. Enter to Win the Black Women Mean Business Ultimate Giveaway.

 

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