📺 Stream EntrepreneurTV for Free 📺

5 Challenges Faced by Women Entrepreneurs of Color Black women entrepreneurs stand among the fastest-growing group of women-owned businesses.

By Ellevate

entrepreneur daily

This story originally appeared on Ellevate

graphicstock

In general, women of color face numerous challenges in business. However, while many women have and are making significant strides in the business world, they still grapple with seemingly insurmountable obstacles as entrepreneurs. This is reflected in the dismal percentage of women as angel investors (less than 20 percent), venture capitalists (less than 10 percent) and in female-led startups (less than 5 percent).

Related: 7 Myths About Career Transitions That Are Keeping You Stuck

Although black women entrepreneurs stand among the fastest-growing group of women-owned businesses. There are more than 1.5 million businesses owned by black women. According to the 2016 State of Women-Owned Businesses report, eight out of every 10 businesses started since 2007 were launched by women of color.

Here are some of the harsh challenges that many, if not most, women of color entrepreneurs encounter.

1. Biases in the business world

Many women of color entrepreneurs will tell you that they have, and are still facing, a double bias due to both their race and gender. This in turn creates difficulties when it comes to obtaining funding, reaching out to potential partners and even networking.

2. Lack of representation

Very often, women of color are the only ones in business meetings. These women are often striving alone in industries and businesses dominated by men. As such, they are often talked down to, and have to constantly prove their worth, qualifications and drive.

Related: 4 Powerful Ways to Prevent Burnout

This is especially relevant for women of color who are just starting out and leaping into entrepreneurship. These often find the lack of representation intimidating and discouraging.

3. Networking challenges

Networking events attended by very few women of color, if any, can also deter their them from making the right connections. It can all seem like a boys' club that can be hard to get into. It's precisely the lack of access to these networks, as well as not having the right tools and resources to navigate them, that can prevent perfectly viable businesses from surviving and thriving.

4. Lack of mentorship

Mentorship is a valuable resource that benefits many businesses, especially in the early stages. However, there tend to be fewer mentorship opportunities available to women entrepreneurs in general. According to Inc., 48 percent of female entrepreneurs lack mentors and advisors.

For women of color, the gap is even wider as a result of bias and limited networking opportunities. This is where women-focused networks such as Ellevate Network, or events like the WIN conference, can make all the difference.

5. Lack of access to capital and funding

According to this recent study by Fundera, "women entrepreneurs get offered smaller loans across every product, from the same groups." Female entrepreneurs seeking venture capital do not seem to fare any better. Research confirms that investors actually prefer entrepreneurial pitches by attractive men.

Related: How to Listen to Your Intuition and Create Your Dream Life

For minority women, the chances of getting traditional sources of funding such as loans can be slim to none. This may be due in large part to both conscious and unconscious bias. As a matter of fact, according to the Minority Business Development Agency (MBDA), small business owners of color are more likely to be denied credit than other small business owners. They also tend to pay higher interest rates than non-minority owned businesses. As a result, fewer women of color entrepreneurs seek to apply for loans.

(By Solange Lopes. Lopes is an author, CPA and writer/blogger. She blogs about career and lifestyle for professional women in her blog The Corporate Sister.)

Ellevate is a global network of professional women who are committed to elevating each other through education, inspiration and opportunity. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Growing a Business

How Small Businesses Can Master a Complex Labor Market

Navigating today's labor market is a high-stakes game for small businesses as they compete to attract top talent. Here are a few strategies for small businesses to consider as they build and strengthen their teams.

Side Hustle

Want to Start a Simple Business That Helps the Planet? After 'One Night's Worth of Research,' He Started an Eco-Friendly Gig And Now Makes $200K a Year

Environmentally-conscious laws are picking up steam across the country. When one went into effect in Zach Cavacas's home state, he saw a lucrative business opportunity. Chances are, a similar law is coming to your state, or is already there.

Devices

Drive Safe on Business Trips with This Car Display, Discounted to $90

Compatible with Apple CarPlay and Android Auto, this touchscreen display makes safer navigation easier.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Jack Dorsey Explains Bluesky Exit: 'Literally Repeating All the Mistakes We Made' at Twitter

Dorsey left the Bluesky board and deleted his account earlier this week.

Business News

McDonald's Is Responding to Sky-High Fast Food Prices By Rolling Out a Much Cheaper Value Meal: Report

The news comes as the chain looks to redirect back to customer "affordability."