Women Entrepreneurs

5 Challenges Faced by Women Entrepreneurs of Color

Black women entrepreneurs stand among the fastest-growing group of women-owned businesses.
5 Challenges Faced by Women Entrepreneurs of Color
Image credit: graphicstock
Guest Writer
4 min read
This story originally appeared on Ellevate

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.)

More From Women Entrepreneur

Productivity

The Biggest Productivity Killer for Women That No One Talks About

You don't need another productivity hack or app to get back to business.
My First Moves

The Founder of Miss Jessie's Got Retail Placement by Asking a Stock Boy for Intel

After an entrepreneurial failure, Miko Branch launched a new business out of necessity -- and identified a lucrative, underserved market in the haircare industry.
Inspire Me

'It's Never Too Late' to Become a Bolder, Braver Version of Yourself, Says This C-Suite Executive -- Here Is Her Strategy.

Shoprunner COO Stacey Bernhard reveals how she found the strength to walk away from solid jobs.
Gender Bias

How Women Should Be Championing Female Leadership, Post #MeToo

Rebalancing the gender power dynamics in our businesses and our workplaces doesn't equate to advocating for the rise of women and the fall of men.
My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

  • --shares