LatinaLista — A new analysis from the Center for American Progress showcases the entrepreneurial spirit among women of color. According to the report, “How Women of Color Are Driving Entrepreneurship”, women of color are the “driving force behind business growth” in the nation.
The report shows that 61 percent of women of color dream of being their own boss but only because they have reached a ceiling in their professional careers where if they don’t create opportunities for themselves, no one will.
- In 2013, only 25.6 percent of Latina women and 33.5 percent of African American women held management, professional, and related occupations, compared with 42.7 percent of white women and 48 percent of Asian American women.
- …in a study of women of color accountants, respondents cited a lack of similar role models, stereotypes, exclusion from networks, and lack of access to high-visibility assignments as barriers to advancement.
- A study of women of color in U.S. securities firms revealed that they often experience exclusion in the workplace—leading to difficulties forging connections with colleagues, managers, and mentors and a dearth of business development opportunities; men and white women generally do not experience this.
- a study of women of color in law firms across the country revealed that women of color often felt marginalized by negative racial or gender stereotyping, were the subject of low expectations from supervisors, and lacked access to important client or business engagements necessary for advancement.
The increase in women of color pursuing business-creation is not surprising given the country’s demographic shift which will see women of color become the majority among females by 2045, with Latinas leading that population growth. But it is surprising that while women of color are spearheading this national growth in businesses, they still are subjected to far more challenges to making it a success than their white female peers.
The report reveals that when looking for funding to start their businesses, women of color often partially fund their new businesses using their own money despite having less personal wealth than white women or men. In fact, single Latinas and African American women with children are said to have zero median wealth.
The lack of startup capital any woman has in starting her own business forces her to look for outside funding from traditional sources — banks. Whether it’s personal or commercial bank loans or a Small Business Administration loan, women of color report being given a harder time in getting a loan to start their business.
Additionally, a review of studies on small businesses revealed that minority-owned businesses, when compared with similar white-owned businesses, face greater difficulties in accessing loans from financial institutions, including having their loan applications rejected more often, receiving smaller loans, and experiencing higher borrowing costs.
If those hurdles weren’t enough to dampen enthusiasm for entrepreneurialism, the report highlights how Latinas and African American women can look forward to low profits depending on their business choices.
Between white women-owned firms versus African American women and Latina-owned firms, white women-owned firms brought in average receipts 9.5 percent higher than the national average for all women-owned firms while Latinas’ average receipts were 54 percent lower. African American women fared the worse with receipts 74 percent lower.
However, the reason for the disparity is easy to see:
For example, professional, scientific, and technical services are top industries for white- and Asian American-owned firms. The top industry for African American women- and Latina women-owned firms is health care and social assistance, one of the lowest-grossing industries among women-owned firms in terms of average receipts—$74,957—compared with professional, scientific, and technical services, which have average receipts totaling $97,645.
Though the report heralds the entrepreneurial drive of women of color, it also casts a harsh light on the institutionalized discrimination financial institutions implement towards minorities applying for loans; the lack of support corporations have in place for minority employees, especially women of color, and the lack of Latina, African American, Native American and Pacific Islander women in fields such as science, technology, engineering, medical and professional careers that would not only enhance the kinds of businesses created by these specific groups of women of color but enable them to create more profit, and in turn, create more high-paying jobs in their communities.