It’s lonely at the top — especially for minority female business owners, says a major California study out recently.
The study of 807 women paints one of the most detailed portraits yet of the USA’s 1.6 million minority female entrepreneurs. The number of such companies is growing four times faster than all U.S. businesses, making them a major source of future economic growth.
One highlight of the survey is that minority women are more likely than white women to start and run businesses by themselves. Their goals are often altruistic, such as serving their community. And many have more trouble than white women getting financing, says the study by the Center for Women’s Business Research.
Still, the top issues for female business owners — hiring, boosting revenue and finding capital — are largely the same regardless of race or ethnicity, says the center. Those issues mirror the concerns of all small-business owners.
But minority women often differ from other business owners in how they manage, and in what drives them to start companies, the study says. Corporations want to learn these differences so they can better target their products and services, says Patti Ross, IBM’s executive in charge of selling to female-owned firms. IBM, Wells Fargo, and other big companies want to tap the market because of:
Faster growth. Although minority women own just 6% of the USA’s 22 million companies, their fast growth is accelerating. The number of such companies grew four times the U.S. average in 2007-2012 vs. three times the average in 1997-2006.
Viability. African-American and Hispanic women are more likely now than in the past to start their companies as full-time ventures. That’s another sign that more women are treating start-ups as serious ventures that could grow — adding jobs and expenditures on such things as computers and banking services.
The differences between minority and white business owners are especially pronounced among African-American women, who own more than 465,000 firms. For example, 72% of black women start or buy their businesses without a partner, vs. 62% of white women, the study says.
They also are more likely to say they have altruistic business goals, such as serving their community or being a role model. Wanda Stephens, 44, started her computer training firm near Cleveland partly because she wants to schedule her day around Bible study and work she does for her husband, a minister.
What’s more, 27% of African-American women cite financing problems, vs. 14% of white women. Black women may cite more obstacles because they have less experience with lenders or may suffer more overt discrimination, says Patricia Greene, an entrepreneurship professor at the University of Missouri.