Black women are still the fastest-growing group of entrepreneurs, according to a new report by GoDaddy.
Released as part of the web host’s Venture Forward research initiative, the latest report details an exponential increase in the number of Black women-owned businesses.
Approximately 10% of the participants involved in the study were Black women; this indicated a 70% increase in Black women-owned businesses that existed before the COVID-19 pandemic.
One of the key takeaways from the report was that 15% of microbusinesses, which are businesses with an active website, across the U.S. were Black-owned. Of these Black-owned microbusinesses, 68% are Black women-owned.
The numbers remained consistent in the U.K. About 5% of micro businesses in the U.K. were Black-owned; approximately 60% of this 5% were Black women-owned businesses.
With this increase in Black women-owned businesses, these entrepreneurs are helping close the gender gap, according to GoDaddy. In the past year alone, overall, the number of women-owned businesses has increased by 4%, bringing the total amount of women-owned businesses in the U.S. specifically up to 51%.
“Better understanding helps advocates find opportunities to further support these entrepreneurs,” said the senior director of Venture Forward, Alexandra Rosen, per the report. “What our research demonstrates is that entrepreneurship creates positive impacts for entrepreneurs’ households, the communities where they live and work as well as the greater economy.”
Although they’re opening businesses at faster rates, Black women entrepreneurs still face many barriers they’re faced with, mainly with securing funding.
Per a report by Goldman Sachs, Black business owners, in general, are rejected at a rate that’s three times more than that of white business owners when applying for loans at the bank. Overall, Black entrepreneurs are 20% less likely to receive funds from the bank when starting a business.
Black women are among those that get offered the least. According to Goldman Sachs Project Diane report, 77% of women cited “limited access to funds or investment” as their biggest barrier when they began their career in entrepreneurship.
With the lack of financial resources, Black women are forced to provide the funds for themselves. Per the Harvard Business Review Study, 61% of Black women reported that they funded their own start-up.
To help ease the difficulties of starting a business, there are a variety of nonprofits, however, that are dedicated to providing adequate funds to Black women.
Although they’re under attack, groups such as the Fearless Fund, Black Girl Ventures and Hello Alice are all dedicated to making it easier for Black women who are starting their own businesses.
