{"id":5780,"date":"2022-11-03T01:24:54","date_gmt":"2022-11-03T01:24:54","guid":{"rendered":"https:\/\/pagely-test.frontdoor.godaddy.com\/ventureforward\/?p=5780"},"modified":"2022-11-09T23:54:57","modified_gmt":"2022-11-09T23:54:57","slug":"black-women-are-leaders-in-the-microbusiness-boom","status":"publish","type":"post","link":"https:\/\/www.godaddy.com\/research\/black-women-are-leaders-in-the-microbusiness-boom\/","title":{"rendered":"Black Women are Leaders in the Microbusiness Boom"},"content":{"rendered":"\n<h6 class=\"wp-block-heading\" id=\"h-black-women-have-started-nearly-20-of-these-startups-since-the-pandemic-began-three-times-their-share-of-the-u-s-population\">Black women have started nearly 20% of these startups since the pandemic began, three times their share of the U.S. population.<\/h6>\n\n\n\n<p>Denise Larell was always a good student and a great hair stylist. She started making extra cash braiding hair at the age of 16. But two years later, struggling with realities of life under the poverty line, she was forced to make a tough choice, and temporarily dropped out of school to focus on making money. \u201cI was in survival mode,\u201d says Larell, who grew up in an economically distressed part of Baltimore. \u201cI needed a source of income to provide for myself and my siblings,\u201d she recalls. <\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-style-default\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_06_30_Denise_Larell_Hair_Studio_SC_009-1024x683.jpg\" alt=\"\" class=\"wp-image-5783\" srcset=\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_06_30_Denise_Larell_Hair_Studio_SC_009-1024x683.jpg 1024w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_06_30_Denise_Larell_Hair_Studio_SC_009-768x512.jpg 768w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_06_30_Denise_Larell_Hair_Studio_SC_009-1536x1024.jpg 1536w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_06_30_Denise_Larell_Hair_Studio_SC_009-2048x1365.jpg 2048w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_06_30_Denise_Larell_Hair_Studio_SC_009-320x213.jpg 320w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_06_30_Denise_Larell_Hair_Studio_SC_009-120x80.jpg 120w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Ten years later, Larell is no longer in survival mode. Thanks to her natural talent and hard work \u2013 she went to cosmetology school, took online courses in entrepreneurship, and went back to school to earn that high school diploma \u2013 she\u2019s built a lifestyle she once could not have imagined as owner of <a href=\"https:\/\/deniselarellhairstudio.com\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" data-eid=\"comms.microsites.venture-forward\/link.c75afe3dba6d9656766ccba86fd2b21a\">Denise Larell Hair Studio<\/a>. Charging up to $800 to do stunning hair extensions, she gives seminars around the Southeast United States and has extra time to mentor other would-be entrepreneurs. \u201cI love that I can get up and go where I want,\u201d says Larell. Having just arrived home from a Mexican vacation, she adds: \u201cI want to use my revenue to see the world, so I can learn more.\u201d<\/p>\n\n\n\n<p>Larell is one of many Black women who have chosen to forge their own economic path in recent years by starting microbusinesses, loosely defined as entities with fewer than ten employees that have some kind of web presence. While Americans of all stripes have created <a href=\"https:\/\/www.brookings.edu\/blog\/the-avenue\/2022\/01\/04\/microbusinesses-flourished-during-the-pandemic-now-we-must-tap-into-their-full-potential\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" data-eid=\"comms.microsites.venture-forward\/link.e1b86b71a08e6eae17826220ab8bacf9\">millions<\/a> of these businesses, no major demographic group has embraced the trend as much as Black women.<strong> According to the most <a href=\"https:\/\/www.godaddy.com\/research\/2022-national-survey-results\/#1\" target=\"_blank\" rel=\"noreferrer noopener\" data-eid=\"comms.microsites.venture-forward\/link.c76d4f1d626f0188bd7c9fea9ed3c804\">recent survey<\/a> by GoDaddy\u2019s Venture Forward initiative, collected in February, Black women have started 17.7% of all microbusinesses created in the U.S. since the beginning of 2020. That\u2019s well above their 6.6% share of the U.S. population, and 46% higher than before the pandemic.<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"694\" height=\"666\" src=\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/Black-Women-are-Leaders-in-the-Microbusiness-Boom_6.svg\" alt=\"Black Women are Leaders in the Microbusiness Boom\" class=\"wp-image-5789\"\/><\/figure>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading\">Determination to Fight the Odds<\/h4>\n\n\n\n<p>Of course, not all Black women face the huge obstacles that Larell has overcome. But as a demographic category, they do stand out in statistically meaningful ways. They are far less likely to be able to commit themselves full-time to their microbusinesses. In the recent survey, 60% of Black women founders said they had full-time jobs outside of their microbusiness, compared to 36% of founders from other groups.<\/p>\n\n\n\n<p>Yet despite these headwinds, 92% of Black female founders were more optimistic about the next 3 months, compared to 72% of other founders who were surveyed. While they are more likely to run their microbusiness to bring in income to supplement a full-time job (48% for Black women, versus 40% of all others), they are far more likely to want to make it their primary source of income (83% for Black women versus 67% of all others). <strong>And while 71% of Black female microbusiness owners are solopreneurs, compared to 58% for all other demographics, a higher percentage hope to build a large business.<\/strong> In fact, 93% plan to grow the business in the next year, compared to 76% of other founders.<\/p>\n\n\n\n<p>Increasing rates of business formation by Black females bodes well for the communities where they live. Three years of research by Venture Forward indicates that communities with a higher density of microbusinesses have lower unemployment and higher average household income levels. \u201cThis data is promising in terms of the likelihood of a more inclusive, equitable recovery, but also in terms of bringing in people with new ideas and innovations,\u201d says Karen Mossberger, a professor at Arizona State University and a Venture Forward research partner.<\/p>\n\n\n\n<p>\u201cWomen are paid less than men, and black employees are paid less than other racial groups, so Black women have long faced a double wage gap,\u201d says Mossberger. \u201cStarting a microbusiness is a way for people to take their future into their own hands, to see what they can do on their own.\u201d<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading\">Finding a Path Forward<\/h4>\n\n\n\n<p>The recent survey results were gathered before new interest rate increases and other macroeconomic clouds appeared, but one trend is clear: Black women were hit inordinately hard by the economic fall-out from the pandemic. No major demographic group suffered <a href=\"https:\/\/blog.dol.gov\/2022\/02\/09\/black-womens-economic-recovery-continues-to-lag\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" data-eid=\"comms.microsites.venture-forward\/link.f17efcad4cb99d429a139f1bab6aa299\">more job loss<\/a> since the pandemic began.<\/p>\n\n\n\n<p>Even so, the Venture Forward survey and other studies suggest the rise in businesses started by Black women is not just about economic necessity. According to one <a href=\"https:\/\/www.catalyst.org\/research\/women-of-color-in-the-united-states\/#easy-footnote-bottom-11-5881\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" data-eid=\"comms.microsites.venture-forward\/link.7dc32e24d297f8f90e65d8b7805a9e7d\">2021 survey by Catalyst<\/a>, an advocacy group for women in business, one-third of women of color who were currently employed planned to leave their employers in the next year. The top three reasons cited were burnout (51% of respondents), a desire for a different career with greater purpose (47%) and better pay and benefits (47%).<\/p>\n\n\n\n<p>Venture Forward data suggests that Black women can expect less financial help in pursuing their own course. Black women have far less access to capital. Only 2% of respondents had a bank loan, compared to 6% of all respondents, and 78% of Black women funded their start-up from personal savings, versus 67% for others. Not surprisingly, they tend to do more with less money. Nearly three quarters of Black female founders spent less than $5,000 to get their business up and running, versus 58% of others.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized is-style-default\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_07_16_Juanitas_Plants_GDD_8350-1024x683.jpg\" alt=\"\" class=\"wp-image-5791\" width=\"840\" height=\"560\" srcset=\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_07_16_Juanitas_Plants_GDD_8350-1024x683.jpg 1024w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_07_16_Juanitas_Plants_GDD_8350-768x512.jpg 768w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_07_16_Juanitas_Plants_GDD_8350-1536x1024.jpg 1536w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_07_16_Juanitas_Plants_GDD_8350-2048x1365.jpg 2048w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_07_16_Juanitas_Plants_GDD_8350-320x213.jpg 320w, https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/11\/2021_07_16_Juanitas_Plants_GDD_8350-120x80.jpg 120w\" sizes=\"auto, (max-width: 840px) 100vw, 840px\" \/><figcaption><sub><em>Kat Hernandez, Founder, <a href=\"https:\/\/juanitasplants.com\/home\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" data-eid=\"comms.microsites.venture-forward\/link.7aa24b777afda6feebc6240194021fc0\">Juanita&#8217;s Plants<\/a><\/em><\/sub><\/figcaption><\/figure>\n\n\n\n<p>Kat Hernandez exemplifies the experience of many lower-income Black women. As the daughter of immigrants from the Dominican Republic, she was unaware of the importance of credit scores growing up in Brooklyn. In part because they only spoke Spanish, her parents never had the opportunity to get a mortgage or a bank loan. It was only after she founded <a href=\"https:\/\/juanitasplants.com\/home\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" data-eid=\"comms.microsites.venture-forward\/link.7aa24b777afda6feebc6240194021fc0\">Juanita\u2019s Plants<\/a> that she applied for a bank loan, and was sorely disappointed to find that she couldn\u2019t even get approved for a credit card. Part of the problem is she\u2019d incurred $50,000 in college loans to get a journalism degree from CUNY-Hunter College, only to find out after the fact how it would hamper her ability to build a business. \u201cIt was only then that I learned that credit matters,\u201d she says.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading\">Growing Businesses Even When Access to Capital is Scarce<\/h4>\n\n\n\n<p>The rules around the Payroll Protection Program also worked against her, since it was designed for businesses that had employees \u2013 not those created during the pandemic that were trying to hold on and survive. \u201cYeah, I would say it\u2019s been challenging,\u201d says Hernandez, whose only outside capital has been a $2,000 loan from her grandfather to fund a photo shoot for her website. While many factors determine business success, the lack of access to capital is one reason only 12% of microbusinesses owned by Black women bring in $4,000 or more per month in revenues, compared to 27% for other groups.<\/p>\n\n\n\n<p>Hernandez remains undeterred, however, and has no regrets about joining two demographics with an outsized impact on the growth of the microbusiness economy: women of color and people under 30. By combining revenue from Juanita\u2019s Plants with producing podcasts, she feels more in control of her economic destiny than if she were working full-time for someone else. \u201cPeople like me are very much at a disadvantage when it comes to financing, but I\u2019m going to do my thing, regardless of the adversity.\u201d<\/p>\n\n\n\n<p>The same goes for Larell, the hair stylist. She also built her business as she went, with no outside financial assistance or loans. In fact, she prospered during the pandemic, when she began producing wigs for clients and hosted a series of live online seminars. Now, she\u2019s leveraging her growing brand recognition with an online course so she can earn revenue off her knowledge rather than her time. \u201cI no longer want to trade my time for money,\u201d she says.<\/p>\n\n\n\n<p>Longer term, she hopes to open a chain of salons, where other stylists can rent a chair to start establishing themselves \u2013 just as she did in her late teens. \u201cI\u2019m living proof that you can do anything you put your mind to,\u201d she says. \u201cThere\u2019s nothing wrong with having a 9-to-5 job, but if you are called to do your own thing, you can do it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Black women have started nearly 20% of microbusinesses since the pandemic began, three times their share of the U.S. population. And in-spite of facing disproportional odds, 92% of surveyed Black female founders were more optimistic about the next 3 months, compared to 72% of other founders who were surveyed.<\/p>\n","protected":false},"author":15,"featured_media":5782,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[],"class_list":["post-5780","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-microbusiness-profile"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Black Women are Leaders in the Microbusiness Boom - Small Business Research Lab<\/title>\n<meta name=\"description\" content=\"Black women have started nearly 20% of microbusinesses since the pandemic began, three times their share of the U.S. population.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.godaddy.com\/research\/black-women-are-leaders-in-the-microbusiness-boom\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Black Women are Leaders in the Microbusiness Boom - 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