Symposium addresses current state of businesses owned by women of color
The research is the first release of the results of a multi-year study conducted by the Center for Women's Business Research in partnership with Babson College exploring the impact of race and gender on the growth of businesses owned by women who are African-American, Asian, Latina and other ethnicities. Women of color are starting businesses at rates three to five times faster than all other businesses. However, once in business, their growth lags behind all other firms.
"It is important that as a country and a business community, we learn how to support the growth of this dynamic sector of women business owners," said Margaret A. Smith, chair, Center for Women's Business Research. "This research encourages action and helps public- and private-sector policy makers formulate well grounded decisions to increase opportunities for the nearly two million businesses owned by women of color."
The lead sponsors for this first of its kind project are Sam's Club and Wachovia Corporation.
The research found that being a business owner who is a woman of color can evoke misperceptions about business capacity, result in lessened access to capital for business growth, create the challenge of balancing the expectations and demands of running a business and being part of a diverse culture, and increase the difficulty of attracting top talent. The research also pointed out that many women business owners of color have a double bottom line. They work to give back to their communities as well as for profits.
The top business operations issues -- human resources; cash flow and access to capital; marketing competencies; and access to decision makers and potential strategic partners -- become more challenging because of the factors of race and gender.
Businesses owned by women of color are a substantial economic force. The Center for Women's Business Research's biennial update of the number, revenues, and employment trends for these businesses was released at the symposium. The findings, underwritten by Wells Fargo, showed strong growth. Between 2002 and 2008, the number of such firms increased by 32 percent, their revenues by a dramatic 48 percent, and their employment by 27 percent. The Center estimates that as of 2008 there are 1.9 million firms owned by women of color, employing 1.2 million workers and bringing in $165 billion in revenues. Women of color comprise 26 percent of all women-owned firms.
"Even before I came on the Board of the Center for Women's Business Research, I followed this nonprofit research institute closely - as it brought credibility and visibility to women business owners as an economic force," said Sheila Brooks, national spokesperson, Accelerating the Growth of Businesses Owned by Women of Color. "Now, once again, the Center has shown the courage to take on an issue that no one else was willing to discuss openly - the issues specific to women business owners who are of diverse races and ethnicities."
Five one-day research forums were held across the country. Babson College conducted two case studies on women business owners of color and provided educational content at all forums. As part of the research methodology, participants identified obstacles at the personal, community, and national levels. They prepared action plans on three of their obstacles. The Center tracks the progress of their plans for one year following each forum. The final report including a performance evaluation for these plans will be released in early 2009.
A prestigious consortium of corporate and association sponsors funded Accelerating the Growth and Success of Businesses Owned by Women of Color. Over the time frame of the study a total of fifteen corporations invested in the research. In 2008, the corporate sponsors are: Sam's Club; Wachovia Corporation; Wells Fargo Bank; Verizon; OPEN from American Express; Time Warner; UPS Capital, MasterCard; American Airlines; Ernst & Young; United States Postal Service (USPS); and PepsiCo.
Leading women business owner organizations and other non-profit organizations have recognized the importance of this research to the women's entrepreneurship community and have taken a sponsorship position. They are: the National Association of Women Business Owners (NAWBO); National Women's Business Council (NWBC); Women Impacting Public Policy (WIPP); Women's Business Enterprise National Council (WBENC); Women Presidents' Organization (WPO); and Women's Leadership Exchange (WLE).
The study has many implications for the public sector, corporations, national policy makers, and for women business owners themselves.
A partial list of implications includes:
CorporationsDiversity must be systemic: all races and ethnicities must be represented at all levels of leadership and decision-making. Build relationships specifically with minority women, not as a sub-group of either women or minority groups. Create and support affinity groups of minority women business owners. Measure your progress to make it possible to modify if necessary.
Associations and EducatorsAll races and ethnicities must be represented at all levels of leadership, both volunteer and paid leadership. Create affinity groups specifically for women of diverse races and ethnicities.
Public Policy MakersRequire collection and public reporting of data on lending by race, gender, and race/gender. Continue support and expansion of women's business centers.
Women Business OwnersExpand networks outside your immediate community. Support one another - create and sustain affinity groups.
About the Center for Women's Business Research
The Center for Women's Business Research provides data-driven knowledge that advances the economic, social, and political impact of women business owners and their enterprises. This is accomplished by setting the national agenda; creating insight on the status and achievements of women business owners; altering perceptions about the economic viability and progress of women-owned enterprises; and driving awareness of the economic and social impact of this vital business sector. Find out more online .
About the Center for Women's Leadership
The Center for Women's Leadership (CWL) is dedicated to the advancement of women in business. Through the Center's education and outreach activities as well as through its research, CWL enables the professional accomplishment of women and the success of organizations seeking to leverage their talent and market power. Our extensive research and faculty team make Babson the leading authority on global women's entrepreneurship and a premiere source for the insights and educational opportunities that women need to achieve their leadership goals. Find out more online .