Women Entrepreneurs of Color Share Their Biggest Business Obstacles and How They Overcame Them
More often than not, black female entrepreneurs in America have felt the impact of their skin color acutely – and it’s not always a good feeling.
In a recent survey of 1,000 American entrepreneurs, nearly a third of women of color said they had a negative experience of entrepreneurship because of their race. While May’s survey, from software platform Thinkific and market research firm OnePoll, did not elaborate on what qualifies as a “negative experience”, the same headwinds persist. probably for underrepresented founders.
“Being a businesswoman of color will come with setbacks, limitations and uncertainties,” said Kiaundra Jackson, licensed marriage and family therapist and founder of KW Couples Therapy. Inc.. Everything from raising capital to finding suppliers and customers to self-doubt is often an intractable problem for founding women of color, she adds.
In the face of such obstacles, women of color still manage to persevere. Here are three tips for overcoming some of the biggest challenges women of color face in entrepreneurship.
1. Get your finances in order.
After being laid off from her job at the company and getting divorced, Ellie Diep used $1,200 from her pandemic raise to launch an online education platform “Ellie Talks Money” and generated more than $2 million in income last year. Her mission is now focused on supporting women entrepreneurs of color and entrepreneurial mothers in their efforts to build business credit.
To create credit, women entrepreneurs should create a formal business entity with, for example, a limited liability company, suggests Diep. “The great thing about business credit is that even if a business owner has less than perfect personal credit, they can still access construction business credit because they report separately,” Diep says. “It will help them grow their business by giving them access to capital.”
Diep also suggests formalizing your financial procedures as soon as possible. Start-up entrepreneurs often don’t have the proper structure in place – and this can affect everything from a founder’s ability to secure a bank loan to financing their business. When applying for a bank loan and pitching to investors, for example, she says having organized financial records, good accounting protocols, and a payment processor is key. Having these proper channels in place can help you more easily distill your finances, as well as forecast your cash flow needs, among other benefits.
2. Take care of your mental health.
One of the biggest things plaguing women entrepreneurs of color is impostor syndrome, Jackson says. The phenomenon in which individuals doubt their abilities and accomplishments is just one of many limiting beliefs that affect this group, she adds.
Jackson suggests taking the time to troubleshoot your issues as early as possible in the startup process. “While searching [assistance] from a licensed professional who can help you deal with any trauma, false ideals about money, limiting beliefs about your personality, and maintaining a healthy relationship with yourself and others is the best thing you can do do before taking the first step,” she says. [can] helps you dodge and deal with all the curve balls that will inevitably come your way.”
Another way to beat impostor syndrome is to create a list of everything you’re qualified to do, suggests Diep. The list should highlight all of your past experiences and accomplishments, as well as any degrees or skills you possess. This list can serve as your go-to resource whenever impostor syndrome starts whispering in your ear, she says. “I want women entrepreneurs of color to recognize that there is a place for you in the market.” You just have to believe you can do it, Diep adds.
3. Prepare for success.
Reflecting on her experiences building her online business, Jackson says another factor that gets in the way of female entrepreneurs is you. If you think you can’t do it, you won’t, she says. Jackson advises entrepreneurs of color to remember what they can deliver, adding that fear will only get in the way.
“You may think ‘What if I fail?’ but what if you succeed? said Jackson. “We all know that this entrepreneurial journey isn’t the easiest. But coming from someone who hasn’t seen entrepreneurship modeled in my family, it can be done.”
Diep adds that entrepreneurs can alleviate these worries if they spend enough time researching upfront. Those who are ready for challenges can develop a strategy needed to overcome them, she adds.