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Center for Womens Business Research: Publication Details

09/24/2007 10:47 AM

Publication Details
Women of color entrepreneurs step to the next level 08-20-2007

After a series of layoffs from teaching, Betty Sue King knew she wasnt returning to the formal classroom. Instead, she devoted her life to a business incorporating her deep interest in art and beauty. A wholesaler of pearls, she enjoys sharing her passion leading workshops at trade shows. At a recent San Francisco forum, Accelerating the Growth of Businesses Owned by Women of Color, a groundbreaking initiative, King addressed the obstacles she faces as a businesswoman of color. Some of the challenges involved financing. I went to many banks for a loan. Even though I had property, an equity line was hard to get, said King. Finally, the Security Pacific Bank (now Bank of America) granted a loan for only half of what she had originally asked for. But over the years, King proved she was a viable businessperson. She is part of an explosion in the number of women of color entrepreneurs starting businesses at a rate five times the national average. However, despite many success stories, most are grappling with why they havent reached full potential. A project by the Washington, D.C.-based Center for Womens Business Research (CWBR) and their academic partner BabsonCollege may help zero in on the challenges endured by women like King. When we looked at the research, we saw that women of color start businesses at a higher rate within their ethnic and racial groups [compared to Caucasian women]. But when we looked at how much money they are generating or how many people they employ, we dont see a corresponding rate of growth, said Gwen Martin, CWBRs Managing Director and Director of Research. The cutting edge initiative will compile the experiences of women of color entrepreneurs, engaging them in discussions about factors holding back business growth. The heart of the project is five regional forums that bring women of color together to discuss crucial problems. At San Franciscos forum last month, Donna Stoddard, associate professor at BabsonCollege, struck a chord with participants with the example of three African-American women bankers who took matters into their own hands. Angered by the lack of capital for people within their community, they launched their own bank in Milwaukee, WI. She also presented other case studies at the forum, exposing barriers women of color entrepreneurs face within their own communities. The typical way that majority businesses get funding is through family loans, such as they may be in a family that has a history of entrepreneurship. If relatives have their own businesses, they are more willing to invest in ones enterprise. In communities of color that is not the case. Relatives may have worked for a living but not tried to create something on their own. Therefore, they are less inclined to risk money or simply dont have the resources to spare, Stoddard said. In addition, large banks are leery of offering a jump-start. They would rather have one raise their own initial capital and then just add more to the pot later. People are more willing to invest when it appears that [the business] is growing, she said.

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Center for Womens Business Research: Publication Details

09/24/2007 10:47 AM

Women of color often identify access to capital and the generation of sufficient revenue as two of the largest barriers to growth, said Martin. They can also be plagued by perceptions that they lack financial savvy, which can put off lenders and investors. While money issues and gender stereotypes may affect all women, women of color must also deal with negative racial and ethnic stereotypes. Despite the impediments, unequal salaries and lack of acceptance in corporate America have led to more women of color entrepreneurs. According to CWBR, women of color own about 1.4 million firms, employ nearly 1.3 million people and generate a total of $147 billion in sales, as of 2004. The Office of Advocacy at the Small Business Administration (SBA) reports that within ethnic groups, a larger proportion of women of color own firms than Caucasian women. Major banks, eyeing new markets for credit lines, are aware of these figures. Wells Fargo, a co-sponsor of the research, has divisions on women, Latino, African American and Asian entrepreneurs. In 1995, the bank created the Womens Business Services Program for education and outreach to help with access to capital and other financial services. Tracy Curtis, market president of WellsFargoEastBay, welcomes new research to more effectively assist women of color entrepreneurs. If we cant help people put together documents and business plans, we partner with nonprofits who can help them. The remaining two forums will occur in Dallas, TX in September and Chicago, Illinois next January. All research findings will be presented at a national conference in WashingtonD.C. in May 2008. For more information, go to www.cfwbr.org/womenofcolor. Erica Bridgman is a writer and radio producer. Contact her at bridgewalker99@yahoo.com.
Author: Source: Erica Bridgman Freelance Back to Press Releases | Press Release Archives

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http://www.cfwbr.org/press/details.php?id=193

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