Minority women priming economic growth
By Jim Hopkins
SAN FRANCISCO It's lonely at the top especially for minority female business owners, according to a major study out yesterday.
One highlight of the survey is that minority women are more likely than white women to start and run businesses by themselves. Their goals are often altruistic, such as serving their communities. And many have more trouble than white women getting financing, says the study by the Center for Women's Business Research.
Still, the top issues for female business owners hiring, boosting revenue and finding capital are largely the same regardless of race or ethnicity, says the center. Those issues mirror the concerns of all small-business owners.
But minority women often differ from other business owners in how they manage, and in what drives them to start companies, the study says. Corporations want to learn these differences so they can better target their products and services, says Patti Ross, IBM's executive in charge of selling to female-owned firms. IBM, Wells Fargo and other big companies want to tap the market because of:
- Faster growth. Although minority women own just 5 percent of the nation's 22 million companies, their fast growth is accelerating. The number of such companies grew four times the U.S. average from 1997 to 2002 vs. three times the average from 1987 to 1996.
- Viability. Black and Hispanic women are more likely now than in the past to start their companies as full-time ventures. That's another sign that more women are treating startups as serious ventures that could grow adding jobs and expenditures on such things as computers and banking services.
The differences between minority and white business owners are especially pronounced among black women, who own more than 365,000 firms. For example, 72 percent of black women start or buy their businesses without partners, vs. 62 percent of white women, the study says.
They also are more likely to say they have altruistic business goals, such as serving their communities or being role models. Wanda Stephens, 44, started her computer training firm near Cleveland partly because she wants to schedule her day around Bible study and her husband's ministry.
What's more, 27 percent of black women cite financing problems, vs. 14 percent of white women. Black women may cite more obstacles because they have less experience with lenders or may suffer more overt discrimination, says Patricia Greene, an entrepreneurship professor at the University of Missouri.