Today, Black and African American women are driving small business growth and are one of the fastest-growing groups of entrepreneurs in America. Currently there are 2.1 million small businesses owned by Black/African American women in the United States who employ 528,000 business employees and generate $98.3 billion. In total, Black women represent 14.8% of all women-owned businesses.
To give some perspective, after the 2008 financial crisis, women-owned businesses, in general, had not only recovered but had surpassed average revenue levels from before the crisis to 2008: $172,000 in 2019 compared to $151,700 before the crisis. However, this was not the case for Black/African American women-owned businesses, whose average revenue was $35,600 in 2019 compared to $40,400 prior to the crisis. Fast forward to COVID-19, Black women-owned businesses came out stronger after the economic shock of the pandemic, with average revenues for these businesses increasing 32.7% between 2019 and 2023 compared to all women-owned businesses’ with a 12.1% rise. And now, Black/African American women business owners have outpaced growth between 2022 and 2023 in terms of employment and revenue compared to all women-and American/Black men-owned employers.
Whether Black/African American women were starting, stabilizing, or growing businesses, they benefited from government stimulus money, corporate and nonprofit support, and increased focus on closing economic disparities. As we celebrate Black Small Business Month, it is as important as ever to acknowledge this momentum, while also recognizing the fact that gaps still remain. So how can we continue and build upon this trajectory?
Creating an ecosystem of support
Capital is the fuel to start and grow businesses. Making more credit options available to diverse business owners can be the difference between a business’ survival and its closure. In addition to traditional lending, working with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) can create an ecosystem of support that provides additional avenues to accessing capital. These institutions specifically work with underserved entrepreneurs including those in low-to-moderate income areas and minority populations.
Supporting these organizations and their mission is at the heart of the creation of Wells Fargo’s Open for Business Fund, an industry-leading effort that has donated roughly $420 million to support nonprofits who serve small businesses; the Small Business Resource Navigator, an online portal helping connect small business owners to potential financing options and technical assistance through CDFIs; the Capital Pathways Workbook, a free resource that helps entrepreneurs map their capital needs to business goals and objectives; and a $70 million fund in partnership with Hello Alice to improve access to credit and capital for underserved entrepreneurs.
As our work continues toward solving the issue of access to capital, it is also important to highlight the additional challenges outside of (but related to) accessing capital that must be tackled for Black women-owned businesses to continue thriving. In addition to accessing capital, training, technical support, and long-term resiliency planning are needed to help diverse small business owners find ways to pivot their business models and reimagine their products and services so they can meet the needs of an evolving economy. These actions, coupled with more equitable access to capital can help continue accelerating the wider small business ecosystem and help create numerous pathways and opportunities for success.
The power in education and mentorship
Lastly, access to financial education, networks and mentorship is key. Research indicates that 48% of Black women do not know where to go for information when starting a business. But many have the desire to build their knowledge and understanding in a range of topics like marketing, accounting, or financial literacy.
The good news is there are many free resources and tools to help women business owners learn more about how to write a business plan, tips for building your network, how to scale your business competitively, and so much more. The U.S. Black Chamber of Commerce and U.S. Small Business Administration are two other organizations that offer free programs, coaching, networking and more. Additionally, connecting with mentors is a powerful way for women business owners to share best practices and learn from each other, but it’s often hard to know where to find them or initiate those relationships. A new program between Wells Fargo and the Nasdaq Entrepreneurial Center called Connect to More is giving women entrepreneurs complimentary support through its signature Milestone Circles program where women get bi-weekly opportunities to work through specific challenges, celebrate milestones, attend workshops, and connect with small business experts and mentors.
As Black/African American women continue taking the lead in business ownership, we all must continue taking steps to maintain and support their momentum. Whether it is improving access to capital, technical assistance, long-term resiliency planning, or financial education and mentorship, Black/African American women will continue benefiting from ongoing support to keep their doors open.