Jen Braswell ran Hour Cycle Studio in Richmond for two years, but the space outgrew it. While she was looking for her new residence, her landlord not only offered her unfavorable terms, but also required her husband to co-sign her rental agreement. Braswell was stunned. Her husband has nothing to do with her business. She earned her bachelor's degree at the College of William & Mary, Virginia she earned her MBA at Commonwealth University, and she's already had one successful full-time job. .
“I felt like it was because I was a woman,” she says. “My male friend never asks his wife to sign it. If I were a single woman, would I ask her father to sign her lease?”
When Christine Haines Greenberg opened her luxury boutique Urban Set Bride in 2014, she sensed some of her customers were feeling anxious.
“Being in a historically black neighborhood is important to us, but some of our customers don't feel comfortable coming to Church Hill,” she says. “Unconsciously, some people see a 'black-owned business' and think it can't be that good. I can understand that they're surprised when they come in. It's not outright racism, but it's a tingling feeling. I feel that way.”
Elsie Harper Anderson, a Ph.D. in urban and regional planning who studies equity in Richmond's entrepreneurial ecosystem at VCU, hears these stories more often than she would like. “In 2023, you’re going to think, “Wow! [such] My mindset has calmed down, but I’m still not calm,” she says. “Women-owned businesses are not necessarily viewed the same way. And at the intersection of black and female, it's even more difficult, and stereotypes and misconceptions still exist.”
According to a recent study by the Pew Research Center, about 3% of racially disaggregated U.S. businesses are owned by Black adults, even though they made up 12.4% of the population in 2020. In contrast, white Americans own 85.6% of US businesses with employees representing 59.3% of the population.
Overall, 63% of classifiable businesses are owned by men, 22% are owned by women, and the rest are jointly owned by men and women. Among black-owned businesses, 55% are owned by men, 37% are owned by women, and 8% are jointly owned. Pew points out that 4% of U.S. companies cannot be categorized by race, but such companies generate 62% of all revenue.
“The statistics are dire and deplorable,” says Rashida Clayton, co-founder and executive director of the Jackson Ward Collective (JWC) Foundation in Richmond, which provides resources to minority businesses. “Opportunities are not equal and the barriers to access are huge.”
for the first time in a generation
In 2019, Clayton, Kelly Lemon, and Melody Short created a foundation to help minorities overcome barriers and break glass ceilings. The organization's name pays homage to early pioneers in Richmond's Jackson Ward neighborhood, including Maggie Walker, a daughter of slaves who became the nation's first black woman to establish a bank in 1903.
Clayton was inspired to found the JWC Foundation while serving as executive director of Richmond's 1717 Innovation Center for budding entrepreneurs. There, she recalls, “Many of the participants in the program were not like me.''
She is applying her experience in startups and the knowledge she gained while working toward a law degree to build diversity in Richmond's business landscape. The foundation provides budget guidance, legal services and business classes to help minority businesses prepare for their next steps once they have seed money. The popular BLCK Street Conference will be held on August 6th and August 7th.
Clayton says the generational wealth gap is real, and many African Americans don't have friends or family to write them a check. One of the foundation's missions is to provide a backbone of such support.
Creighton and Harper-Anderson note that being the first in a generation is difficult, whether it's going to college, entering politics, or running a business.
“The literature shows that if your parents own a business, you are more likely to be a successful business owner,” says Harper-Anderson. “But especially for African Americans, their parents were less likely to be entrepreneurs. You can't just call your parents and ask them how to run a business.”
cost of business
According to Entrepreneur magazine, if Cycle Studio owner Braswell wanted to open a franchise for an established brand like CycleBar, he would need $100,000 in cash to do so, and his total investment would be It is said to be close to $500,000. And if you needed a loan, there was a high probability that you would be turned down.
According to JPMorgan, black business owners are three times more likely to be turned down for funding than white business owners. “Black women are the most underfunded group,” Clayton said. “My family doesn't have the funds, so I often go for loans, but taking a loan means taking on even more debt.”
Many business owners need capital to grow their business and hire more employees, but are unable to obtain a loan line through a bank until their first two years in business. you can't. This is a catch-22. You need credits to earn credits.
Rather than take advantage of a mass-market franchise, Braswell created a business plan tailored to a niche audience. Instead of taking out a loan, she put her own money into her own cycling studio. According to Harvard Business Review, more than 60% of Black startups are self-funded.
Using his personal savings, Braswell bought a Schwinn bicycle designed for fixed rotation for $3,000, rented studio space, insured it and hired a team of instructors. When starting her business, she sought help from the experts at her JWC Foundation.
“My husband is a lawyer and has an MBA, but he had never run his own business before,” Braswell says. “JWC was a treasure trove of everything I didn't know. I will be forever grateful to them until I leave this earth.”
Today, Hour Cycle Studio is a success, classes are full, and Ms. Braswell has signed a fair lease without her husband.
Harper-Anderson says too many Black and women-owned businesses have to fight for resources and often don't know where to look. Before opening his bridal shop with his mother, Greenberg spent hours searching for business grants while juggling his career as a wedding consultant.
“The barriers to entry are very high and traditional banks can be intimidating,” she says. “We needed a commercial space that wasn't expensive and didn't require additions. We didn't have the luxury of going to Lowe's every day to fix things.”
In addition to a grant to start the business, Greenberg and her mother relied on a business credit card and savings to purchase computers, lighting, and inventory. They received two grants totaling $12,500 over the past nine years through the nonprofit Local Initiatives Support Corporation's SEED program in partnership with Bon Secours and Capital One. Greenberg is using the most recent grant awarded in 2022 to upgrade her store to serve a broader and more comprehensive clientele.
“Banks are looking for larger loans over longer periods of time, but you'd be surprised what $5,000 or $10,000 can do to move your business forward,” says Clayton. “People want to know how to solve this problem. Write a check to a black woman.”
When women enter the technology field, it is also difficult to obtain funding. In the U.S., only 2% of venture capital funding goes to all-female founder teams, according to PitchBook data. Harper Anderson would like to see more resources available in Richmond and efforts to encourage more Black women to enter the technology field.
“Black women are not taken as seriously as entrepreneurs and are not recognized as innovators, especially in technology,” Harper-Anderson said. “I came to Richmond 11 years ago, and when I went to entrepreneurial events, I saw very few African Americans. If I did, it was probably men.”
What the numbers say
Richmond has been talked about as a favorable environment for black-owned businesses. According to the Greater Richmond Partnership, 5.9% of Greater Richmond's businesses are Black-owned, more than double the national average, and the city ranks sixth in the country. But despite the progress, Harper Anderson says Richmond can be better. Approximately 29% of Greater Richmond's population is Black or African American.
Part of the problem lies in the data. “I’ve been doing research on race in the Richmond area, and the data on entrepreneurs is definitely incomplete,” she says. Additionally, “a lot of energy is focused on race and less on the relationship between race and gender.”
For example, the U.S. Census Bureau's Annual Business Survey does not include minority-owned businesses and women-owned businesses, and only reports businesses with two or more employees.
“There are limits to what you can do if you don't recognize that it's a one-man show,” Harper-Anderson says. “More than 90% of black businesses have no employees. Businesses can actually be much larger and contracted out. The fact that the data does not recognize sole proprietorships tells us exactly that. It creates a perception that they are less valuable.”
Before the COVID-19 pandemic, Black women were the fastest-growing group of entrepreneurs in the country, increasing by 50% from 2014 to 2019 and increasing the number of companies in total, according to JPMorgan. The number of companies reached 2.7 million. But in 2020, women in particular faced further setbacks.
“Women-owned businesses have been more severely affected by the pandemic because they are the primary caregivers. Their children have had to be home-schooled and they have had to take care of sick family members. There wasn't,” Harper-Anderson said. “Women were bearing a disproportionate burden.”
Greenberg felt the pressures of being a small business owner when she had to close her bridal shop for months during the pandemic. Not only was her wedding postponed indefinitely, but she also faced inventory shortages from China while caring for a new baby.
“Women are generally underrepresented,” Greenberg said. “I see women all the time planning weddings while working two full-time jobs. We're pretty amazing.”
A lot of energy is focused on race and less on the relationship between race and gender.
—Elsie Harper Anderson, VCU Professor of Economics
Some women, like Tracy Wiley, have used the pandemic to launch new careers. When her mother asked how she would be able to raise a family and balance her full-time job with her side hustle, Ms. Wiley simply replied, “Be careful.”
Under the government. Ralph Northam and Terry McAuliffe, Wiley led the Virginia Office of Small Business and Supplier Diversity. In the state, he oversaw a disparity study that analyzed contracts and financing awarded to minority-owned businesses. The study found that from 2014 to 2019, 13.4% of all contracts in the state were awarded to women- and minority-owned businesses. Wiley said that number should be closer to his 33% based on his eligibility.
“COVID-19 has changed the way I think about my career and made me want to contribute in a different way,” she says. “Policy affects everything from how companies grow, how they receive access to capital, and how much tax they pay. , there are no lobbyists. I want to work behind the scenes for organizations and companies that don't have a seat at the front table.”
Through her consulting firm, Rainmaker Industries, she has worked to support and advance minority businesses, serving clients such as the Virginia Minority Business Development Agency.
Wiley says that while there are still many challenges for minorities in the business world, she has seen changes since the Black Lives Matter movement in 2020.
“There was a rebirth, a refreshment, and an intentional message to make sure people were on board,” she says. “I work with companies to look at their employees, understand them, and make them feel like they belong. We need to think more about different audiences and customers, I try to accept them for who they are. Change is happening.”