Minority Women Small Business Owners on the Rise

Suzanna de Baca -- Expert Business Source, 10/20/2008 6:42:00 AM

When I take a look around the Midwest, I’m constantly surprised and pleased by the number of minority women entrepreneurs I see creating exciting new business ventures. From nail salons and cleaning services to retail stores and professional firms, minority women-owned businesses are on the rise across America. As a Hispanic woman with my own financial advisory firm, I’m proud to see women from a wide variety of ethnic backgrounds taking the leap into entrepreneurship.

A new study released Oct. 14, 2008 by the Minority Business Development Agency (MBDA) confirms what I see around me every day. The study reports that minority women-owned businesses are growing twice as fast as those businesses launched by male minority or non-minority men and women.

The information released was based on U.S. Census Bureau 2002 Survey of Business Owners and the 1997 Survey of Minority-Owned Business Enterprises. Among American minority women, Native Hawaiian and other Pacific Islander women-owned businesses grew at a phenomenal rate of 84 percent. African-American women’s businesses expanded by 75 percent, and Hispanic women-owned businesses by 60 percent. Those businesses created and owned by women of Asian origin grew at 40 percent.

Taken together, this represents an explosion. Minority women-owned businesses overall grew by 57 percent between 1997 and 2002. By contrast, minority male-owed firms lagged behind at 31 percent growth and non-minority owned start ups were about half of those started by minority women.

In a press release announcing the study, MBDA officials suggested that one of the main reasons that these businesses are growing so rapidly is due to programs developed by the agency and by the Small Business Administration. More programs on small business ownership are being targeted to this highly entrepreneurial group. Many states have specific programs focused on providing business training and assistance to minority women who are interested in business ownership.

A spokesperson for the study cited other fairly intuitive reasons for women starting their own businesses: the desire for flexibility of hours and control of their schedules so they could spend time with family. While anyone who has owned a business knows that it can be very demanding on one’s time and fraught with risks, it is true that you can make the choice to work non-traditional or variable hours. Other women start their own businesses out of a desire to be in charge, especially if they perceive that the glass ceiling or discrimination may prevent them from rising to positions of higher responsibility in the corporate world.

The study showed that as a whole, minority women are more likely than their male or non-minority counterparts to start franchise businesses or to create export businesses. Minority women own businesses in a wide variety of industries, but the report shows that they are concentrated in health care and social services; dry cleaning and personal care services; retail; administrative, support and waste management and remediation services; and professional, scientific and technical services. Women are more slowly becoming involved in traditionally male fields such as scientific services, construction and IT, but are making inroads.

The majority of businesses owned by minority women are small and are generally capitalized with the women’s own money or loans from family and friends. As women gain experience, it is likely that we will embrace other forms of capitalization and make progress in opening larger businesses or grow our businesses at a more rapid pace. Right now, however, minority women are making great strides in simply launching and running their small businesses.

Suzanna de Baca is president of Private Capital Solutions Group. Securities offered through Broker Dealer Financial Services Corp. Member FINRA & SIPC. Investment Advisor Representative of Investment Advisors Corp., A Registered Investment Advisor.  Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice