Minority Businesswomen Have Entrepreneurial Bug
Women are staking their claim on the American economy, and for many of them, that looks like entrepreneurship. The most recent U.S. Census data shows that nearly 9.9 million women own businesses, making up roughly 36 percent of all firms in the country. In addition, female-owned businesses have increased 45 percent between 2007 and 2016, a rate that is five times the national average for male- and female-owned businesses.
The numbers are remarkable, but there is a surprise within the statistics. The engines powering the growth of female entrepreneurship in America are minority women. Women of color have doubled their ranks as business owners since 2007, now comprising 44 percent of all women business owners.
“I never really knew what entrepreneurs were growing up, but I was surrounded by them because I had both parents and grandparents who owned their own businesses,” says Riana Lynn, founder and CEO of Food Trace, a Chicago-based technology platform designed to help food businesses with growth and supply chain management. “My family was always interested in healthy foods and wellness. I studied biology and chemistry in college, which laid the foundation for my interest in innovating the food system. But I always figured I would do research while working for someone else,” Lynn says.
She spent nights and weekends in grad school creating technology for other companies. She completed her degree and returned to her home city of Chicago. “I began to see gaps in the food system, or the process to get it from farm to table. I wanted to develop a better option,” Lynn explains.
The Right Fit for Her
Women of color now own nearly 5 million businesses in this country. Lynn says there were three main factors that led her to join that group. First, she perceived a hiring gap. Lynn says she didn’t feel there was a company out there that would hire her to do what she wanted to do in the way she wanted to do it. The few corporate options she was willing to consider were not well-known for hiring women and advancing them through their ranks.
The second key for Lynn was a desire to, when appropriate, move fast and have an immediate impact. She says, “I like the flexibility I now have to create products, make money and work a schedule that suits me. It’s exhilarating.” Lynn says she didn’t see that happening for herself if she would have gone to work for a research firm or government agency.
Lynn’s final key to moving into entrepreneurship was lifestyle, both in terms of her daily routine and her finances. She likes the fact that she can work early or late in the day, or from another city, much more often than her peers can. She also says she has the personality to manage her own economic sustainability. “It’s not a steady stream of income. You have to be okay with that lack of stability, and I think most entrepreneurs know their greater payoff is coming. It’s what drives you.”
Lynn admits she’s still learning how to properly balance her personal finances and those of her business. She recently purchased life and disability income insurance through Northwestern Mutual; and in particular, Lynn says, the discussions about disability insurance were something she found interesting. “It would stink if one year I could not code or design my ideas because I got injured. It was interesting to learn how much more valuable that type of protection was for me as an entrepreneur.”
She is also putting money into an IRA. “I was always tempted to put money back into the business instead of taking more as salary, but I’ve learned I need to ramp up my salary for my long-term retirement needs,” says Lynn. She says it used to feel selfish to set money aside for her future, but now she says, “I realize that I would regret not having a savings and retirement plan because I was a risky entrepreneur. Long term, I hope to become more stable each year and then also to build more businesses and help other people become more stable.”
Finding a Way to Make It Work
Many experts agree—and studies have shown—that minority women experience a tougher time compared to white women when trying to gain investors or access to capital to begin a new venture. That may be one reason businesses owned by minority women still tend to be smaller and make less revenue when compared to those owned by white women.
Lynn has seen these stats play out in her own life, requiring her to dip into her savings several times to try new things when she couldn’t find the investors she needed. Still, she kept fighting to follow her vision. She now tells minority women who are trying to jump into a venture that will not generate an immediate cash flow to find ways to monetize their ideas to generate revenue. “It takes time, and it takes iterations. But in the meantime try consulting or building products manually instead of paying to have processes automated. Figure out ways to test your idea; gain revenue; and then you can really build a solid footing, which will eventually allow you to jump into your own business.”
In addition, Lynn suggests building a support network. Women in tech are a rarity. (The greatest numbers of women-owned businesses are in categories like nail and hair salons, pet care, health care and child care.) That’s one reason Lynn has begun giving back as a mentor to other minority women and by starting Women Tech Founders, a group that tries to advance women in technology. She adds, “That’s really exciting for me. I do feel like I now have something to give back and share.”
Lynn has no intention of stopping anytime soon. Her next goals are to create products and systems that will eliminate food waste and bring healthy products to consumers. The entrepreneurial spirit lives within her. Her story is just one among millions of minority women who are conquering the challenge of entrepreneurship every day in the U.S., and with their ideas they also bring fresh changes to the landscape of the American economy.