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Black women take lead in starting new businesses

The number of businesses owned by African-American women in the Bay Area — and the United States — has been soaring, according to a new government report.

In San Jose alone there are a number of such businesses, including the Black & Brown thrift shop, Lillie Mae’s House of Soul Food, Strictly Styles Salon, Krazy Komb and others.

In fact, the number of such businesses in the United States has more than tripled since 1977 to 1.9 million, according to the U.S. Census Bureau’s 2012 Survey of Business Owners, released last December. Of those, about 12,000 are in the Bay Area counties of Santa Clara, Alameda and San Francisco. Few other groups of minority women are starting businesses at a faster clip, according to the report, which is updated every five years.

While this may seem like a highly encouraging trend, a deeper look at the data — especially revenue, and the reasons many of these women go into business in the first place — suggests things may not be quite so rosy.

Anita Gardyne, CEO of Oneva, an East Bay firm that provides specialized in-home and on-the-go health care services, is one of those who have decided to invest in herself. After losing a senior position in a corporate setting during the recession and finding it hard to get another good job, Gardyne thought about how she could take care of herself and her family by launching her own business.

Previous generations of black women couldn’t even dream of starting their own business, she said, so times have changed.

It’s not so easy, and black women face special obstacles. But with enough persistence, determination and skill, it’s not impossible.

“It’s a great time to be a black woman CEO; it’s the best time in history,” she said. “It’s still hard, but it’s the best time. I am in control of my own destiny.”

She recalls coming away from meetings with potential investors wondering why one person’s business attracted capital and hers didn’t. “I see deals that I think are unfair, but I stay out of it,” she says with a rueful laugh. “It’s like trying to get in between someone’s marriage. You just don’t do it.”

It doesn’t get much easier for black women who own their own businesses once they get started. “We have to be twice as fast and twice as good,” she said. “What other people get a dollar to do, we have to figure out how to do the same thing with 67 cents.”

Indeed, black women may be the fast-growing segment of entrepreneurs, but the U.S. Census Bureau noted in its 2015 report that those businesses tend to be among the smallest and derive the least amount of revenue. Between 2015 and 2016 average revenue fell from almost $40,000 to about $26,600, according to “The State of Women-Owned Businesses,” an annual report by American Express Open. Also, few of them employ others to help them run their businesses.

In many ways, black female entrepreneurs are determined to fill a neglected niche. Efiya Asabi, owner of Iyoba Body Essentials, a small cosmetics business in Oakland said, “I was tired of big corporations selling us products that don’t work for our skin.”

She started a line of organic soaps after store-bought creams inflamed her daughter’s eczema. “We are trying to live as clean as possible,” she said.

Asabi talks about the history of economic life in the black community, and how the recession left so many with no choice but to fend for themselves.

“It is a legacy in African-American culture to make ends meet,” she said.

“Using the skills we inherently have to earn profit dates back centuries ago, but the depression was definitely a wake-up call for many.”

In 2007, business launches were declining because of the recession, causing employment to be scarce. However, “Between 2007 and 2016, the number of African-American women-owned firms increased 112 percent,” the American Express Open report said.

As Margot Dorfman, chief executive officer of the U.S. Women’s Chamber of Commerce, said in an interview with Fortune magazine in 2015: “We attribute the growth in women-owned firms to the lack of fair pay, fair promotion, and family friendly policies found in corporate America. Women of color, when you look at the statistics, are impacted more significantly by all of the negative factors that women face. It’s not surprising that they have chosen to invest in themselves.”

Walter Wilson, the director of Minority Business Consortium, an organization that provides under-represented firms with the connections to expand their businesses, said black women are discovering their previously unrealized power in the world of entrepreneurship.

“If you take the women out of it, everything stops,” Wilson said. “They’re natural-born leaders.”

 

By Mercury News

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