Study: Arkansas women of color face barriers to entrepreneurship

Entrepreneurship is a difficult path. For women of color in Arkansas, it’s even more difficult because they face significant barriers and resource constraints, according to a study commissioned by the Women’s Foundation of Arkansas in collaboration with the University of Central Arkansas.

The research aimed to identify gaps in the Arkansas entrepreneurial ecosystem specifically for black women as they start their own businesses. (Link here for a PDF of the study report.)

“Many of the resources Arkansas offers entrepreneurs don’t reach women of color business owners,” said Anna Beth Gorman, executive director of the Women’s Foundation of Arkansas. “Women of color business owners have essentially had to figure it out for themselves due to systemic barriers.”

The study began in January 2020 before the pandemic hit and social and racial justice tensions mounted across the country following the murder of George Floyd. The research includes several focus groups with 44 women of color who started and own businesses in the Natural State. Over 100 surveys from others were also collected and analyzed for the report.

Gorman said black women in Arkansas own 60% of all black-owned businesses, and the highest concentration of women-owned businesses is in poorer counties. Yet there are gaps in the funding ecosystem and other resources for this group of business owners. The report found that 72% of women of color surveyed started their own businesses in search of financial security and work flexibility. About half of them also pursued a passion and desire to serve their community.

Access to capital was the number one barrier for participants in the recent study, and after funding they referred to racial and gender barriers. Other barriers include broadband access, knowledge of general business practices, lack of business mentors, marketing support, personal credit, personal income, and access to educational resources.

Only 20% of focus group participants used commercial banks for financing and 71% said they looked to family and self-financing for their start-up, the report says. The group has credited several incubator programs in the state for capital support. Participants noted a large gap in “social capital” for their cohort. The group has benefited from around 20 supporting organizations, including the World Trade Center of Arkansas, Startup Junkie, Arkansas Small Business Technology Development Center, Pretty Girls Rock, and the Arkansas Economic Development Commission.

Only 7.4% benefited from incubation programs, only one participant received funding from an angel investor, 18.5% received assistance from colleges, and 15.7% received assistance from chambers of commerce . Less than 4.6% crowdfunded and 6.5% received help from philanthropic organizations. About half (49%) said they had not sought help from any of the organizations listed, but relied on others in their circle.

The report also looked at how these small business owners fared during the ongoing pandemic. Almost half of participants (41%) said they received additional help from government programs amid the pandemic, but 58.8% said they did not receive additional financial support from COVID-19. A third of respondents said the pandemic had had a somewhat negative impact on their business operations. Some of the biggest hurdles they face include moving to virtual learning, implementing the United States Centers for Disease Control and Prevention, and state Department of Health safety guidelines with equipment. limited personal protection, resolution of supply chain disruptions and redesign of serving sizes and alternative delivery methods.

“Our goal is to work with women of color to create an innovative model of end-to-end support for entrepreneurs while working to remove the barriers they face in accessing essential resources,” said Gorman. “This report shows that the state and philanthropy must take immediate action to support women entrepreneurs of color. “

She said the study reveals a fragmented entrepreneurial ecosystem that does not serve women of color business owners. The new findings demonstrate that the state’s business ecosystem was not designed to serve populations struggling with connectivity and capacity challenges, which are exacerbated by the pandemic, she said.

Participants compiled a list of recommendations for follow-up work for ecosystem builders, stakeholders and other actors within the entrepreneurial ecosystem. This list reveals the need for greater inclusion for women of color business owners in terms of support, access to educational conferences, other forms of access to capital, creation of a resource guide or director of supporting organizations serving this demographic, providing ongoing technical assistance, policy changes at state and federal levels, designing networking events and removing systemic barriers that tend to push women colored closer to the margins.

“Timing and money are key when starting a business,” said Mailena Urso, owner of Big Box Karaoke restaurant and bar in downtown Fayetteville, and one of the women featured in the study.

Urso said in her profile that it’s essential for entrepreneurs not to be afraid to ask for help and to be specific about the help they need. She recommends entrepreneurs find mentors and advocates for the business and themselves who can guide them on the journey.

Tenecia Roundtree, owner of Treehouse Cleaning Service in Conway, said those in power can make information more accessible to women of color trying to start or grow their businesses. She said more transparency is needed because too often there is no generational knowledge to draw on when it comes to financial or business operations.

Shunqetta Cunningham, owner and founder of The Kharis Group and Over A Cup in Jonesboro, provides grant writing, vision and strategic planning, and leadership services to for-profit and non-profit agencies. She started Over A Cup as a networking group with the goal of connecting and empowering black women entrepreneurs in the region.

“Instead of waiting for an invitation to grab a chair at someone else’s table, we decided to create our own with Over a Cup. When we empower women, we also empower our education system, our political system, our economic constructs and more, ”Cunningham said in his profile.

Travena Jefferson, owner of Northern Technical College in central Arkansas, said that too often women of color struggle to legalize their businesses due to a lack of education, knowledge and expertise. She said these things are usually not taught in the household.

“When I started my business as a young woman, I had bad credit and needed about $ 70,000. It was a huge obstacle. I was able to overcome my obstacles by budgeting, educating myself, and taking additional courses and lessons to make my business more sustainable, ”Jefferson said in his profile.


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