Companies are still struggling to uphold the values of diversity, equity and inclusion efforts. But in the entrepreneurial space, BIPOC small business owners are showing real promise.
Twenty-nine percent of small businesses are now owned by respondents identifying as BIPOC, compared to 17% in 2019, according to new research from GoDaddy Venture Forward, a research initiative focused on small businesses and their impact on local economies. And at the forefront of the movement are Black women, who own two-thirds of the small businesses owned by the BIPOC community.
"Black women turn to places like entrepreneurship in an effort to help their family and create generational wealth because that hasn't been prevalent in the BIPOC community," says Ebony Janelle, the leader of Empower by GoDaddy, which provides training, digital tools and resources to entrepreneurs from underserved communities. "They want to be able to pass something on to their children, so they've decided to take whatever passion they had and turn it into a business."
Read more: Women make up just 34% of STEM jobs. Look to college campuses to close the gap
One in six small business owners earn more than $100,000 annually, according to GoDaddy's research, and out of those, nearly three out of ten women owners consider themselves the breadwinners in their home. The U.S. Small Business Administration Office of Advocacy also found that Black-owned businesses are currently generating $206 billion in annual revenues and employing 3.56 million workers.
"Not only are the local economies and the national economy profiting from an uptick because of new businesses being started, but I think they're also leading the next generation into that sort of space," Janelle says. "When you see Black women, or women of any race and background, become successful entrepreneurs, it's teaching the younger generation that if they can do it, you can do it, too."
A 2022 YPulse research survey showed that the majority of BIPOC young consumers aspire to be an entrepreneur, with many teens and college students of color already starting their own ventures. Many of those young BIPOC-founded businesses tend to focus on supporting their communities, from beauty supply vending machines to lines of empowering doll collections. However, BIPOC entrepreneurs still receive less funding than their white counterparts, according to YPulse, indicating a continued lack of support despite the major improvements made toward diversity efforts.
Read more: Why are employers still prioritizing the white male experience at work?
But unlike tackling equity — or the lack thereof — in large established companies, which can be done through purposeful policy changes and codes of conduct, it's trickier with the entrepreneurial space, according to Janelle. To make a real difference, the equity efforts will have to be systemic and come from consumers that engage with small businesses, as well as the non-profits and regulators that create and mandate the resources available to entrepreneurs.
To put this into effective practice requires ensuring that the systems and processes that entrepreneurs are going through in order to open their businesses, such as the registration and banking process, is done so with a lens of equity, Janelle says. And if it's not, it's up to the consumers to act as a check and balances and make a deliberate effort to recognize, promote and reduce bias.
"People need to realize that diversity, equity, inclusion and belonging are core to who we are as human beings," Janelle says. "And that's the best way to help everyone up and along in the system, and to make sure that we're doing equitable and inclusive practices."
