An Economic Force

Minority women-owned businesses at a crossroads

As the number of women entrepreneurs of color has soared  over the past quarter century, experts say women of color have become a  significant economic force and have reached a historical juncture in the nation  as both women and minorities are increasingly thriving.
 
“They have the combination of the two worlds. I see their  advancement in corporate America as well as in the small business world. They  are being encouraged to take more risks,” said Dr. Alicia J. Jackson, dean of  Susquehanna University’s Sigmund Weis School of Business and among the growing  number of women heading business schools around the country.
 
“Part of the education of introducing women to business is understanding  there are educated risks you can take as long as you balance it with some level  of hedging.”
 
Women entrepreneurs of color in the country tallied just 388,309  with $18 billion in gross revenues in 1987, the first year the U.S. Department  of Commerce’s Minority Business Development Agency began specifically tracking this  demographic.
 
By 2002, the latest data from the agency recorded a 300  percent increase to 1.5 million companies that were at least 51 percent owned  by women of color. Those companies recorded $111 billion in gross receipts – an  increase of 500 percent.
 
The Center for Women’s Business Research has followed the  trend through 2008 for firms owned at least 50 percent by women of color and estimates  today there are about 2.3 million such companies generating $235 billion in  revenue.
 
“Women of color have made great strides in establishing their own  businesses – they see entrepreneurship as a key to freedom and wealth  creation.  They are getting more education and more experience in the  workplace than they were 20 years ago.  They have branched out into more  traditionally male dominated industries, such as construction and IT, and are  achieving great success,” said Edith McCloud, associate director of MBDA’s  Office of Administrative and Financial Management.
 
“While the glass ceiling still exists in corporate America and  women seek to fulfill their entrepreneurial dreams, you will continue to see  talented women launching their own businesses.”

Entrepreneurial women of color represent the fastest-growing  segment of privately held firms in the nation, establishing businesses twice as  fast as male minority business owners and more than four times the rate of  non-minority men and women.
 
While minority women entrepreneurs still trail minority men  business owners and non-minority entrepreneurs in gross revenues, their soaring  numbers increasingly are turning them into a force in today’s financial world.

Dr. Jackson said that as an African-American she was helped  by The PhD Project sponsored by the CPA firm KPMG’s foundation www.phdproject.com , after the company in  1994 set out to diversify its workforce through educating minority students for  academic posts. While affirmative action programs were being successfully  challenged in the courts, such private efforts helped fill the gap and lead to  a steady climb in minority business professors.

Today, Dr. Jackson said minority women have far wider  horizons than previous generations.
 
“I think they recognize their options in business are wide  open ...  Business speaks a language that’s  not color-based - other than green.”
 
Susan Gluck Mezey,  chair of Loyola University Chicago’s political science department, told NAWBO  in a recent interview that women of color also have moved ahead in the  workplace by standing up for their rights in court, prevailing in discrimination and sexual harassment cases where historically they have been  disproportionately affected.
 
“Discrimination has  played a huge role in depressing women’s opportunity and pay, in general, and  for women of color in particular,” Mezey said.

Mitigating many of the inequities – though not pay gaps, yet  – have been a flurry of anti-discrimination cases in the courts and Congress.  That was punctuated recently by President Obama’s signing of the Lilly  Ledbetter Fair Pay Act, which extends the statute of limitation for filing wage discrimination complaints.
 
The new administration also is signally its intent to  address historic barriers to women in the workplace in other ways, Mezey said, noting  the First Lady’s recent appointment of Harvard classmate Jocelyn Frye as her  policy and project director. Frye has been a longtime and outspoken proponent  of affirmative action and workplace equity while working on behalf of women and  families.   
 
Mezey said some social obstacles still are unaddressed - from  single parenthood to teenage pregnancies - that serve as obstacles to many. And  women – who are less likely to be unionized in much of the country – also are  absorbing ramifications of the current recession through layoffs and the too  often concomitant loss of health insurance. 
 
Olga Martinez, president of Allright Diversified Service  Inc. in Fresno, Calif., knows what it took to break into the male-dominated  general-construction business a decade ago. But while she says it was  difficult, she also says no woman of color should be deterred any longer.
 
“You do run into – I wouldn’t call it discrimination – but  I’d call it where the opportunities aren’t handed to you. I‘d go to huge  conferences in different parts of the country and be in circles of men talking  about the construction industry and they’d look at me like, ‘How can you have a  construction company?’  They’d assume it  was my husband’s, which I don’t have, or father’s, or brother’s. When I said I  was at the top, they knew I was a force to be reckoned with.
 
“After awhile, with guidance and prayer, I got very  comfortable in the industry. If I didn’t have an answer, I’d go even to a man  to get an answer.”
 
Over the years, Martinez said she’s observed how much minority  women entrepreneurs’ confidence has grown.
 
“When I’m out networking I see more and more courage.”
 
Martinez, who was  affiliated with the Los Angeles NAWBO chapter until she was forced to cut back  due to health problems, said the organization is emblematic of women  organizations that are “incredibly useful and valuable” to women entrepreneurs.
 
“They often have  dynamic speakers and within the organization there are dynamic women. We share  our stories, our successes and failures. It’s extremely important.”
 
Martinez said the federal Section 8(a) program also was a key  for her firm. Under the Small Business Administration, it provides for  disadvantaged businesses - mainly owned by minorities and women - to compete  for federal work through sole-source contracts or set-asides.
 
By obtaining a mentor to help navigate the complex program,  attending conferences to network and get training, and learning the intricacies  of the federal system, Martinez has propelled Allright Diversified into a company  with about two dozen employees – a workforce that swells during larger jobs  usually involving either erecting or demolishing buildings on military bases  around the country.
 
“In this industry, if you want to have the opportunity of a  level playing field, you have to find out who in the country offers that opportunity.  Now all women have an opportunity to seek SBA Section 8(a) contracts as long as  they fall within the disadvantaged criteria. It’s been phenomenal,” she said.
 
Martinez said the SBA provided training and education, but  that any success requires an entrepreneurial willingness to “hustle” and travel  almost anywhere for jobs.
 
“There are programs, seminars, mentors, and conferences  encouraging minorities and women of color to go for it,” she said.
 
Martinez also said women of color, and all women, need to  come together to advance their business through education, shared experiences  with technology, and workplace opportunities.
 
“I think when women find they aren’t alone - and they can  call other women for support - I think it gives us a stronger confidence level.  We’re realizing it’s tough out there … but I really believe anything and  everything is possible.”