5 Reasons Why Entrepreneurs Are Preferred

by The Insights

Opinions expressed by Entrepreneur contributors are their own.

As a Black female entrepreneur, I managed to successfully run a Diversity, Equity and Inclusion (DEI) consultancy for the past six years. But I promise you it wasn’t easy. For me, becoming an entrepreneur was like getting a doctorate in organizational leadership and becoming a business owner. Despite the years I have dedicated to my entrepreneurial journey, I have still benefited from a level of privilege that many do not share when it comes to entrepreneurship.

I’ve spoken for years about how black women don’t get the support or mentorship they need in the workplace to succeed, as well as the many ways black entrepreneurs struggle in this space. But we should talk about the privilege that those of us who TO DO succeed in business have. We should also talk about why people from marginalized communities start businesses from scratch and how their entrepreneurial endeavors can be sustainable and successful.

The complexities of privilege in entrepreneurship are vast but worth discussing. We need to peel back the layers to find out how more entrepreneurs from marginalized communities can lift themselves out of poverty and into prosperity.

Related: 18 Business Leaders on Creating an Inclusive and Fair Society

1. Having seed funding is a privilege

How will I fund my business? This question hangs over many entrepreneurs. When 66% of them use their own money to start a business and 33% start with less than $5,000, that’s a very valid concern. This means that while they weren’t born with a silver spoon in their mouths, some people have to look beyond their personal bank accounts to start their business.

Venture capitalists, friends, family, or bank loans are financing options, but most come with serious strings attached. It’s a privilege to have access to these resources in the first place, but it can feel overwhelming to have to ask, in general. Knowing that the loan you used to start your business will double, triple or quadruple your personal debt is a disheartening realization.

I was lucky that when I started my DEI consulting business, I didn’t have to fight for funding. I had the privilege of having a husband who preceded me in his entrepreneurial journey. His business efforts have given me the freedom to build my consulting practice without the pressure of having to contribute to our household income. Not everyone has this opportunity. Equitable access to financing for a business is not easy to find and every entrepreneur is in a different position on the spectrum of privilege and oppression when it comes to financing.

Related: 6 Ways to Offer an Alliance to Black Entrepreneurs

2. Having other entrepreneurs to look up to is a privilege

Whether it’s a parent, grandparent, aunt or uncle, having someone in the family who is an entrepreneur helps fulfill the dream of starting a business. own company.

I didn’t have an entrepreneur in my family, but my husband did. His father was the example that inspired a ripple effect of entrepreneurs in the family. Watching his family members start, grow and scale businesses was inspiring to watch. As we all know, representation matters. Watching like-minded entrepreneurs experience the ups and downs of business helps us know that our dreams are possible.

However, if we’ve never seen entrepreneurs like us, it’s harder to imagine how starting and growing our businesses would be possible. For some of us, having access to a successful entrepreneur in our lives is a privilege that likely impacts the success of the businesses we hope to build.

3. Having a college education before starting a business is a privilege

As someone who received his doctorate, I belong to the minority of entrepreneurs: 62% of entrepreneurs have at least a bachelor’s degree while 7% have a doctorate or another degree. I also enjoy additional financial benefits through my education privileges. It turns out that entrepreneurs with a doctorate earn 35% more than those with a high school diploma.

But not all entrepreneurs have the privilege of going to university. Many people choose entrepreneurship because of the seemingly limitless earning potential it promises, even those with only a high school diploma. For many marginalized people who have not had access to college or university, entrepreneurship may seem like the only way out of their economic situation and into a brighter future.

4. Having a business that lasts more than three years is a privilege

Although black women are one of the fastest growing entrepreneur demographics in the United States, CNBC reported that eight out of 10 black-owned businesses fail within the first 18 months. Having a great business idea and funding to accelerate your journey will help; however, sustaining a business for more than five years is a rarity. About 49% of women-owned businesses are less than five years old and as we approach the six to ten year window, that number drops to 17.5%.

There are many reasons why the privilege of corporate longevity is not given to everyone. Funding runs out, an unexpected business emergency arises, or the entrepreneur simply changes his mind about his business. Whatever the reason, having a business that lasts for decades is a privilege that some marginalized entrepreneurs can only dream of.

Related: 10 reasons why 7 out of 10 businesses fail within 10 years

5. Starting your own business can actually create privilege

In light of recent nationwide layoffs in many industries, now is one of the best times to try entrepreneurship. The main motivations for becoming an entrepreneur are the many ways it can grow and expand our financial and personal future. Research shows that women who start their own business do so because they are willing to pursue their passions and work for themselves.

Entrepreneurs of color start businesses for similar reasons. Dissatisfaction with their boss and the lack of diversity, equity and inclusion in corporate America are driving many to start their own business.

More importantly, for many entrepreneurs, their salary ambitions can reach new heights. While the average woman earns 82 cents for every dollar earned by a man, the average female entrepreneur earns 91 cents. While a one-to-one earnings ratio is the best-case scenario, it’s clear that for many women, starting their own business helps them close the wage gap.

The lifestyle and flexibility benefits of entrepreneurship also cannot be overemphasized, such as working from home with hours that fit your schedule. The ability to parent or become a caregiver to a loved one or simply avoid microaggressions, pay disparities and unequal treatment at work are all new privileges offered by starting your own business. . For many marginalized people, this kind of economic and personal freedom is a dream that can only be realized through entrepreneurship.

Related: Why paying women equal pay helps—not hurts—your business

Final Thoughts

As marginalized people balance the pros and cons of becoming an entrepreneur, those of us who have already succeeded in this space should ask ourselves: what can we do to nurture more entrepreneurs from marginalized communities? How can we take advantage of our privilege and our power to be sensitive to the issues facing new entrepreneurs? How to finance them and support them in the most critical stages of their activity?

In my opinion, successful entrepreneurs have an obligation to share their privilege with others and help more people confidently enter the entrepreneurial space. Say the names of new entrepreneurs in the rooms that matter. Offer a loan or donate capital to entrepreneurs in marginalized communities. Mentor new entrepreneurs and flatten their learning curve so they’re more likely to thrive beyond the five-year mark.

Sharing entrepreneurial wisdom and offering resources when available can help more women, people with disabilities, queer people and people of color succeed as entrepreneurs and advance their careers beyond the imagination.

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