Business is no longer just a boy’s club. While men continue to own the vast majority of businesses in the United States, there is an increasing number of women business owners as well as a steadily growing number of resources aimed at helping women start their own ventures.
According to the U.S. Census Bureau, there were 27,626,360 total companies in the United States in 2012. Of that total, 14,844,597, or 53.7 percent, were owned by men. There were 9,878,397 firms owned by women – 35.8 percent of the total number. The number of minority owners – which includes both men and women – was even lower at 7,952,386 or 28.8 percent.
One Arkansas organization is working to increase opportunities for women business owners in the state and provide these individuals with greater access to necessary resources for success.
The Women’s Foundation of Arkansas (WFA) will be participating in Regional Women’s Economic Mobility Hub program, a national project established by the Women’s Funding Network. Through this program, WFA is aiming to support women-owned businesses through educational efforts and providing resources, including capital.
The Economic Mobility Hub program is an 18-month-long project that is being funded through the Bill & Melinda Gates Foundation. Its goal is to “increase support and resources necessary to advance economic mobility among women and girls,” according to a program release.
“They’re looking at ways to invest in economic mobility in traditionally marginalized communities. Of course, when you at the gender wealth gap…we have a long way to go to catch up with their male counterparts,” WFA executive director Anna Beth Gorman said.
WFA is not the only foundation that will be participating in the program. It is part of a cohort of eight other organizations that will create state and regional economic mobility hubs. Each hub will focus on different geographic areas to address issues, from social to economic to health and more, that impact women’s economic mobility.
“Each has a different focus area. Half of them have a statewide focus, and the other half have a smaller geographic focus,” Gorman said. “We were selected as one of the statewide hubs. We put together a proposal of how we would create an economic mobility hub. Our focus is on business owners as a vehicle for economic mobility – women business owners.”
Participating in the Regional Women’s Economic Mobility Hub program is a “natural progression” of where the Women’s Foundation of Arkansas has been heading, according to Gorman.
“For the last couple of years, we’ve been educating ourselves about how we were going to help women,” she said. “Where can we lean in to be effective?”
The Arkansas hub will grow out of the WFA’s Women Owned grant assistance fund. Launched in April 2020, the Women Owned fund provided grants of $5,000 to women-owned businesses from across the state, with a particular focus on Black and minority women business owners. The fund provided $80,000 in funding to 16 women business owners in Arkansas over the course of two grant cycles.
Originally, the fund was set to be released later, but the COVID-19 pandemic spurred its early release. Gorman said that the lessons learned during the application and grant process have laid the foundation for what Arkansas’ economic mobility hub will look like.
“In a short amount of time, we collected applications from almost a 1,000 women business owners from across the state of Arkansas. In doing that, we heard about what their particular needs were, and in our design, what we’re going to take into account are the particular needs of women,” she said.
Some of the challenges that women face in starting businesses have been relatively well-documented. The U.S. Chamber of Commerce listed a lack of capital is the biggest challenge for women, noting that only 2.2 percent of venture capital when to women-founded businesses in 2018. SCORE, a national network of business mentors, and Thrive Global also noted the difficulty in obtaining the essential financial assistance needed to start a venture.
But for Gorman, financial capital is only one side of the equation. Social capital and critical knowledge are two of the major obstacles facing women entrepreneurs. Many women entrepreneurs did not know how to set up their businesses to be eligible for state and federal funding, she said.
“We learned in our grant application process that several of our women business owners didn’t have social capital, so they didn’t have lawyers, accountants and bankers. Starting a business was something that they had done themselves,” Gorman said.
As part of the Arkansas Women’s Economic Mobility Hub, the WFA will be concentrating heavily on Black women entrepreneurs to “amplify the voices of our Black women business owners,” in Gorman’s words. According to a 2018 State of Women-Owned Businesses Report, the number of Black women-owned businesses increased by 164 percent from 2007 to 2018 compared to just 58 percent for women in general. However, Black women face greater structural obstacles in obtaining funding, facing gender and racial bias in many cases.
Before the COVID-19 pandemic struck, the WFA had performed a follow-up on a previous economic study. Gorman said the report highlighted the need to impact Black female entrepreneurs. “Women face a great challenge but Black women have an additional disadvantage. We are not going to improve efforts for women if we do not change the case for Black women in Arkansas,” she said.
Currently, the plan is to launch the Regional Women’s Economic Mobility Hubs in October 2020. In the meantime, the WFA and the other organizations will be undergoing a collective learning process to determine the best paths forward.
Gorman plans to use the time to learn from other foundations and see what has and has not worked for them. Ultimately, the foundation will use that knowledge to “adapt a model that works for Arkansas,” she said.