White professionals (79%) are more likely than professionals of color (53%) to aspire to start a business in the future.
Opening a small business as an entrepreneur of color in America comes with its own set of unique challenges. Whether it’s securing funding to get the business off the ground or accessing the opportunities and mentorship needed to succeed, the playing field is far from level.
Our study revealed that workers of Asian, Black and Latinx–a gender neutral term for Latino or Latina–heritage found the deck stacked against them in different ways than their white peers.
To determine the unique roadblocks faced by entrepreneurs of color and other, gender-related minorities, we surveyed 1,000 professionals to explore business aspirations by race and gender.
Read on to discover our findings and how they may affect entrepreneurial growth in America.
- Securing funding ranked as the biggest challenge for professionals of color wanting to become business owners.
- More than half of American professionals of color would rather have job security than start their own business.
- Amid the Great Resignation, white professionals (74%) were more likely than professionals of color (31%) to have started a better job within the past six months.
Professionals of color see industry potential differently
The desire to start a business in the future was not equally shared across professionals of different races, ethnicities, and genders in America. White professionals were more likely than those of any other race or ethnicity to harbor hopes of striking out on their own in the business world.
While 70% of Black professionals aspired to start a business in the future, Asian professionals were least likely to share this desire (34%).
Differences in aspiration levels were also industry related. Generally, professionals saw a lot of entrepreneurial opportunities in IT and fintech, industries that are growing rapidly and expecting even more growth in the future. Overall, the prospect of starting an IT company was most popular, with 26% of professionals surveyed aspiring to a business in this space.
There were, however, key differences in industry preferences when filtering responses by race.
The fintech industry, which was much more popular among white professionals than among professionals of color, faces serious inequality challenges, with Black and Latinx professionals widely underrepresented. For all respondents of color, this industry ranked as the least desirable of the top three future business sectors. While the retail space was the least popular industry for entrepreneurs overall, it was the most popular among Asian professionals by a significant margin.
Interestingly enough, most aspiring business owners of color wanted their racial identity evident in their ownership of the company, which can also come with access to certain opportunities the U.S. Small Business Administration (SBA) provides specifically for minority-owned businesses.
Pushing through obstacles
Starting a business requires capital, and access to startup funding has historically been unequal for different ethnicities and racial groups. Roadblocks like these stop a potential business before it can ever get off the ground.
We asked our aspiring business owners to weigh in on the roadblocks they see in their pursuit of entrepreneurship.
Overall, the loan application process (35%) and securing sufficient funding (33%) were the two biggest roadblocks for aspiring business owners. However, answers varied by gender and race.
The biggest roadblock overall, loan applications, was typically felt more keenly by women than men. Black women were the only exception, finding this challenge less intimidating than their male counterparts. However, several studies have shown that Black entrepreneurs in general face more scrutiny and hardship when it comes to getting bank loans for their businesses.
Job security over entrepreneurship
Even amid the Great Resignation, many professionals desired job security over the more unpredictable path of owning their own business. We asked professionals without entrepreneurial aspirations to weigh in on the factors that kept them from setting out on their own.
Job security was the reason more than half of professionals of color chose not to start a business.
However, just because they appreciated the security of their current position, it didn’t necessarily mean they were happy at their job. Black professionals reported far lower rates of happiness at work compared to other minority groups, and especially white workers.
Historically, Black professionals have been denied the same access to high wages and advancement at work enjoyed by white professionals.
White women were almost twice as likely to report job happiness as a reason for not starting a business compared to Black women, while white men were almost three times as likely as Black men to report the same. Nevertheless, the unhappiness caused by these inequalities wasn’t enough to push Black respondents to leave the security of their position to start a business.
Inequalities in work-life balance
Many of the professionals who quit their job during the Great Resignation reported lack of opportunity, pay, and respect as major factors for leaving.
However, the differences in the experience respondents had at work abounded when viewed through the intersectional lenses of race and gender.
White workers were more likely to report high levels of work-life balance, job satisfaction, and earning ability compared to professionals of color (although percentages were equal for white and Hispanic women in the work-life balance category). Asian women were the least likely to do so across all three categories.
Underrepresentation of women and people of color in leadership roles possibly affected the relationships professionals had with their supervisors, in turn negatively affecting their experience at work. Often, minorities in leadership roles at large companies—and especially women of color—find themselves one of few, if not the only, person of their race or ethnicity in a similar position.
Minority respondents were more likely to report a good relationship with supervisors of color than those who were white. Nevertheless, the Bureau of Labor Statistics estimates that more than 75% of people in American management roles are white.
Do I have the same chances to succeed?
A level playing field is crucial to ensuring equal opportunity at work, yet our study found that the field was far from level in most workplaces. Black men were the most likely to report that their race had a negative impact on opportunities at work.
Opportunities to advance within a company are the stepping stones of growth in a career. And yet, 56% of the professionals of color we surveyed believed their race negatively impacted their ability to move up the ranks at work. Over half of Asian and Hispanic women felt their race negatively impacted their ability to voice their ideas.
This discrepancy became even more clear when breaking results down by individual racial identities. White professionals were almost twice as likely as Black professionals to receive a higher-paying opportunity in the past six months, and nearly if not three times as likely compared to Latinx and Asian professionals.
Percentage who had started a new job with a higher salary within the past six months, by race/ethnicity:
- White: 74%
- Black: 40%
- Latinx: 27%
- Asian: 24%
Percentage planning to leave their current position within six months, by race/ethnicity:
- White: 47%
- Black: 31%
- Latinx: 27%
- Asian: 31%
Supporting a diverse business ecosystem
Although the desire to start a business is very much at the heart of the American spirit, inequalities connected to resource access and opportunities were significant barriers for many of the professionals of color we surveyed.
As the small-business ecosystem continues to thrive, it’s important to increase the number of opportunities specifically for minority-owned businesses and entrepreneurs from underserved communities.
Inc and Go is on a mission to help aspiring business owners of all races and genders realize their business goals by providing expert resources and guides designed to tackle the complexities of starting a business.
From getting started on the formation of your LLC to reviews of the best services, Inc and Go can help you access the information and expertise you need to make your business dreams a reality. Visit Inc and Go today to learn more.
We surveyed 1,000 employed people. Among them, 55% were white, 15% were Black, 17% were Latinx, 12% were Asian, and 1% preferred not to answer. Fifty-one percent were men, and 49% were women. We weighted our data using race/ethnicity and gender statistics from the United States Census Bureau.
For short, open-ended questions, outliers were removed.
To help ensure that all respondents took our survey seriously, they were required to identify and correctly answer an attention-check question. Survey data has certain limitations related to self-reporting.
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