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Money News Briefs

Black Women Entrepreneurs in Canada Face Challenges Yet Show Resilience

Canadian study illustrates the obstacles Black women entrepreneurs face. It also highlights the reasons for optimism.

The largest study of Black women entrepreneurs in Canada reveals that they face significant barriers to financing including the cost of borrowing. It also reinforces previous research suggesting experiences of workplace bias and racism often pushed them to start their own businesses. However, the study shows why many Black women decided to pursue entrepreneurship despite the challenges. Many wanted to address unmet needs in the market for products and services, celebrate their culture and give back to their communities. 

Illustrating the experiences of Black women

Rise up: The Black Business and Professional Association (BBPA), Casa Foundation for International Development and De Sedulous Women Leaders released this study. Researchers from the Women Entrepreneurship Knowledge Hub (WEKH) also assisted. These three organizations contributed their analysis of available literature and data from a questionnaire of 700 Black women entrepreneurs. The report also shares lived experiences of these entrepreneurs.

Despite barriers, these women entrepreneurs continue to develop and grow successful businesses. Their businesses inspire others and offer flexibility. They allow women to provide for their family and ultimately provide personal fulfillment and a sense of achievement. Amid the pandemic, Black women entrepreneurs and business owners have used their business to bring a sense of hope and optimism to those in their community.

How COVID-19 has affected Black women

The report explores the impact that the COVID-19 pandemic has had on the businesses of Black women entrepreneurs. Previous BBPA research has shown that the pandemic has hit this demographic harder. These entrepreneurs were also less likely to have access to support. More than one third (34 percent) of Black women entrepreneurs reported the cancellation of their orders and/or events. Twenty-nine percent are experiencing decreases in sales. One in five (21 percent) indicated that their supply chain is impacted.

“Barriers to advancement for Black women entrepreneurs, like systemic discrimination and anti-Black racism, are not new, but the pandemic coupled with the challenge of childcare has put many businesses in jeopardy,” said Nadine Spencer, an entrepreneur and president of the BBPA and founder of BrandEQ, a marketing communications agency. “The importance of this report can’t be overstated. It provides us with an opportunity to better understand the issues that Black women entrepreneurs are facing and shows that we must increase our support of this population as we look at Canada’s economic recovery. It also shows the incredible resourcefulness, resilience and innovation of Black women entrepreneurs.”

How to help Black women entrepreneurs thrive

The report authors provide recommendations at the societal, organizational and individual level. Some include:

  • Promote policies that support Black women entrepreneurs, including access to childcare, income support, targeted investments, procurement, and micro grants.
  • There is a need to promote more positive role models and success stories of Black women entrepreneurs. Black women entrepreneurs need access to financing, skills development, help navigating available supports, and coaching tailored to their needs.
  • Implement anti-racism training and awareness for decision makers and allies at all levels of the ecosystem.
  • Ensure business definitions include a broad range of sectors, including self-employed entrepreneurs and SME owners.
  • Provide funding and networking opportunities for young Black women entrepreneurs in the early stages of business development. This will help strengthen their skills and knowledge at inception.
  • Within incubators and accelerators, increase the number of Black mentors, advisors and staff. Increase number of approaches tailored to the needs of Black women .

Key findings

Black women entrepreneur demographics:

  • 16.6 percent are from Quebec and 18.9% are Francophone
  • As in the general population, 60% were immigrants but only 10% were newcomers (in the country less than 5 years).   
  • Majority identified as African (44.7%) or Caribbean or Afro-Caribbean (44.3%) heritage.
  • Half (53.5%) have dependent children. 
  • Have higher levels of university education than the general population of Black women (62.7% versus 27.5% have a bachelor’s degree or higher).  
  • Businesses tended to be concentrated in services sectors, newer with 50 percent being established in 2020-2021 and are smaller with 93 percent of the businesses having revenues of less than $100,000. 
  • Three quarters were operating online (78.8 percent). Almost half (47.3 percent) indicated that they pivoted online in response to COVID..  
  • Most had no full time employees (74.8 percent) and 48.1 percent had incorporated their business. 

Reported barriers

  • (78.5 percent) agree or strongly agree that access to financing was an issue. This is followed by the cost of borrowing 74.7 percent agree or strongly agree and access to equity or capital with 69.9%.
  • More than one quarter don’t know where to get help for their business (27.8 percent).
  • The overwhelming majority of applicants used personal financing (81.4 percent). Twenty-two percent used government loans, grant or subsidies. Twenty-two percent used financing from business owners.
  • Only 17 percent used credit from financial institutions.

Inspiration and motivations

  • In spite of the evidence that many were “pushed” into entrepreneurship by experiences of anti-Black racism or sexism,  88 percent state that they found an opportunity to provide products or services. Sixty-one percent indicate that they found an unexpected opportunity. 
  • Increased flexibility in work was also a major motivation for starting a business. Seventy-three percent saying they agree or strongly agree. 
  • Many pointed to their interest in entrepreneurship from a young age, their intense passion for what they do, and a sense of fulfillment as a result of their entrepreneurial journey.
  • Others felt inspired to start a business so that they can address the race, gender and class inequalities they faced. They also wanted to meet the needs of their communities. 
  • Many were inspired to start a business so that they could celebrate Black/African/Caribbean culture. 

Helping Black women reach their potential

Dr. Mohamed Elmi, Director of Research,  Diversity Institute emphasizes the need for further support.  “We have been researching women’s entrepreneurship for more than a decade and the experiences of Black Canadians for nearly as long. Our research continues to highlight the challenges of anti-Black racism and barriers in the system. Black women entrepreneurs doubly disadvantaged also facing barriers as women. There are new supports that offer hope: the Government of Canada is investing in targeted support through its new Black Entrepreneurship Program, for example. We also need to address bias in the ecosystem. We  pour billions of dollars into our tech-oriented innovation ecosystem, which is justified because tech is potentially high growth. But businesses in other sectors – services, culture, food, retail – also create and sustain jobs, families and communities.”  

The report builds on building on previous collaborative research released in 2020 in the State of Women Entrepreneurs: A focus on Black Entrepreneurs and is part of a research collaboration between BBPA and Ryerson’s Diversity Institute which began more than a decade ago.

For the full report:

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