No One Does It Alone: The Importance of Peer Support for Entrepreneurs
If you're a business owner or aspiring entrepreneur, odds are you've already heard plenty of lectures on the importance of networking. Networking helps you to build business relationships, gives you a competitive edge, and provides access to opportunities you wouldn't have otherwise—(yawn)—you've heard it all before.
And yet, if you're not careful, networking is one of those things that can easily get pushed to the back burner. While networking is important, it's often a lot less urgent than many of the other day-to-day tasks of being a business owner. The result? If you're exhausted and just quitting work after a sixteen-hour day, putting time and energy into networking probably isn't your priority.
Although networking might seem like the kind of thing that you can afford to put off until your business is more stable, or until you have more time, that might not be the case. This is especially important for entrepreneurs of color or minority business owners, who also happen to be the most disadvantaged when it comes to networking opportunities. Here's why networking is particularly crucial for marginalized communities—and what you can do about it.
Barriers to Success
In spite of recent efforts at increasing social justice, entrepreneurs of color and minority business owners continue to experience significant obstacles in the business world. Among the barriers faced by these groups are lack of access to financing, inadequate cash flow and/or sales, and a more difficult time accessing resources such as financial guidance and business planning support.
There are a lot of contributing elements that go into this dynamic, some of which stem from centuries of discrimination. Factors entirely out of an individual's control, such as their family's socioeconomic status, can also have an impact on whether or not their business succeeds. For example, it's not unusual for first-time entrepreneurs to receive help in the form of startup money from their families. But for entrepreneurs of color, whose families are also socioeconomically disadvantaged as a result of systemic racism, that same source of support might not be available to them.
Further, minority-owned businesses that make it off the ground face a grim prognosis: 8 out of 10 Black-owned businesses fail within the first 18 months of being opened. Often, this is due to the inability of these businesses to scale up—again, due to lack of funding. According to the 2021 Small Business Credit Survey, Asian-, Hispanic-, and Black-owned businesses were significantly less likely to be approved for financing than their white-owned counterparts. This was true even for those with good credit scores.
To Grow Your Business, Find Your Tribe
Often, having a good network or business mentor can help minority entrepreneurs overcome barriers they face. A good support system can be invaluable in a number of ways, including:
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Access. Mentors who are themselves established business owners can be an amazing connection to crucial resources and relationships for entrepreneurs.
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Advice. By surrounding yourself with people who have braved the trials of business ownership, you're putting yourself in a position to learn from their mistakes. What might have taken you months (or years) and a bunch of money to figure out on your own can potentially be gained from a half-hour conversation over a cup of coffee.
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Perspective. Have you ever spent days puzzling over a specific problem or situation, only to have someone else solve it for you in the space of minutes? Sometimes, you need an outside perspective to help you see things clearly. For those moments, having a network or business mentor to consult when you're feeling stuck can make a huge difference.
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Inspiration. Experts have noted that the popular image of an entrepreneur, as represented by the media, is usually a straight, white, cisgender man. From a psychological standpoint, that can be devastating for prospective and current entrepreneurs of color, who may be less likely to pursue their passions because they don't identify as an entrepreneur.
When it comes to networking, entrepreneurs of color and minority business owners often find themselves at a disadvantage. People of color are more likely to lack access to and/or underutilize professional networks. In particular, Black women tend to be the hardest hit by these sorts of inequities. If you think that you might benefit from having a business mentor, Sky's the Limit can help.
Sky's the Limit is a nonprofit organization that is committed to helping members of underrepresented communities succeed. We provide invaluable resources for entrepreneurs, including Economic Capital in the form of business funding and Social Capital via one-on-one mentors who can steer entrepreneurs through the difficulties of starting a business. If you are an entrepreneur looking for capital or other resources, sign-up today to join the Sky’s the Limit community!
