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How Former Entrepreneurs of Color are Feeling About It
If we had an understanding regarding the experiences of former business owners, we can uncover insights into the challenges, systemic barriers and conditions that precipitated their exit.
a Prosperity Now feature | Annette Jacoby
In the realm of entrepreneurship research, the focus often gravitates towards the journey of current business owners. While data sources like the Annual Business Survey (ABS) by the Census offer valuable insights into active ventures, there is a lack of understanding regarding the experiences of former business owners. Comparing the narratives of non-Hispanic White, non-Hispanic Black and Hispanic former entrepreneurs, who for various reasons have concluded their business journey, can uncover insights into the challenges, systemic barriers and conditions that precipitated their exit, and can ultimately help address persistent low levels of business ownership in Black and Brown communities.
Main Findings …
Compared to former White business owners, former entrepreneurs of color are not only less likely to achieve profits but also far more likely to experience losses.
Reasons for business closure for former entrepreneurs vary starkly by race and ethnicity.
Hispanic former entrepreneurs more frequently cited financial challenges as reasons for business closure.
Black former entrepreneurs more frequently cited business operations challenges as reasons for business closure.
A critical gap in community and professional support led to business closures among former minority entrepreneurs.
Overall, 15 percent of all American adults are former entrepreneurs, which means they closed, sold or left one or more businesses at some point in their life, and do not currently own a business. The percentages of White, Black and Hispanic adults who have previously owned businesses are quite close, with 17 percent of White adults, 13 percent of Black adults and 11 percent of Hispanic adults being former entrepreneurs.