Hear how you can remove unfair obstacles to access to capital
In this terrific podcast (one of my favorites) originally broadcast in 2019, Jill Johnson and I discuss the challenges faced by women of color in starting a business, from finding the capital to underwrite growth to developing the business acumen to successfully take ideas and turn them into brilliant innovations. Getting a fledgling company off the ground is never easy, but the obstacles put in front of entrepreneurs of color, especially women, is not merely unjust but bad business. There are so many important perspectives to absorb from our conversation that I just had to share it with you again, because sadly, so many of these problems still persist today.
Lack of access to capital is a major stumbling block for women entrepreneurs, especially women of color
Women of color are starting businesses at higher rates than anyone else, yet they get less capital, have fewer successful exits and produce less income for themselves. While there have been some innovative capital solutions in recent years, capital constraint remains a defining problem for the majority of women of color entrepreneurs. Jill talks with me today about how she is attacking this problem by sharing her expertise for creating the connections that open doors to opportunity.
In our fascinating conversation, Jill and I talk about her family of entrepreneurs who started and ran a successful newspaper business in New Jersey. But, as we know so well, the newspaper business is not a flourishing growth industry, so Jill and her father turned their attention to developing resources for entrepreneurs, particularly women entrepreneurs, so that they, too, could be successful business leaders.
As a major step in this direction, Jill co-founded the Institute for Entrepreneurial Leadership in 2002, then launched the Adopt-a-Business Program along with a broader initiative called Women of Color Connecting whose convening summit in 2019 helped women of color build their networks, pitch their ideas and find the support they need to thrive.
In spite of obstacles, women are a major force in business
- As of 2018, there are 3 million women-owned businesses in the U.S., compared to only 402,000 in 1972.
- Women now own 4 out of every 10 businesses in the U.S.
- Since 2007, the number of women-owned businesses has increased by 58%. Overall, U.S. businesses have only increased by 12%.
- In 2018, 1,821 new women-owned businesses were launched every day, with 64% of those founded by women of color.
- Women are slightly more likely to start a business than men, according to the SCORE report.
Want to get involved? Here's a few ways to start:
- Podcast: Rohini Anand—Can Businesses Create Cultures Based On True Diversity, Equity and Inclusion?
- Podcast: Maureen Berkner Boyt—Yes, Diversity And Inclusion Can Happen But Only If You Work At It
- Podcast: Deborah Levine—How To Help Society Truly Become Inclusive?
Additional resources for you
- My two award-winning books: Rethink: Smashing The Myths of Women in Business
and On the Brink: A Fresh Lens to Take Your Business to New Heights
- Our website: Simon Associates Management Consultants
Read the transcript of our podcast here
Andi Simon: Welcome to On the Brink With Andi Simon. Hi, I'm Andi Simon. I'm your host and your guide. And as you know, our job is to help you go beyond being on the brink. After 340+ of these podcasts, we're getting enormous responses from across the world about how we are really helping people see, feel and think in new ways, which is what our job is. I'm a corporate anthropologist, and I love to bring the methodologies and tools of anthropology to business, and it's serving our clients really well. And it's serving us in this podcast really well to help you do the same.
I have with me today a wonderful woman. Jill Johnson is with us. Jill is doing something really right up our alley, it's all about entrepreneurship. She is particularly helping women entrepreneurs really get their ideas out of the starting gate. So a little bit about her history. She's a visionary leader, a small business champion, and an inclusion advocate. I’ll let her tell you more about how her journey got her there.
She's a co-founder and CEO of the Institute for Entrepreneurial Leadership. She has nearly 30 years of experience as a business strategist with an expertise in financial analysis, marketing and business development. She's a particularly strong advocate for community businesses and micro enterprises, and is a leading authority in the area of minority inclusion in the entrepreneurial ecosystem. She's a speaker on topics like community economic development, social entrepreneurship, business plan development, minorities and women, small business growth and access to capital.
So for today, I'm going to ask Jill to share with us more about her journey. I'm so delighted she's with us. And then we're going to get to some of the things the initiatives she has in the works for us right now that you should know more about and participate in. So Jill, thank you for coming today.
Jill Johnson: Thank you so much for having me. It's exciting to be here. It's so much fun to share. People ask me all the time, how did you get into this? You know, certainly not the thing you think of when you're in elementary school, and people ask you what you want to do when you grow up. But my parents had a business, they had a newspaper publishing business for about 20 years. It was successful by many accounts, meaning that that's how they provided a living, that is they employed other people, probably up to maybe 12 people or so at their peak, and they kind of hovered around a million dollars in revenue. So it was a good, solid business, a good living.
But when they decided that after 20 years of a weekly newspaper, which is a grind, getting that out every week, and I was there, that was the job that I had working in the business, always doing something. And remember, this was before the days of the internet, the way that we know it today. So there's a lot of manual work going on. When you look at the path for a lot of minority businesses especially, that is what happens. They have a successful business and then it comes to the end of the road for that founder. And they shut the business down. We hear that story over and over again.
The reason that this was disturbing to me is because I have seen the other world in which people live where they start businesses and sell them for a lot of money or they go public. I was in the Financial Analyst Program at Goldman Sachs and mergers and acquisitions immediately upon graduation from college. So I got my taste of that and oh, my gosh, this is completely different. But I really thought about the fact that the people who were doing that did not look like me at all. They were not women, they were not people of color. And I think that it's unfortunate that more women and people of color are not really putting their businesses on that type of trajectory. So that's kind of the motivation for the Institute for Entrepreneurial Leadership.
Andi Simon: Then tell us about that Institute. What kinds of stuff were you doing and some stories that you could share that bring it alive?
Jill Johnson: My father and I started the organization together. When they had the newspaper publishing business, they often would do workshops and different events, many which included some conversation around access to capital. That was always an issue. That was a challenge that even people who had been in business for many, many years were not able to get capital, independent of their personal financial situation or their personal assets.
That challenge is one that goes back to the founding of the United States. It is a challenge that, unfortunately, I don't believe will be solved anytime soon. It's not going to be eradicated anytime soon. And we'll talk about that in a minute. And kind of one of the solutions that we're putting forward, but really what we looked at was, there's the flip side of that. When you look at these businesses, often, despite not having the capital that they need, they still have to figure out how to keep on going, how to keep the business operating, and how to create enough runway for themselves so that things can either turn around or things can take off.
So really, a lot of the work that we have done over the years is about helping people to think differently, think creatively about how to give themselves more runway without having the capital that they feel that they need to do it. So it requires a lot of just creativity, resilience, and in some cases, being there with them, to just help them think differently.
Andi Simon: Now you do this with a wonderful board. And I was intrigued by all of them. I don't know if you can share some of their stories. But clearly, it's a diverse board with great backgrounds. And they all are coming with a purpose. It is a very purposeful board. And how did you assemble it? Tell us because as an entrepreneur, one of the things I have to do is often bring that advisory board or investment board together. Is there some magic that you have here, because whether it's Larry Balian or Robin Campbell, I'm just intrigued by their diversity and purpose.
Jill Johnson: So to talk about our board for a little bit, and it's interesting, so there probably should be a more organized process for thinking about who should be on the board. But unfortunately, for us, or I don't know, fortunately, maybe it just hasn't happened that way. The board has really come together, more so from people who I've met along the way who have become very interested in what we do, and who want to share and who understand and get why supporting entrepreneurs, especially those who are under-resourced, is charitable, in a way.
But I really actually don't like to think of it that way because it really is an economic imperative. It is one way that we can help to close the income inequality gap. It's one of the ways that we can help to address education issues. When people have money, when they're generating wealth, they have more options. More women are able to remove themselves from bad situations, and it was a reason why in school, I studied economics. While my life is not driven by money, I do believe that money and finances are what drive a lot of decisions that go on in the world.
So you know, when you look at Larry Bailin, Larry has a successful marketing company, Single Throw Marketing that he built from the ground up. Larry did not go to college. He actually grew up in Newark. So that was one of the connections was that he grew up in Newark, New Jersey. He did not go to college, was enterprising, very entrepreneurial. He had started one business and then exited that and then started this business with a partner. And he's grown it. And so Larry has that perspective, being someone who didn't have a tremendous base of resources, who understands and gets that.
It's not just about having a passion, but it's having a passion and then really putting a foundation behind that and growing from there. And it's very interesting. When you hear Larry talk today, he talks about some of the same challenges, despite the growth that he's had. He talked about some of the same challenges that our small business members who were at an earlier stage have. It's just at a different scale. So another one of our board members, Ed Young, was one of my college classmates. He was part of the early team at The Source magazine. It was the leading magazine for the hip hop and rap industry in the day. Very early days. He was able to help to grow that enterprise to a very sizable level and then exit. He's a person who really understands what it means to start a business, grow that business, create value, and then be able to extract that value. And the traits that both Larry and Ed exhibit are things that we want to help our entrepreneurs to really understand.
Andi Simon: The interesting part about it is that they take your passion and your purpose and they multiply it. And they bring their own experiences to bear so that it gives it a richness that's really very vital and vibrant. You are all pulling together here around women entrepreneurs; let me throw in a couple of data points for our listeners. 40% of the businesses in the US today are now owned and run by women, and they're not all succeeding when one a day fails. But since 2008, if women hadn't opened up these businesses, there would be no new business growth. And so there's something in there, right? 40% to 46% of the workforce are women. 35% of the women are now the sole breadwinners. And if you add whether they're the co-breadwinners, there's a dynamic change going on, where they are going to need a different kind of support and help than if they were an employee.
You are an employee of a big business. And now you're on your own and the dynamics are completely different. Then add on top of that: the major industries article came out yesterday to my email stuff off Google, that the major industries Procter and Gamble, the major shaving cream companies, are all under siege because there's no growth in their business. And so Harry's has grown 30%. But all the other razor and shaving cream companies haven't grown at all.
Casper is selling mattresses like crazy online. And the traditional mattress companies are trying to figure out what happened to the shopper. They'll give it to you for 90 days, you don't like it, they'll take it back. They make it simple and easy. There's a message in here. Even Johnson & Johnson is trying to figure out what to do about baby shampoo that's not selling. So they're taking the dye out of it. But that's not terribly innovative, but it is a reflection. I think it's called Bliss.
There's a new makeup that's tackling the red blondes and Lancome's of the world with an online, highly personalized experience for makeup that's going gangbusters that started with a blog that just went crazy. So there are some really interesting stories coming out about entrepreneurs, using the new technology, the internet, and new ways of engagement, which I think is a particularly powerful story that changes the whole dynamic.
Now I'll segue from there into how WooCommerce is changing the way we do business. There's a conference scheduled for January 31 to February 1 at the Newark Liberty International Airport Marriott. And this is sort of a crystallization of a lot of the things that we're talking about regarding how you launch and sustain your growth. Tell us about it. How did it happen? And what are you expecting to come from it? Because I'd love to have lots of people sign up.
Jill Johnson: Sure. So we launched and entered two ways to get involved. So we launched this initiative specifically to support women of color entrepreneurs. One of the things that we looked at earlier this year was that, you cited some statistics about the growth of women owned businesses. Women of color are starting businesses really at the fastest rates. Yet, when you look at the success, when you look at the level of revenue, and the number of employees, it's women of color who are still not by many measures succeeding.
So it's great to say that we're starting these businesses, but what can we do to help more of them stay in business and not only stay in business, but to grow? And how can we help those that are on the higher end, which is what our initiative is about? How can we help those that are on the higher end that are generating $100,000 or more to grow and to get to that million dollar point? And it's interesting when we talk about a million dollars, but a lot of people don't really realize that a very, very, very small percentage of businesses across the board are at a million dollars.
What we look at though is that we see those that could be on that trajectory but for lack of having the capital when they started or lack of having the access to growth capital, which again are challenges that are rooted in systemic issues that go way back. But for those, they could potentially be on that trajectory. So really those that we are trying to identify and seeking to join this community are those that feel like there's been some barriers and access to resources that is the thing that's really holding them back.
So we want to help them get connected, get access to those resources. So we encourage women of color entrepreneurs, and we don't have any eligibility around the type of industry or type of business or even geographic location. So women of color entrepreneurs, we would encourage them to apply. What we are doing is that we are selecting a cohort of up to 10 women who will share in a million dollars' worth of resources and expertise between them. And these are resources and expertise to help them take their business to the next level.
And we talk about on the low end, $100,000 in revenue, but there are some people who I'm expecting to apply who are over a million dollars in revenue. In fact, we're even over 5 million in revenue because we look at some of those who might be at 5 million when their counterparts are at 15, 20, 50 million. So those are our entrepreneurs that we can work with in a different way to help open doors to access.
Now, the other way to get involved is, there are a lot of people that talk about diversity and inclusion and yet, when you look at many of the programs that exist, even some of those that are for women, and to support women entrepreneurs specifically, unfortunately, they still don't look very diverse. When you look at race and ethnicity, you don't see very many people of color. And so what we're looking to do is to provide an opportunity, a platform for people who truly value diversity and inclusion, to participate, to support women of color entrepreneurs in a couple of different ways. So it might be people who are part of an angel network of women to attend the event to start to cultivate and develop relationships with other women, women of color, who may be interested in angel investing and who may have the means to do so.
Andi Simon: People that have expertise, legal or accounting, or marketing, or really all sorts of expertise, who would say, "I will volunteer five hours of time, I will volunteer 10 hours to help one of the women as part of the cohort, with whatever that particular thing is related to their expertise." Or maybe you have space in your office. We actually have one adopt-a-business sponsor that has some excess capacity in their office and they are contributing office space for a period of a year to people that are related to their industry.
So there are all different ways for people to support this initiative, just with their expertise and the resources that they have. But it's also an amazing way to meet people and to become engaged and interact with people who don't look like you but you know, where you share common interests and common goals, especially as it relates to diversity and inclusion.
Sponsor break: Now, a word from our sponsors. Simon Associates Management Consultants is us. And we love to help you see, feel and think in new ways to help you and your business grow. We specialize in applying the tools and methods of anthropology. But we're also entrepreneurs and business builders, and we like to share our experience and expertise with you. So if you're stalled or stuck or starting up, give us a buzz and let's see if we can help you as well. You can learn all about us at Simonassociates.net and read my book, On the Brink: A Fresh Lens to Take Your Business to New Heights. Learn about it at Andisimon.com. There's a free chapter you can download and a toolkit you'll find very helpful. We're on Amazon, and you can buy it as a book and ebook or even an audible that I recorded myself. We look forward to hearing from you at Simonassociates.net or info@Simonassociates.net. Now back to our podcast.
We have several early stage companies that have gotten out of the box and as you describe them, they've gotten enough income stream to resource and self-fund their own growth. Knowing how hard it is to get the seed money, although there's one woman who is looking for $100 million and that's not petty cash. And so there's lots of different kinds. We tend to get some clients, we have very large clients, we have some who are in the $10 million range who don't know how to scale up and want to get to the $25 or $30 million range.
The entrepreneur often has great skills for the startup, they have a great idea, they can build it, but they can't sustain its growth. And they get so encumbered that the CEO, the CMO, the CFO, the fixer in the packaging, the idea person, that they don't understand the need to bring in other skill sets, and how to begin to think about things differently. And we heard that at the launch of our Initiative, the Her Summit at Washington University on November 3rd, that brought in a lot of people, about a third of them were people of color. In St. Louis, many of them are doing fabulous things in social entrepreneurship, in the community itself, which is really a very rich area for growth.
But others have a desire...there was a doctor who really doesn't want to be a doctor anymore, and wants to get into some kind of an entrepreneurial adventure. So it's a really interesting time to begin. But the common theme is: "I got this far, I'm gonna have to go to the next step. And so I add that into my repertoire. Because even if I got the capital, can I use it? Can I convince somebody who's giving it to me that I have the skills to take it to the next level?"
So I volunteer a little time, if you've got someone who's ready to build the business. And, you know, one of the speakers on our panel was Maxine Clarke who built Build A Bear, and the idea came from her niece and nephew who were walking through a store and wanted to buy baby beanies. And the little girl said, "Well, we could make them." And they shared an aha moment. And she said, "I will tell you that every time I said, 'I want to have a Build A Bear store,' people would say, 'Really, you want to do what?'" You can only imagine the response that she got, I can only imagine. Well, it has 400 locations today and has outlived the debacle of retail. And parents, grandparents, kids, we all come in and they still Build A Bear and they love to build the bear.
Jill Johnson: We still have a Build a Bear sitting on a shelf in one of my kid's rooms.
Andi SImon: And so Maxine is very generous with how she helps other entrepreneurs, women entrepreneurs, but we were just laughing about how hard it is to take an idea and turn it into a success story. But you can do it.
Jill Johnson: Absolutely. And I think that that's one of the goals of this initiative, and especially of the adopt a business program. It is to essentially say, we realize that access to capital is a huge problem. But we have to move beyond that. If we just wait for that, we will be continuing to wait and our businesses will go nowhere.
We have so many people that have expertise and people who have built successful businesses, who just by sharing that expertise can help someone else to get to another level. And if we can help someone to get the expertise that they need, and to be efficient with their resources and to avoid some mistakes that would cost them money, that can often help them get to another level, that then even makes them more fundable and helps them to gain access to capital. So that's what this is really all about. You know, it's a lesson: let's not keep waiting, we need to just go ahead and do this and help some people to become successful.
Andi Simon: Now I want to add a thought: I'm working on a workshop for a client about human errors. And Bill Gates has a great quote that you must make errors or you will never learn. And if you think that you have all the answers, that's a mistake all by itself, the certainty that you hope is certain has to come with lots of trial and error and to make mistakes is actually a real asset.
Silicon Valley is looking for people who have tried and failed and tried again. And so if there's one thing I'd like to add, my little theme to your great approach, is that this is a time for learning. Trying small mistakes are better than big ones. But the learnings are so valuable, because nobody can teach you what not to do until you try something and it's not the right thing at the right time. But you need to have that openness and be an explorer.
And I often tell people, there are discoveries and deliveries, you need to know yourself. Those entrepreneurs are often discoverers and the ones who run the shop might be better as deliverers. And as we work with growth, the entrepreneur who discovered this now needs someone who can drive it through and make sure of all the processes and procedures and really get them some of the results that they're looking for.
So it's very exciting to listen to the hope that you're selling and sharing. And I think it's going to be a fabulous date in January to build it. As we wrap up our podcast, do you want to tell people how to get ahold of you and how to submit their applications for this wonderful event?
Jill Johnson: You can go on our website, it's Women of Color Connecting: WOCCON.org. There's a link to apply and then there's also one to support the movement. We really are thinking of this not just as an event, a summit, but a convening that is part of the overall initiative.
Our focus is the overall initiative because it's not one day, this is something that we're in for the long haul. It is a movement. And we are really encouraging people who care about this on many different levels, whether it's women entrepreneurship, women of color, entrepreneurship, minority inclusion, diversity, economic development, and creating jobs, we are encouraging you to get involved in some way with the adopter business initiatives.
So there is a tab to support the movement. And we ask people to just figure out which way works best, which opportunity works best for them to support this movement. Let's make things different. And let's be the help that these women of color entrepreneurs need.
Andi Simon: Yeah, I'm with you. One woman entrepreneur said to me, she had a great idea and people kept saying, "You're gonna do what? You can't do that." And then when she did it really well, they said, "Oh, that's so obvious." And she laughs about it because people would rather doubt you and give you the hurdles than help you hurdle over them. And I really do think that. What Jill Johnson is doing is helping them hurdle over those hurdles, and do it as a community that has a social movement with great purpose to it. How exciting.
Jill Johnson: Thank you so much.
Andi Simon: Well, thank you for joining me today. This has been such fun. We've had Jill Johnson here, you need to look at WOCCON.org and her website is weareifel.org, the Institute for Entrepreneurial Leadership.
Jill Johnson: That's the overall organization that my father and I started together in 2002. And we have been working with entrepreneurs to help them get access to the knowledge, networks and capital that they need, as well as creating programs or various agency partners. The Women of Color Connecting initiative is something that we launched as an initiative under the Institute for Entrepreneurial Leadership earlier this year.
Andi Simon: Don't wait, get a hold of Jill. And I think we can all celebrate as it moves forward. Sounds like it's going to be very exciting.
Jill Johnson: Well, we hope you'll join us.
Andi Simon: Yes. Now, for all of you who come to us, I can't thank you enough for all the joy you bring as you share your ideas with our podcast listeners. I think we're now ranked in the top 5% of podcasts worldwide. And it is so exciting to watch you share with others who then come back and say, "Can you do so-and-so? We want to have so-and-so on your podcast," and it's very cool stuff.
So today, Jill has been a great person to share with. We both share this great commitment to entrepreneurship and women, particularly, so join us for our next one. Remember, send us your ideas at info@Andisimon.com. Don't forget to check out my two books: On the Brink: A Fresh Lens to Take Your Business to New Heights and Rethink: Smashing The Myths of Women in Business. They're on Amazon. Hey, have a great day. Bye bye now.