Across all industries, it’s not news that people of color face many challenges in growing and scaling a business that their non-diverse counterparts don’t face.
But what are those challenges and how can founders overcome them?
Looking back over her 14-year journey of building Egami Group, the integrated communications firm, Teneshia Jackson Warner, the company’s founder and chief executive officer, said she would break down these challenges as four key barriers: curriculum, coaching, connections and capital.
In many ways, Warner said, these barriers are related and build upon one another. For example, curriculum, or the understanding of how to run a successful business and business KPIs, was one barrier in her own journey that stemmed from not having family members to look at as examples or to provide necessary connections. And looking at both coaching and connections, she cited the sizable advantage of “having a network of like-minded individuals” that had walked the path she was starting to walk.
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Bringing evidence to the notion, Warner said data has shown 70 percent of businesses whose leaders are mentored survive longer than those that are not by five years.
“Having the right connections to open the right doors at the right time, whether it be new business opportunities or opportunities to capital, which leads to the last barrier, being capital, that is extremely important,” Warner said. “To put this in context for you, it’s been documented that founders of color are at an inherent disadvantage when it comes to raising capital. Black and Latino founders accounted for 4 percent of all venture capital dollars and only 2.3 percent of venture capital dollars raised in 2019. If you go to 2020, only 2.4 percent of all of the total U.S. capital dollars raised are for Black and Latino businesses. The access to capital was also a big barrier.”
When beginning Egami Group’s business relationship with P&G, Warner admitted the payment terms she had agreed to were putting a strain on her small business and said she learned quickly about the need to be honest about the company’s challenges. In doing so, Warner was able to further the business through tools that P&G Responsible Beauty had in place, including tools set up with JPMorgan Chase for capital and meeting with P&G’s supplier and diversity network.
From her perspective, Anitra Marsh, vice president of brand communications and responsible beauty at P&G Beauty, Warner’s story underscores the challenges many companies owned by people of color and women face as a result of systemic disadvantages.
“As a big company, and P&G is a huge company, we’re looking at scale, we’re looking at efficiency, but often we don’t think about the impact that can have on a small business, many of which are owned by people of color and women,” Marsh said. “With Teneshia and Egami, this is an agency that delivered on everything we threw at them. We didn’t truly appreciate how [our asks] on short timing would impact cash flow. And importantly, I don’t think we fully appreciated how difficult it would be for her to vocalize those challenges because of wanting to serve [a] big clients’ bottom line. I think the big lesson here is relationships are key.”
That, Warner said, is the difference between performative allyship and the kind really backed by action to improve access and opportunities for business owners of color.
The effort is one P&G is continuing to undertake with various initiatives.
P&G Responsible Beauty is working in partnership with Fairchild Media Group to offer a Fairchild Founders Fund, which would provide both a capital and mentoring opportunity for start-ups making a difference in diversity, equity and inclusion. The business selected as the winning entrant will earn business consultation and mentorship from P&G Beauty executives, editorial recognition from WWD and a stipend to support the business. The deadline to apply is March 31.