3 Keys to Earning and Increasing Capital as a Black Woman in Business

UPDATED: June 7, 2023
PUBLISHED: March 28, 2022
3 Keys to Earning and Increasing Capital as a Black Woman in Business

Earning and increasing capital as a Black woman in business shouldn’t be burdensome. Recent research has shown that Black women entrepreneurs are among the most successful business owners, earning between 25-50% more than their white counterparts. Although Black women entrepreneurs are increasing at unprecedented rates, they also face unique challenges that may prevent them from achieving or maintaining greater levels of success. That includes earning and increasing capital to get their businesses off the ground.

One of the best ways to get funding for your business is to develop relationships with people willing to give you money before you need it so you can reach out to them later when your business needs funds. The best way to do this is to develop strong relationships with investors who can provide the capital you need in the future when you’re ready to grow your business further. Here are three keys to help you earn and increase capital as a Black woman in business today.

Never leave money on the table.

Negotiating is essential for anyone starting or operating a business. Start with one fundamental rule: If it doesn’t cost you anything, there’s nothing to lose by asking for more. Always ask for more than what you expect—and if they say no, well, at least you tried. 

The reality is that not everyone will want to pay what your product or service is worth; however, walking away without trying could mean walking away from revenue, not to mention pride. Many women who start businesses are often told they don’t ask for enough; even worse, they let someone else take advantage of them because they’re afraid of being perceived as pushy or too aggressive. 

Use these words during every negotiation session: “I appreciate all of your feedback.” When you tell people they’ve helped shape your decisions, they’ll see you in a new light. Not only do their opinions matter, but they’ve positively affected how your business operates overall. Build relationships with them instead of closing deals only to disappear into thin air. Once you have their respect and trust, negotiations become much easier because people are willing to go above and beyond for those they care about.

Learn to say no (and mean it).

We all know that it’s essential to say yes when it counts. But when you’re trying to grow your business, it’s just as important to learn how to say no. After all, you can only do so much—and there are still only 24 hours in a day. To manage your time better, start by identifying how much time each task is worth. Then, reevaluate: If something isn’t adding enough value (or cost) for its role in your company and won’t help you reach future goals, cut or outsource it altogether. 

This frees up some extra time for growth initiatives like reaching out to prospective clients or brainstorming with team members on new products. Time is your most valuable asset, so don’t waste it. Instead of saying yes to everything, look for ways to streamline processes and set boundaries around what truly matters for growth.

Step outside of yourself and find inspiration. As Black women entrepreneurs, we often look to our predecessors—who were few and far between—to see if they made any mistakes along their journey that could lead us down another path. Although hindsight is 20/20, constantly comparing yourself to others can drain you of motivation. Instead of dwelling on what has been done wrong before, turn those comparisons into opportunities for self-reflection. Rather than worry about what other successful Black women have achieved, think about what you want to achieve instead.

Set financial boundaries.

One of my favorite pieces of advice to fellow Black women entrepreneurs is also one of my first bits of advice: Set financial boundaries early. It’s vital for you—and your business—to know how much money you’re comfortable spending. 

To start, take your annual gross income (or total revenue) and divide it by 12 months. This gives you an average monthly amount that represents what you’ll be making each month throughout the year. The next step is determining exactly how much you can spend. Ideally, you want to spend about 50% of your income on operating expenses, including staff wages and any other costs associated with running your company, such as travel expenses or office space. What’s left over becomes profit for you—after taxes and savings are taken out, that amount will represent how much capital reserve you have if something goes wrong with sales during any given month. I recommend capping at 50 percent so profits don’t dip below cash reserves and you leave room for growth down the line.

Set a goal and go after it. Being a Black woman in business is tough—don’t make it more challenging by flying by the seat of your pants. Make a plan and follow it. Remember that no is a complete sentence. Set financial boundaries so you can gain and increase your wealth and the wealth of your organization. 

Photo by @riarouse.photography/Twenty20