4 Insights About LGBTQ+ Entrepreneurs in 2022Impact Reports•Jun 29, 2022• 3 min read
This June, Hello Alice celebrates Pride Month by examining the challenges and triumphs faced by a growing segment of the small business community: LGBTQ+ entrepreneurs.
Hello Alice reviewed anonymous data from more than 44,600 small business owners who identify as part of the LGBTQ+ community and compared this information to responses from our overall community of more than 800,000 entrepreneurs. Published in partnership with the National LGBT Chamber of Commerce (NGLCC), StartOut, and Mastercard, this research also compiles testimonials from LGBTQ+ owners from the Hello Alice small business community.
In this report, we elaborate on four key insights and deliver actionable insights for enterprise business services, ecosystem partners, and individual small business owners in pursuit of business for all.
1. Capital Access Remains LGBTQ+ Owners’ Greatest Challenge
The single biggest challenge for LGBTQ+ owners is access to capital. In fact, funding came in as the top challenge for the third year in a row.
As a result, LGBTQ+ owners are less optimistic than their peers:
- 82% of LGBTQ+ owners said access to capital is limiting their ability to manage day-to-day operations
- 93% said it’s limiting their growth potential
Both figures are above-average rates compared to the overall small business population.
Mirroring a heightened need for capital, LGBTQ+ owners reported higher-than-average interest in financing:
- 56% of LGBTQ+ owners reported that they applied for financing in the last 12 months
- 72% of LGBTQ+ owners plan to apply for financing in 2022
Even so, the majority of LGBTQ+ owners are unsure where or how to secure necessary business capital. In fact, lenders can still legally discriminate against LGBTQ+ entrepreneurs in more than half of U.S. states — a potential barrier for many LGBTQ+ business owners.
2. Inflation and Hiring Are Limiting Growth
Small business concerns around inflation and labor are only accelerating:
- 78% of LGBTQ+ owners said inflation impacts are worse than six months ago
- 64% of LGBTQ+ owners said the labor market has grown tighter in the last six months
3. LGBTQ+ Owners Focus on Marketing
According to our surveys, LGBTQ+ owners devote outsized budget and attention to marketing, particularly digital marketing via social media platforms such as Facebook, Instagram, YouTube, TikTok, and Snapchat. In fact, 73% of LGBTQ+ owners reported using more than one social platform to market their business compared to only 57% of other small businesses.
That said, LGBTQ+ owners have limited resources to devote to paid advertising. Developing strategies that maximize organic marketing reach is more essential than ever to help bring in business.
4. Community Is Both a Strength and Challenge
Finally, LGBTQ+ business owners are more likely to integrate community impact as a core part of their business. Examples of community impact include:
- a focus on sustainable solutions
- creating jobs for underserved communities
- supporting local suppliers
However, isolation and lack of support are growing problems. More than 7% of owners cited the lack of a support network as their top challenge in 2022 — triple the rate measured during 2020.
Where LGBTQ+ Business Owners Can Find Support
More than anything else, LGBTQ+ owners need funding to fuel their businesses. To all LGBTQ+ small business owners in need, we recommend the following actions for immediate relief:
Search for grants, loans, and other financing options and get the capital you need to grow your businesses. The Hello Alice Small Business Funding Center offers personalized recommendations and one easy application.
Hello Alice Milestones break down essential business topics like fundraising, marketing, and branding into step-by-step guides to help you level up your operations.
The NGLCC is the exclusive, third-party certification body that verifies that eligible businesses are majority-owned by LGBTQ+ individuals. Increase your visibility to consumers and help support the NGLCC’s political advocacy on the behalf of the LGBTQ+ business community.
StartOut is a U.S.-based nonprofit organization founded in 2009 that focuses on supporting LGBTQ+ entrepreneurs and startup founders. They provide direct individual support through community events, one-on-one mentorship, one-on-one office hours with experts, a 6-month accelerator program, and investor connections.
More Resources & Context
About Hello Alice
Hello Alice is a free, multichannel platform that helps businesses launch and grow. With a community of more than 800,000 business owners in all 50 states, Hello Alice is building the largest network of owners in the country. Further, Hello Alice tracks data and trends to increase the success rate for entrepreneurs.
Our partners include enterprise business services, government agencies, and institutions looking to serve small and medium business owners to ensure increased revenues and promote scale.
A Latina- owned company founded by Carolyn Rodz and Elizabeth Gore, we believe in business for all by providing access to all owners, including women, people of color, military-connected individuals, the LGBTQ+ community, persons with disabilities, and every American with an entrepreneurial spirit.