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New age

A recent survey found that millennial small business owners are more diverse and successful than boomers

While some executives say corporate America has a pipeline problem, Andrew Coombs doesn’t buy it.

During his eight years in the corporate world, the certified public accountant noticed the other black people in the industry weren’t in positions of power. He believes the pipeline problem—that too few people of color graduate with appropriate degrees to enter the corporate workforce—is a myth.

Andrew Coombs, CEO, Coombs CPA PC.

Andrew Coombs, CEO, Coombs CPA PC. – AARON HOUSTON

“There is enough of us, you just don’t want us there,” Coombs said. “Fair enough, this is your house, you make your own rules. But now all my friends, millennials, we’re going to make our own house. If we don’t feel like we’re welcome, we’re going to create something new.”

About one in five small business owners are, like Coombs, in the millennial age bracket, the most diverse cohort of small business owners to date. Millennials are 94 percent more racially diverse than their baby boomer counterparts, according to a recent survey by small business financing company Guidant Financial and online credit marketplace LendingClub Corp. While 33 percent of boomer business owners are people of color, 64 percent of millennial small business owners are.

They’re marginally more profitable, too. Eighty percent of millennial small businesses are profitable compared to 77 percent of boomer businesses.

Coombs saw starting his own accounting firm, Coombs CPA in Newark’s South Ward, as a way to forge his own path to success.

“What’s frustrating about working for someone else or in corporate America is you have other people making decisions on your life, and those decisions on your life could be wrong decisions. I don’t want anyone else to have that much power over my life,” Coombs said.

“Being a minority in corporate America, you have to deal with subconscious bias, and no one who looks like you is in power. Everyone who does is lower level and they don’t move up. I see that and think ‘that’s not my future, that’s not the life I want to live.’ Most of my friends have their own businesses, too, because of that. We’ve seen what our parents have gone through and said ‘that’s not gonna be us.’”

Maintaining the pace

The main issue he faces as an entrepreneur is having the right people in place to do work when he’s not around, an issue that resonated with 12 percent of survey respondents as their own biggest problem. Other top challenges for small business owners according to the survey were lack of capital (36 percent); marketing and advertising (16 percent); time management (13 percent); administrative work such as payroll (13 percent); and managing and providing benefits (7 percent).

For Petal Levy, founder of hair extension retailer Hair So Fab, marketing is her biggest challenge. Levy’s business has garnered celebrity clientele—rapper Cardi B wears her hair extensions, called bundles, regularly to events, and Kylie Jenner wore one to the Met Gala in May—but to keep her business moving at the pace she wants, she spends upward of 70 hours a week working on social media, reaching out to stylists, doing radio promotions, and even handing out flyers.

“You have to stay on it every day. You have to know what your followers want and local customers need. You have to put yourself out there,” Levy said.

Hair So Fab was born out of Levy’s own use of extensions and love of beauty. She noticed that as bundle prices at the beauty supply store were going up, quality was going down, and after much research, started Hair So Fab in 2011 at age 27. She sells only high-quality human hair. Other brands cut costs by mixing human hair with synthetic hair but, she said, “that’s bad for your brand.”

Hair So Fab grew from an online-only business to a small brick-and-mortar shop in Bloomfield. Now, she’s moved out of her original Bloomfield location to shops in Brooklyn, Orange, and Newark, where she said she’s the only black-owned business on Market Street.

She called the lack of diversity in beauty supply store ownership, which she said by and large is not owned by their primary clientele, black women, “sad.”

“That’s why I really stuck it out, and I’m there in the community and I’m not going anywhere because I want to show other young African American entrepreneurs that are coming up that they can do it,” she said.

An interest in giving back to her community has driven her to work harder still, and she gave away 200 bundles to local girls to wear for prom night, each valued between $200 and $450.

And while she wants to be a role model to aspiring black business owners, she said they need to know that business ownership isn’t as glamorous or easy as it might look to her 345,000 Instagram followers.

“I really want black business owners to really understand that it’s great to open in business but that you have to do a lot of research beforehand. I’ve seen people fail miserably. Social media will lie to you and tell you everyone’s successful. It’s heartbreaking.”

According to the Guidant Financial/LendingClub survey, millennial small business owners are 14 percent more likely to be challenged by a lack of capital than boomers. Levy’s business funds itself now, but when she started it in 2011, it was funded by a full-time babysitting job and wasn’t always profitable. She once had to throw out thousands of dollars of hair because the factory she was sourcing from wouldn’t buy back sub-par product, and she didn’t take a vacation for her first four years.

“These are the issues you go through and the risks that you take,” she said. “If you’re willing to do that, you can be successful.”

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Gabrielle Saulsbery
Albany, N.Y. native Gabrielle Saulsbery is a staff writer for NJBIZ and the newest thing in New Jersey. You can contact her at gsaulsbery@njbiz.com.

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