One of the reasons I'm so passionate about entrepreneurship is that it allows anyone to chart their own destiny. If you have a good idea and the willingness to pursue it, you're on your way to supporting yourself and adding value to our economy.

Which is why, as my company gathered stories from LGBTQ+ entrepreneurs for Pride Month, I was happy to hear that the spirit of self-determination is alive and well. 

"Ever since I was a child, I've always wanted to be my own boss," says RJ Silver, owner of Sad Boy Designs. "The only thing that ever struck my interest was art, and I wanted to find the best way to display my talents. Today, I'm a graphic designer, and I create multiple things ranging from small keychains to large car decals."

We need more, not less, of stories like this. That's one reason Hello Alice regularly surveys the more than 800,000 small business owners on our platform to understand their quantitative and qualitative experiences and advance targeted solutions. Our latest impact report, published in partnership with the National LGBT Chamber of Commerce (NGLCC), StartOut, and Mastercard, analyzes the responses of more than 44,600 LGBTQ+ owners on Hello Alice, including Silver, to help us understand the unique needs of this community.  

According to our research, here are four insights about LGBTQ+ small business owners in 2022.

LGBTQ+ Owners Face Unique Barriers to Capital

Consistent with all groups of entrepreneurs, LGBTQ+ small business owners rank access to capital as their biggest challenge. The bad news is that LGBTQ+ owners cite this challenge at significantly higher rates, plus they are considerably less confident that their business can handle the ups and downs of our economic moment. In total, 82 percent of LGBTQ+ owners say access to capital limits their ability to manage day-to-day operations, and 93 percent say it limits their growth potential.

It's not that LGBTQ+ owners aren't trying to get the funding they need -- in fact, more than half of them tell us they've applied for some kind of financing in the last year. The trouble is that nearly two-thirds of LGBTQ+ owners tell us they're unsure how they can raise capital; they're also more likely to fundraise from friends and family, which suggests they've been shut out of loans and credit.

"Even though I have a borderline good/fair credit rating, most financial institutions charge extremely high APR. These types of loans hurt small businesses like me," explains Scott Beardslee, owner of Eximeno Road Films, a full-service media production company based in Los Angeles.

Another under-discussed fact is that lenders can legally discriminate against LGBTQ+ entrepreneurs in more than half of U.S. states. I join my colleagues at the NGLCC in urging lawmakers to work together to tear down structural barriers keeping LGBTQ+ owners from accessing the capital they need to grow their businesses and enrich their communities.

Inflation and Labor Needs Are Limiting Growth Potential

In case you've been living under a rock, inflation is a big deal right now. Add in the current labor market, and small business owners face an uphill battle. LGBTQ+ owners tell us both issues are only accelerating.

According to our survey results, 87 percent stated inflation has impacted their small businesses, and 78 percent said inflation impacts are worse than six months ago. For labor, 47 percent are having trouble finding qualified workers for their business, and 67 percent of those having trouble finding workers said the labor market has grown tighter in the last six months.

Interestingly, the impacts are uneven across industries. Among LGBTQ+ owners, the food and beverage industry report trouble with inflation and hiring at the highest rates.

"Our greatest challenge to date has been finding consistent and reliable staff to operate day-to-day activities," says Alexis Carbajal, co-founder of Phoenix Coqui Restaurant. "We have lots of potential to grow but keep getting pulled into working in the business. It has become more expensive and more difficult to find good workers."

LGBTQ+ Owners Are All-in on Digital Marketing

For years, LGBTQ+ individuals have turned to the internet to seek community, support, and friendship, and the same is true for LGBTQ+ entrepreneurs. Our survey finds that this group of owners spends outsized attention and budget on digital marketing platforms such as Facebook, Instagram, TikTok, YouTube, and Snapchat. In total, ​​73 percent of LGBTQ+ owners reported using more than one social platform to market their business, compared to only 57 percent of other small businesses.

That said, the survey finds that both LGBTQ+ and non-LGBTQ+ owners have limited marketing dollars to spend.

"I started my business with my own money, and sometimes that can be challenging when you have a home, a car, bills, and other responsibilities," says Christian Thomasson, owner of CT Flipz, an online resale shop. "Marketing takes capital, but there is no guarantee that the results that you are looking for will come."

LGBTQ+ Entrepreneurs Support Their Community -- and Need Additional Support

Thankfully, we see owners integrating the spirit of Pride Month into the core of their business plans, providing goods and services that directly support the needs of the LGBTQ+ community. Our data finds that LGBTQ+ owners are significantly more likely to integrate community impact in their businesses than the overall population. Seventy-four percent of LGBTQ+ owners make a point to support local suppliers and vendors, and 52 percent explicitly create jobs for underserved communities. 

In many cases, this community mindset is also good for the bottom line. Jamie DiGrazia, the founder of Chicago's Logan Parlor, opened her inclusive salon in 2014 and immediately found a loyal customer base that landed her on local best-of lists.

"I wanted to create an environment where I could work with like-minded professionals and collaborate to serve the LGBTQ+ community through the art hair services," she says. "We believe in a gender-free pricing structure where services are charged based on timing, hair length, and stylist level."

However, not everyone has the necessary support network to thrive. The number of LGBTQ+ owners who rank lack of support as their top challenge has tripled since 2020. We must proactively support these local businesses and amplify the reach of local chambers of commerce that can provide a lifeline to struggling entrepreneurs. After all, the support of your community can carry us through any struggle and remind us that, in all likelihood, we're doing just fine. 

"If you're doing well enough to pay bills, pay your employees, and do some good for the world, take that as a sign that things are going okay," says Matthew Ortega, owner of Alameda-based Modern Mouse Maker Market. "We'll all get through this together." Amen to that!