Great News: Women Owned Businesses Growing, Thriving, Employing More
The 11.3 million women-owned firms in this country are performing five times better than the national average of businesses, employing close to 9 million people and generating over $1.6 trillion in revenues, according to the latest American Express OPEN report.
Just to repeat for the record, that was trillion with a “t.”
The greatest growth in these companies owned by women is shown by companies owned by women of color.
In all women-owned businesses, “Comparative employment growth is even stronger. Employment in women-owned businesses has increased by 18 percent since the recession, while among all businesses employment has declined 1 percent since 2007,” the report showed.
While not at parity, women own 38 percent of small businesses in this country and revenues are increasing at a more brisk pace. “Business revenues among women-owned firms have increased by 35 percent since 2007, compared to 27 percent among all U.S. firms – thus at a rate that is 30 percent higher than the national average.”
While overall employment growth across sectors has been stalled, “employment in women-owned firms, which – according to this report – is up 18 percent since 2007 compared to a percent decline among all U.S. firms,” the report shows. Firms owned by women with 50 to 99 employees, have seen a 27 percent increase in employment since 2007.
Every day since 2007, women have started an average of 1,072 new companies each day. “Between 2007 and 2016, there was an increase of 3.5 million women-owned firms. The majority of those companies, or 78 percent, “are firms owned by women of color – an average of 842 net new minority women-owned firms were launched each day over the past nine years,” according to the report.
“African American women are motivated to start their own businesses for a variety of reasons, including following their passions; having more freedom and flexibility; creating generational wealth and a legacy for their children; and giving back to their respective communities,” writes Carolyn Brown in Black Enterprise.
According to Brown, “Black women play—and have played—a vital role in the entrepreneurial landscape with the U.S,” said Natalie M. Cofield, founder and CEO of Walker’s Legacy, in a released statement after the release from the National Women’s Business Council’s new report, Black Women Entrepreneurs: Past and Present Conditions of Black Women’s Business Ownership.
“Participants indicated risk and fear as key barriers to accessing financial capital,” Brown writes. “Black women business owners describe the process of accessing funds for their businesses as lengthy and exacerbated by a lack of information. In addition, many indicated that racism and discrimination were contributing forces to the lack of access to financial capital. Participants also described the challenges of ‘not having a seat at the table’ or at the ‘right tables,’ as well as not having the social and human capital that would make them privy to key resources.”
In 2002, there were fewer than 1 million firms owned by African American women in this country. According to American Express, “As of 2016, there are an estimated 1.9 million African American women-owned firms, employing 376,500 workers and generating $51.4 billion in revenues. Between 2007 and 2016, the number of African American women-owned firms increased by 112 percent – more than doubling in number and far out shadowing the overall 45 percent increase among all women-owned firms. African American women-owned firms constitute a 61 percent majority of African American-owned firms.”
Success for women entrepreneurs is not clustered in any one geographic area, but is spread throughout the country. According to American Express, “The 10 states home to the greatest number of women-owned firms as of 2016 are: California, Texas, Florida, New York, Georgia, Illinois, Michigan, Ohio, North Carolina, and Pennsylvania. And the top metropolitan areas for women-owned firms, which are found in most of these states, are: New York City, Los Angeles, Miami, Chicago, Atlanta, Dallas, Houston, Detroit, Washington DC, and San Francisco.”
In a separate study of Canadian entrepreneurs in startups and small businesses, women expressed having less difficulty than men in all the areas surveyed. “BMO asked small businesses from across the country about initial common obstacles, and those led by females expressed having a less difficult experience on all accounts,” according to MarketWired.
Fifty-three percent of women reported difficulty obtaining money and having access to capital in starting a business, compared to 81percent of men, the BMO report showed. Only one third of women surveyed, or 33 percent reported difficulty in making her own decisions, compared to 55 percent of men who reported difficulty in decision making.
Sixty-seven percent of women entrepreneurs reported it was difficult to eanr enough money before showing a profit,, compared to 83 percent of the men surveyed. And then perhaps, most surprisingly, 87 percent of men said it was challenging balancing work and family life, compared to 83 percent of women who expressed it was a challenge.
At a conference in Washington, D.C. last week, “International Monetary Fund’s managing director, Christine Lagarde, said that ensuring equal pay and economic opportunities for men and women boosts growth, promotes diversity, reduces economic inequality around the world and helps companies earn more,” writes Maria Danilova in Columbia Basin Herald.
Danilova quotes Lagarde: “It’s actually good for growth, it’s good for diversification of the economy, it’s good for reducing inequality and from a micro point of view, it’s also good for the bottom line of companies. It’s an economic no-brainer.”
In a an open letter to the next president elect of the U.S. penned before the outcome of the election, Elizabeth Gore, the Dell, Inc. entrepreneur in residence, wrote: “While women are starting businesses twice as fast as men, they face unique challenges, including experiencing disproportionately high failure rates, receiving only seven percent of venture capital and being represented in only seven percent of media stories. Through leadership and sound public policy, our country can benefit from the economic and social opportunity women entrepreneurs cultivate.”
Gore outlined eight policy initiatives that are needed for women to access capital and succeed; five recommendations for increasing networking; and five strategies to encourage women in tech.
The letter closes with this: “Through empowering and promoting women entrepreneurs, we can help create jobs and solve some of our biggest economic and social challenges. Women put 90 percent of their income into their communities and families, therefore we believe their success will not only benefit our economy, but will also have a positive impact on society. We hope that you will make fostering female entrepreneurship a domestic policy priority during your upcoming term and look forward to working with you and your administration to implement the above recommendations and fulfill one of the greatest economic opportunities of our time. ”
About the Author
Michele Weldon is editorial director of Take The Lead, an award-winning author, journalist, emerita faculty in journalism at Northwestern University and a senior leader with The OpEd Project. @micheleweldon www.micheleweldon.com