ORLANDO, Fla. —As we celebrate Women’s History Month, we wanted to take some time to discuss a topic that continues come up in every business or enterprise. Although, we have moved forward throughout the years and much advance has been made, there is still a lot of work to do in terms of equal rights when it comes to salaries and multiple other challenges and obstacles facing women entrepreneurs.
Thankfully, for the benefit of innovation, business, and society as a whole, in recent years we have seen an increase in rates of women entrepreneurship. Globally, from 2015 to 2016, women entrepreneurship rates increased by double that of their male counterparts. In the United States, not only do women own 11.3 million businesses, it is estimated that 36 percent of all businesses are owned by women, an increase of six percent from 2007. Perhaps not surprisingly, according to a study by Dell, the United States ranks number one in the world in terms of providing the world’s most favorable business climate for women entrepreneurs.
But, Are Women Responsible for Business Growth?
As of 2018, there are 12.3 million women-owned businesses in the U.S. Compare that to 1972, when there were only 402,000 women-owned businesses, representing 4.6 percent of all firms.
Women own 4 out of every 10 businesses in the U.S.
Since 2007, the number of women-owned businesses has increased by 58 percent, which is better than businesses overall, which increased by only 12 percent.
Last year, 1,821 net new women-owned businesses were launched every day. Women of color founded 64 percent of those new businesses.
Women are slightly more likely to start a business than men, according to the SCORE report.
Half of women-owned businesses are concentrated in three industries: other services, health care and social assistance, and professional/scientific/technical services.
Women are significantly more likely to launch businesses within the healthcare (10%) or education sectors (9%) than men (5% in both cases). In contrast, men are significantly more likely to start businesses in the construction and manufacturing industries (12%) than women (4%).
Women-owned businesses employ the most people in healthcare and social assistance (20%), accommodations and food services (16% ) and administrative, support and waste management services (13%).
Women-owned businesses have the highest total revenue in wholesale trade (17%), retail trade (15%) and professional, scientific and technical services (10%).
Industries with the highest growth rates in terms of number of women-owned businesses include utilities (151% growth), other services (126%), construction (94%), accommodations and food services (85%), and administrative, support and waste management services (70%).
IN TERMS OF ECONOMIC IMPACT
Women-owned businesses employ 9.2 million people. (Note, this is just 8% of the total private sector workforce.)
Women-owned businesses generate $1.8 trillion revenue. (Note, this is just 4.3% of the total private sector revenue.)
From 2007 – 2018, total employment by women-owned businesses rose 21%, while employment for all businesses declined by 0.8%.
INTERESTING FACTS ABOUT FEMALE ENTREPRENEURS
According to the SCORE Report
Women Are Slightly More Likely Than Men to Start Businesses
The SCORE report found that 47% of female respondents started businesses within the last year, compared to 44% of male respondents.
Women Are More Likely to Launch Businesses in Healthcare
Specifically, 10% of female respondents launched businesses in the healthcare industry, compared to 5% of male respondents.
Women Are More Likely to Launch Education Businesses
Similarly, 9% of female respondents launched education businesses, compared to 5% of male respondents.
57% of Women Business Owners Expected Their Revenues to Increase in 2018
This suggests that women owned businesses are just about as likely to grow as male owned businesses, in which 59% said they expect revenue growth.
Just 2% of Women Expect Revenues to Decrease by More than 20%
Not many business owners, either male or female, expect their revenues to decrease dramatically in the next year. But women were actually slightly less likely to have this expectation, as 3% of males said they expect a 20% decrease or more in the next year.
13% of Women Owned Companies Have Been in Business More Than 20 Years
Women are starting businesses at a slightly faster rate now, but they don’t have quite as much longevity as male owned businesses just yet, though it’s fairly close. Of male respondents, 17% have been in business for more than 20 years.
27% of Women Owned Businesses Hired Employees Last Year
Women owned businesses are also growing in terms of team members. 27% of them saw their team increase in the last year, compared to 30% of male entrepreneurs.
29% of Female Entrepreneurs Say Their Business Is Expanding Moderately
Among males, 28 percent said their businesses are growing moderately.
5% of Female Entrepreneurs Say Their Business Is Expanding Aggressively
However, male respondents were a bit more likely to say their business is expanding aggressively than female respondents; 7% selected this option.
34% of Female Entrepreneurs Say Their Business Is Struggling
On the other end of the spectrum, just over a third of women said their business is struggling to stay afloat, compared to 33% of males.
62% of Women Entrepreneurs Say Their Business Is Their Primary Income Source
While this figure is lower than the 69% of male entrepreneurs who reported depending on their business as their primary source of income, it nonetheless suggests that women-owned businesses are much more than casual hobbies.
Just 25% of Women Seek Financing for Their Business
This is significantly less than the 34% of men who seek funding for their businesses.
31% of Women Who Do Seek Funding Are Successful
Men were again more likely than women to be successful in their quest for funding. By contrast, 34% of men who applied said they received their funding request.
59% of Women Would Like Funding for Business Growth
There are plenty of different reasons to seek business funding. But the most prevalent for both women and men was growth. Specifically, 59% of women said they sought out funding to grow their business, compared to 58% of males.
22% of Women Sought Funding to Launch a New Product
The reasons for seeking out funding were fairly consistent among women and men. However, slightly more make entrepreneurs — 26% — said they sought funding to launch a new product.
46% of Women Use Credit Cards for Their Business
While other types of loans tend to be more popular with men than women, nearly half of female respondents said they’ve used credit cards for their business, compared to 39% of males.
11% of Women Used Equity Raised from Investors
However, women were significantly less likely than males to use equity from investors. Specifically, 19% of males said they had taken this route.
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