Fast Facts About The Women-Owned Business Landscape

Did you know? 35% of small businesses launched in 2013 were founded by women entrepreneurs. Here’s a closer look at the women-owned business stats and the challenges they face today.

Women-owned business entrepreneurs face unique challenges.

Intrigued by a businessnewsdaily.com article noting that small business loans given to female-owned businesses have dropped sharply since 2007, we thought it would be interesting to take a closer look at the general characteristics of the women-owned business landscape, their economic opportunities and the challenges that women entrepreneurs face.

The Women-Owned Business Landscape

The most recent state of women-owned business report for 2013 titled Womenable (a report commissioned by American Express) notes that there are more than 8.6 million firms owned by women in the U.S.:

• Employing nearly 7.8 million people
• Generating $1.3 trillion in sales as of 2013
• Representing 30% of all privately held firms, 14% of employment and 11% of revenues

Women-Owned Businesses Growing Faster, but Smaller than the Average

While in 2013 the typical privately held business earned annual revenues exceeding $400k and had two employees in addition to the owner, on average, the women-owned business had just one employee besides the owner and earned less than $155k. In fact, 88% of women-owned firms earned less than $100k in 2013 (compared to 75% of all firms). 4% of women-owned firms generate more than $500k in revenues vs. 9% of all firms.

Women Business Owners Must Be Doing Something Right

Of note, during the past six years including the years of the Great Recession, the National Association of Women Business Owners (NAWBO) notes that privately-held majority women-owned firms are the only group that has provided a net increase in employment apart from large, publicly traded organizations.

Which States Have the Most Women-Owned Businesses?

The states with the most women-owned firms in 2013 include:

1. California (1.1 million)
2. Texas (737k)
3. New York (669k)
4. Florida (573k)
5. Illinois (383k)

And of interest, these same five states were the top five states for number of women-owned businesses in 1997 as well, with Texas and New York trading places in the meantime.

Since 1997, the number of women-owned firms has increased by 59%. The Womenable report lists the states with the fastest rate of growth since 1997 when it comes to the number of women-owned firms as:

1. Georgia (up 112%)
2. Louisiana (up 94%)
3. Texas (up 93%)
4. North Carolina (up 91%)
5. Nevada (up 84%)

By contrast, the states with the slowest growth since 1997 in number of women-owned businesses includes:

1. Alaska (12%)
2. West Virginia (23%)
3. Iowa (23%)
4. Ohio (27%)
5. Kansas (27%)

The cities with the highest concentrations of women-owned businesses include (in order): New York NY, Los Angeles CA, Chicago IL, Miami FL and Washington DC. That said, the top metro areas for growth of women-owned businesses over the past 11 years include: San Antonio TX, Portland OR, Houston TX, Riverside CA and Washington DC.

Which Industries Have the Most Women-Owned Businesses?

As a percentage by industry, the sectors with the highest concentration of female-owned firms include:

1. Health care and social assistance (53%)
2. Educational services (45%)
3. Other services (41%)
4. (Tied) Administrative support (44%) and waste management services (44%)

By contrast, the industries with the lowest concentration of women-owned businesses include:

1. Construction (7%)
2. Transportation (11%)
3. Warehousing (11%)
4. Finance (20%)
5. Insurance (20%)

The Biggest Hurdles for Women-Owned Business Entrepreneurs

In their 2012 report, the 2013 recommendations made by the National Women’s Business Council (NWBC) listed access to capital as one of the four pillars for their policy recommendations, stating that, “Getting more money into the hands of women entrepreneurs continues to be the top priority in order to start and grow businesses.”

In fact, the NWBC report lists Access to Capital first, because “Getting more capital in the hands of women entrepreneurs will grow the economy and create jobs.” In addition, the report lists three additional pillars and recommendations that can contribute to greater success for women-owned businesses and the economy:

1. Access to capital by increasing lending to women-owned and women-led businesses, making more resources available to women business owners on capital and financing strategies and revising the way credit-worthiness is assessed.

2. Access to markets (increasing access of women-owned businesses into new markets and increasing their market share in target markets, thereby resulting in more competition, choice and quality) by promoting best practices in government contract procurement and identifying industries and links in supply chains that are “ripe” for entry of more women-owned and women-led firms.

3. Job creation and growth by increasing the number of women-owned firms participating in incubators and accelerators, plus, developing strategies to increase the number of women-owned businesses in all government program areas.

4. Obtaining more data about women-owned and women-led businesses through the (CFPB) Consumer Financial Protection Bureau, SBA (Small Business Association) and the Census Bureau.

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