Did you know that women start more than 1,200 new businesses daily? Women entrepreneur statistics show that 252 million entrepreneurs out of approximately 582 million in the world are female. Added to 153 million women who have already been running businesses, we can see the impact of women on business.
Research also shows that women now account for 41% of the global workforce and control more than $20 trillion in annual spending. Predictions are that this number will go up to $28 trillion in the next few years.
Women Taking Care of Business
Maximizing the contributions of women, especially women of color, is the key to a more robust and healthier economy. Overall, job creation in local communities creates economic mobility for women of color and their families upward. When we support women business owners by offering them training that addresses hard and soft skills, inviting them to networking events, mentorship, and providing access to markets (for example, through women-owned certification programs) and financing, everybody wins. We can also lend our support to women in business through legislating policies that allow affordable childcare and increased access to capital.
The Dell Technologies 2019 Women Entrepreneur Cities Index ranked 50 cities globally that were chosen for their reputation as established or emerging hubs of innovation and entrepreneurship and geographic diversity for women. The report also noted improvements over the past decade. Not surprisingly, the San Francisco area was first on the list, followed by New York.
Issues holding back women-owned businesses include the lack of access to capital, the high cost of living in many urban areas, the sparsity of women in leadership roles, and the lack of government-led policies that support women entrepreneurs, according to the Dell report.
Interestingly, roughly 90 percent of female-led businesses are categorized as “non-employer” or businesses that don’t have any paid employees. This points to a trend of women choosing to go into business for themselves and successfully running their own “one-woman-show.”
While it is estimated that women run four out of every ten firms in the United States, most of these ventures are a party of one. On the macro level, female-founded companies generate only 8 percent of total employment and 4.3 percent revenue. One major contributing factor is that female entrepreneurs have a more challenging time obtaining external funding than their male counterparts.
According to a recent Senate Committee on Small Business and Entrepreneurship report, companies founded by women only receive 16 percent of conventional small business loans. In terms of value, women receive only 1 out of every 23 dollars loaned to small businesses overall.
Women are the real heroes of small businesses – starting with less capital and accomplishing more. Most have to dip into personal savings or raise funding from family and friends to start their businesses. This trend applies to both bank loans and venture capital. Just 7% of venture capital funding goes to companies with a female CEO, with most Venture Capital funds having all-male executive teams.
The Good News
Changes are slowly coming. Federal contracts are a huge revenue source for small businesses as they award roughly $90 billion in contract work annually. Right now, women-founded small businesses (WOBS) are awarded approximately 5% of federal contract dollars annually. While undeniably disproportionate, the trend is at least upward, with the amount of federal contract money offered to WOBS increasing by 44.3 percent over the past nine years. Improving this rate will be a crucial part of getting women more access to capital.
Women wanting to start businesses can take advantage of several women-only resources and grants available in both the public and private sectors. For example, The Small Business Administration has Women’s Business Centers throughout the United States. These centers help female entrepreneurs with everything from business consulting to financing to marketing and beyond. Other resources include the National Women’s Business Council, the National Association for Women Business Owners, the Female Founders Association, and many more.
Women across the country are taking care of business, and it shows.
As Chairman of the Senate Committee on Small Business and Entrepreneurship, Senator Mark Rubio introduced the Women & Minority Equity Investment Act. This act allows women-owned firms to accept venture capital and equity investments that would constitute more than 50 percent of the ownership of a firm and still maintain ownership and control of the business for purposes of WOSB or 8(a) contracting program certifications. The venture capital or equity firm must also be woman-owned.
So let’s give a shout-out to women-owned small businesses. They are becoming more and more prevalent and important in the growth of small businesses. Thank you for taking the time to read this article. I’d love to hear your feedback. You can leave a comment below, email me at firstname.lastname@example.org or visit www.marklewisllc.com to find out more about my leadership initiatives, developmental strategies, or my book, GIVE A DAMN The Ticket to Cultural Change. I look forward to hearing from you.