Women Owned Businesses Have Come a Long Way But It’s Not Far Enough


How do women-owned businesses differ from companies owned by men? Not as much as they used to, according to a recent study from the SBA’s Office of Advocacy. “Business ownership no longer can be analyzed simply on the basis of the owner’s gender; businesses owned by women and men more and more share the same general development patterns,” write the authors of “Developments in Women-owned Business, 1997-2007.”

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Between 1997 and 2007, the report found, women’s share of total U.S. firms increased from 26 percent to almost 29 percent; during the same time frame, men’s share dropped from 55 percent to 51 percent. As of 2007, the top four revenue-generating industries were identical for businesses owned by women, men, and by women and men together; they were construction, manufacturing, wholesale trade, and retail trade.

But there is still one area in which women-owned businesses differ from those owned by men: Women-owned firms were less likely to have employees. In 2007, more than 88 percent were non-employer firms.

Employment is on everyone’s minds right now, and a separate report from the Ewing Marion Kauffman Foundation, “Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers,” suggests that with the right kind of help, women-owned businesses could become drivers of employment and stimulate the economy.

The Kauffman report found some similar gaps between men- and women-owed companies. For starters, while startup companies, especially high-growth startups, are the biggest source of new U.S. jobs, only about 35 percent of startup business owners are women. In addition, their startups are less likely to grow than those owned by men: Just 36 percent of women-owned startups in the report had employees, compared to 44 percent of those owned by men.

Lesa Mitchell, Kauffman Foundation vice president and author of the report, says that while women are breaking through the glass ceiling, they seem to be encountering “glass walls” that keep their businesses from expanding. As a result, three years after startup, just 19.8 percent of women-owned businesses in the Kauffman report make over $100K annually, while 32.8 percent of men-owned companies do.

Of course, some women (and men) may prefer to keep their companies small. But for those who want to grow, what steps would help them? Mitchell says:

1.) Establishing support networks early in the startup process is one way to position your business for growth. Joining the board of a company in your industry is one way to do this.

2.) She also urges successful women entrepreneurs to become role models and mentors for younger ones.

3.) And she urges more networking and collaboration between startups and bigger, more successful firms.

Networking seems to be a common thread when it comes to helping women-owned businesses thrive. In Forbes’ latest list of the best cities for women in business, the cities that topped the list had several things in common: a supportive legal environment, government procurement goals for women- or minority-owned firms, resources like the SBA’s Women’s Business Centers, and the presence of women’s business organizations to provide networking and support.

Women are often called “naturals” at networking, and most women business owners I know are pretty good at it. But to power your business to the next phase, you need to take networking to the next level. Don’t just network within your comfort zone: Get out of it.

Depending on your business’s needs, that might mean hobnobbing with angel investors or even venture capitalists. It might mean getting comfortable at male-dominated industry events or conferences, or meeting key people at companies that are much bigger than yours. Whatever you’re hoping to achieve with your business, there is someone out there who can help you do it—but not if you don’t get out there and meet them.


Image from Christian Kieffer/Shutterstock


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Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.

6 Reactions
  1. Often the first employees are hired when the owner first realizes he/she can’t do everything themselves. I also know that on average, women are better at multitasking. Therefore, I wonder if this ability causes them to “go it alone” longer. Do you feel there is any credence to this?

  2. Great thought provoking article on several topics for women entrepreneurs–thanks Rieva!
    One of my mentors (who is a male, not a female), encourages me to do something to advance my business once a week that makes me uncomfortable. In other words, he encourages me to reach to do something I never did before or try something in which I find myself a bit hesitant about–and go for it.
    To really ensure you are going to actually get out of your comfort zone, I suggest putting a time in your calendar (mine is on Tuesday morning) to take the first step, make the call or appointment, etc. My cell phone even reminds me so I have no excuse.
    Maybe men do this all the time? I truly don’t know. I do know that it has been very beneficial advice.
    All the best,
    Holly Magister, CPA,CFP
    http://www.ExitPromise.com

  3. Businesses don’t exist to employ people. They exist to create products or offer services, and to pay the people who own them.

    The employment of other people is not the primary reason for existence for ANY business, it isn’t even a SECONDARY reason to run a business; employing other people is simply a side effect of running a business that requires more work than one person can do.

    So an article suggesting women should figure out ways to hire people because people need jobs is ridiculous. Businesses need what they need, and if you can keep your business running on your own, figuring out how to add payroll you don’t need simply to create jobs would be monumentally stupid.