If you are already successfully running a women-owned business, pat yourself on the back. You have made it! And if you have a great idea to initiate the one, there is no better time than now. This is because women-owned businesses are soaring.
According to the 2019 State Of Women-Owned Businesses Report, the number of women-owned businesses climbed 21% between 2014 and 2019.
Being a women entrepreneur, you must have felt proud of seeing your fellow women establishing their businesses.
Let’s explore how businesses owned by women have been doing for the last few years.
Growth of Women-Owned Businesses Vs All Firms
Businesses owned by women have seen more growth than that of all businesses combined over the last five years.
As you see from the below graph, the women-owned businesses have increased by 21%, but all businesses combined grew only by 9%.
Businesses owned by women have witnessed more than double the growth rate that of all businesses combined.
When it comes to creating employment and generating revenue, women-led businesses have outperformed all businesses combined.
Why do Women Start Their Own Businesses?
Over the past couple of years, the number of net businesses owned by women has increased significantly.
Necessity, flexibility and opportunity are the main factors driving net new numbers.
1. Necessity Entrepreneurs
Women who cannot find good jobs or who are unemployed fall into this category. These women don’t have any other option except starting their own businesses.
Employed women who cannot survive on their salaries and have to start their businesses to supplement their incomes are also necessity entrepreneurs.
2. Flexibility Entrepreneurs
Some women don’t find workplace policies flexible enough and want more control over what they do, where they do, and when they do. And starting their businesses is the only way to have the desired flexibility.
3. Opportunity Entrepreneurs
These entrepreneurs enter the market to exploit the existing possibilities.
As such entrepreneurs choose to start their businesses at a good time, they have a higher chance of survival and growth than necessity entrepreneurs and flexibility entrepreneurs.
Which Industry Has More Women-Owned Business?
According to the report, the participation of businesses owned by women is high in the following three industries:
1. Other Services (including hair and nail salons & pet care business)
This segment has the highest concentration (22%) of women-owned businesses. And the number of women-owned businesses in this category climbed 29% that is more than the growth of all women-owned businesses (21%).
Necessity and flexibility entrepreneurs often started their businesses in this segment.
2. Healthcare and Social Assistance (including child daycare & home health care services)
This segment of women-owned businesses has witnessed a growth rate of 14% that is lower than the growth rate of all women-owned businesses combined. Women entrepreneurs in this category tend to be full-time entrepreneurs.
3. Professional and Technical Services (including PR firms, bookkeepers, and lawyers)
This category of women-owned businesses also has a growth rate of 14% lower than the growth rate of all women-owned businesses combined. This category often attracts sidepreneurs.
Businesses owned by women, representing 42% of all businesses, are an economical growth driver of the US. Though they are already having revenue of $1.9 trillion and employing 9.4 million workers, there is still size disparity between women-owned businesses and others. And making policy to bridge the gap helps everyone, not only women.
To realize the true economic potential of businesses owned by women, many changes are required in business practices and attitude. Women entrepreneurs still have to overcome funding challenges. But the incremental growth of women-owned businesses heralds a brighter picture.
The report took data from the United States Census Bureau Survey of Business Owners (SBO) into consideration. To know more about the Survey of Business Owners, visit here.