Current Trends for Women-Owned Businesses
Women-owned businesses are on the rise – and their numbers have grown significantly over the past 20 years. Of over 29 million small businesses operating across the United States, women-owned businesses account for approximately 39%.
Current trends show concentrations in a few different industries. Here’s what the future holds for these operations:
Leading Industries and Projected Revenue Growth
SCORE, a nonprofit organization committed to supporting small firms as they launch, recently released the results of a survey of over 20,000 business owners. Women lead the way in industries such as professional services, entertainment, retail/trade and healthcare/social assistance. They’re also nearly twice as likely as men to launch companies in education and healthcare.
Revenues from women-owned businesses have increased by 103% since 1997, adding a total of $1.6 trillion to the U.S. economy. These businesses have also led the employment growth rate from 1997 to 2017 at 27%, compared to 13% for all businesses. SCORE reports that 57% of women owners surveyed expect revenues to increase in 2018.
- Women-owned businesses are growing with success. In fact, revenues from female-led companies have increased by 103% in the last two decades.
- Key players in this progress are women of color. Between 1997 and 2017, the number of minority-run, women-owned businesses increased by 467%.
- Despite taking impressive strides forward, women-owned businesses do still face hurdles – especially when it comes to securing funding.
Hurdles Facing Women-Owned Businesses
Yet women still face hurdles when trying to secure funding. According to a Harvard Business School study, only 8% of partners at the top 100 venture capital (VC) firms in the U.S. are women. Some of those hurdles also follow gender lines with men (the majority of VCs) – investing in businesses targeting men and leaving women with less funding all the way around. Women often have to find alternate means of accelerating their businesses and accessing opportunities.
As venture funding creeps ahead, the Bloomberg analysis of 2018’s 250 largest venture deals reports that only 12 of those 250 companies had female founders or all-female teams. According to the National Women’s Business Council (NWBC), networks, social conditioning and investor behavior also play a role in the limited access that female-led businesses have to capital. Women may have limited access to deep social networks that can offer connections that are valuable to raising capital. Being young is often seen as an asset when reviewing male-founded firms, but perceived as a lack of experience in women-founded firms.
A Rise in Diversity
Companies owned by women of color are steadily on the rise. While the average number of companies owned by women increased by 114% between 1997 and 2017, the number of those that were minority-owned and women-run increased by an impressive 467%. While the 2007-2012 recession drove many women of color to entrepreneurship, these women are here to stay and diverse leaders continue to have a rising overall ownership stake in the woman-owned landscape.
As of 2017, women of color accounted for 46% of female-led businesses. This means that roughly 5.1 million firms are employing 2.1 million people, which generate $361 billion in revenues. Revenues of firms owned by women of color have also increased over three times more (321%) than female-led businesses as a whole (103%).
The Key4Women program is uniquely positioned to help women gain the access to capital they need to start or grow their business.
Certification for a Woman-Owned Business
As a leading woman-owned company, there are certifications that could raise both your visibility and revenue.
Various government entities – both local and federal – are required to award a certain percentage of contracts to firms designated as Woman-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs). If your operation qualifies for either of these certifications, you could be at an advantage in bidding for government-related contracts.
Each organization has a similar certification process that will require various forms and documents, but in the end, each can provide the WOSB and/or EDWOSB certifications that can give your firm an edge in the government bidding process. It’s also possible to self-certify your business through the Small Business Administration (SBA), but the future of the self-certification process is uncertain.
Looking to the Future
Despite the rise of diverse stakeholders and the overall promising landscape for women-led firms, challenges remain – with equal access to funding a primary obstacle. As a result, many woman-led companies are turning to alternative funding sources such as crowdfunding to fuel their goals, launch new products and supercharge expansions.
The Key4Women program is uniquely positioned to help women gain the access to capital they need to start or grow their business. Our Key4Women certified advisors are well-equipped to help members navigate and understand the various financing options available to achieve their goals.
Women will continue to strive to make their way in industries they love and use competitive edges such as certification and networks like Key4Women to increase both opportunities and revenues.