Women-owned business are one of the fastest-growing groups of start-ups in America, according to data compiled by the Seventh Annual State of Women-Owned Businesses Report, commissioned by American Express OPEN. Without a doubt, women-owned businesses are greatly contributing to the country’s overall economy, as well as their local communities.
Women-owned businesses are growing at a rate of 2.5 times the national average. Compared to 20 years ago, there are currently 114% more women-owned businesses now versus then. Additionally, the survey found that businesses owned by women of color also saw an incredible increase from 20 years ago, with 467% more of these types of businesses open now than in 1998.
However, when it comes to business lending women still struggle. According to a 2014 study by the National Women’s Business Council, and women-owned firms get about 6% of the outside equity that male-owned firms do on average. Imperial Advance have been empowering women business owners with a variety of small business working capital solutions, including business term loans, revenue-based financing, lines of credit and merchant cash advance options to our clients.
Women-Owned Businesses and the Economy
On any given day in America, an average of 849 new businesses run, owned, and operated by women are starting out for the first time. Not only are there more women-owned business now than 20 years ago, but the revenue generated by each one has grown tremendously. Today, 11.6 million women-owned businesses are in operation in the United States. Within these businesses, 9 million people are employed, and the businesses are earning over $1.7 trillion in revenue, according to the U.S. Census Bureau.
Female entrepreneurs and their companies are filling a great void left in employment growth since the Great Recession. While women-owned businesses increased by 114% since 20 years ago, overall employment has only grown by 27% during the same time period. Nearly half (46%) of all women-owned businesses are owned by women of color, for a grand total of approximately 5.4 million businesses. Over two million employees and $361 billion in annual revenue is generated by businesses run by women of color.
Location of Most Women-Owned Businesses
The most women-owned businesses are located in large states like California, Texas, Florida, New York and Georgia. However, the growth rate of women-owned businesses in small or rural areas is quickly growing. Nevada, D.C., South Dakota, North Dakota, and Georgia have seen the biggest surge in women-owned businesses over the last two decades. When broken down into the top metro areas, Charlotte-Concord-Gastonia has the most women-owned businesses, followed by San Antonio, Austin, Indianapolis, Riverside (CA) and Salt Lake City.
Types of Businesses Owned by Women
Women are starting more and more businesses in the fields of construction (15% growth rate), arts, entertainment & recreation (12% growth rate), and ‘other services’ (12% growth rate). The vast majority of women-owned businesses are:
- Other Services: This includes pet care businesses and beauty salons. Currently, 2.8 million women-owned businesses fall into this category, for a rate of 23% of all women-owned businesses.
- Health Care and Social Assistance: Childcare and home health services are in this category. Fifteen percent of all women-owned firms fall into the health care and social assistance bucket, making approximately 1.8 million businesses.
- Professional/Scientific/Technical Services: Lawyers, accountants, PR firms, architects, and management consultants all fall under this category. Approximately 12% of all women-owned firms are in the professional category, translating to 1.5 million firms.
This data demonstrates the high-growth of female entrepreneurs, a trend that is predicted to continue over time. From daycares to salons to professional services, women-owned businesses are present in every industry sector.