Women-Owned Businesses: A Tale of Two Types Of Entrepreneurs – Part 1

Just the facts, ma’am

It was the best of times, it was the worst of times. It was the age of opportunity, it was the age of necessity. It was the epoch of unicorns (start-up companies valued at a billion dollars or more), it was the epoch of struggling sole proprietors. That is the story revealed by 2012 U.S. Census Bureau’s Survey of Small Business Owners for women.

  • There are more women-owned businesses than ever before, 9.9 million women-owned businesses, up from 7.8 million in 2007 — a 28% jump. “Women’s entrepreneurial appetites are at an all-time high,” said Carla Harris, chair of the National Women’s Business Council, a nonpartisan federal advisory council.
  • Women-owned businesses now represent an incredible 36% of all businesses, up from 30% in 2007.
  • African American women’s rate of starting businesses was nearly seven times as high as their white counterparts and Hispanic women nearly nine times as high. African American women business owners outnumber their male counterparts.
  • Revenues for women-owned business are $1.6 trillion, up from $1.2 in 2007. Revenues increased at a faster rate than the number of women owned businesses: 35% versus 28%.
  • More women-owned businesses surpassed the $1 million mark in revenue. These businesses grew in terms of revenue at a faster pace than women-owned business in general.
  • Women-owned business employed 8.9 million people, a rise of 1.5 million jobs from 2007. Women-owned business increased their number of employees 20% while men-owned businesses increased their number of employees by only 12%.
  • Revenues for women-owned business are $1.6 trillion, up from $1.2 in 2007. Revenues increased at a faster rate than the number of women owned businesses: 35% versus 28%.
  • More women-owned businesses surpassed the $1 million mark in revenue. These businesses grew in terms of revenue at a faster pace than women-owned business in general.
  • It was the winter of despair.
  • While women-owned businesses grew in numbers at a rate of four times that of male-owned businesses, many of their businesses are struggling and this is cause for concern. “We speculate that there may have been a bigger necessity among women of color to start their own businesses,” said Harris.  “There was an increased necessity for women of color to supplement either their existing income (as they are often paid substantially less than the national average) or creating a primary source of income.” Necessity entrepreneurs are far less likely to be successful than entrepreneurs who start businesses to pursue an opportunity.
  • While overall women-owned businesses made gains in revenue and employees at a faster pace than their male counterparts, their businesses are still dramatically smaller. Women continue to face challenges accessing capital and markets, as well as other obstacles to growth, said Harris.
  • Economies that prosper have steady streams of firms that are starting and growing. These companies are especially vital because they create nearly all net new jobs, according to the Kauffman Foundation, which researches and advocates on behalf of entrepreneurs. While there are more employer women-owned businesses, their percent of all women-owned businesses decreased and the decline was steepest among African-American and Hispanic women-business owners. Employer firms represent 10.6% of all women-owned firms and 2.6% of African American women-owned firms and 4.6% of Hispanic women-owned firms.
  • While there are more $1 million-plus women-owned businesses, so many more are smaller that the percentage of women-owned business surpassing $1 million in revenues is slightly lower in 2012 than 2007.

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