Women-owned businesses are on the rise

By Tiffany C. Wright
SMB Insights | Originally published October 20, 2022

According to the Small Business Administration (SBA), the number of women-owned businesses (WOBs) grew to 42 percent — nearly 13 million — of all U.S. businesses in 2019. Given that 50 years ago there were only 406,000 WOBs — 4.6 percent of the total — this is an amazing achievement. Yes, the overwhelming majority of these businesses are classified as self-employed or non-employer firms. However, successful self-employed firms make enough money to pay their owners a living wage and help women contribute significantly to their family’s financial wherewithal and independence.

In this article, we explore how far women have come in the business ownership realm, the impacts they have made, the challenges still faced and the solutions being enacted.

• Growth in the number of women-owned businesses
• Industries with high percentages of WOBs
• Women’s access to capital
• Reasons for growth in WOBs
• Entrée into entrepreneurship
• Remaining challenges — and solutions

Growth in the number of women-owned businesses

While the growth in the number of women-owned businesses and their impact has been continuous, the percentage of the overall has surged and waned over the years. Following are a few statistics of note:

• WOBs represented 26 percent of total small businesses in 1997, a major increase from 1972.
• The number of woman-owned employer firms now number approximately 1.2 million — 21 percent of the total.
• Employer WOBs generated $1.8 trillion in sales and employed over 10 million workers in 2018. (“Non-employer” refers to businesses that have no W-2 employees.)
• Between 1997 and 2007, most privately held companies lost employees, but WOBs added approximately 500,000 jobs.

These statistics show that more women are starting and buying businesses as well as growing their existing businesses and positively impacting their communities.

 

Industries with high percentages of WOBs

Although women are getting close to parity in business ownership with men, the average financial contribution of WOBs still lags. One huge driver of these differences is the industries that women enter.

• According to a study commissioned by the SBA’s Office of Advocacy, women typically operate in lower-growth industries with smaller businesses.
• In particular, women tend to cluster in retail, personal services and professional services. The “Professional, Scientific and Technical Services” NAICS category is the most popular among women employer firms, comprising nearly 17 percent.

The industry choices women pursue should not be a surprise. Women, like men, typically enter industries they have experience with or are familiar with. In college, women often major in social work, sociology, education, nursing and language, so it makes sense that they then enter fields such as healthcare, education and social work after school and operate businesses in similar fields…[MORE]

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To read the entire article by Tiffany C. Wright at the SMB Insights website , visit: Women-owned businesses are on the rise