Women-owned businesses on the rise, but still lag in revenue, employee totals

The number of women-owned business has increased significantly in recent years, but more needs to be done to level the playing field to increase the revenue and employee counts of these businesses, according to two recent studies. More venture capital is needed, as well as mentoring, training and opportunities for women of color.

Women owned 12.3 million businesses in 2018, more than 30 times the 1972 total of 402,000, according to the American Express 2018 State of Women-Owned Business Report. Women now run about 40 percent of all U.S. businesses. Much of this increase has been led by women of color, who now own about 47 percent of all women-owned businesses.

However, the American Express report also found that while the number of women-owned businesses increased dramatically, “the proportion of total employment and revenues crept up by only a few percentage points. Over this period, total employment increased from 6 percent to 8 percent and total revenues increased from 4.0 percent to 4.3 percent.” Women-owned businesses employ an average of 0.7 workers, compared to 1.9 for all privately-held businesses, and 3.9 for all firms, including publicly traded companies.

Maximizing the contributions of women of color “is key to a stronger and healthier economy overall, job creation in local communities and upward economic mobility for women of color and their families,” the American Express report stated. “Support can take the form of training that addresses both hard and soft skills, networking events, mentorship, access to markets (such as through women-owned certification programs) and access to finance. Support should also take the form of policies, such as affordable childcare and increased access to capital.”

The Dell Technologies 2019 Women Entrepreneur Cities Index ranked 50 cities in the world that were chosen for their reputation as established or emerging hubs of innovation and entrepreneurship, and geographic diversity.  The report noted improvements over the past decade. Not surprisingly, the San Francisco area was number one, followed by New York. “Out of a total of 100 possible points … San Francisco Bay Area scored only 63.7,” the Dell report stated. “That’s evidence that there is still much work to do to level the field for women.”

Issues holding back women-owned business include: the lack of access to capital, the high-cost of living in many urban areas, the sparsity of women in leadership roles, and the lack of government-led policies that support women entrepreneurs, according to the Dell report.