The Current State of Women-Owned Businesses
As of 2015, more than 9.4 million women-owned businesses currently operating in the United States are generating more than $1.4 trillion in annual revenue and employing nearly 7.9 million. Additionally one in five businesses with revenue of $1 million or more is woman-owned, but just 4.2% of all women-owned companies have revenues of 1 million or more. The majority of women-owned businesses (like most small businesses, frankly) stagnate below $100k. 80% of women-owned businesses generate less than $100k per year.
Women-owned businesses tend to be less successful than businesses owned by men, according to Gallup. First, women generally start businesses in sectors that tend to be less profitable than sectors where male-owned businesses dominate. Second, women business owners are less likely to seek financing (and less likely to receive it when they do), which hinders the growth of their businesses and keeps them small. In fact, the amount of investor dollars going to female founders was less than five percent just a decade ago.
And improvement in outside funding to women’s enterprises is slow. For example, fourteen percent of venture capital investments this year in the U.S. went to companies founded or co-founded by a woman, up just nine percent in a ten year period. Instead, women tend to fund their businesses with credit cards, personal savings, family, and friends, as opposed to seeking other funding options that spread the risk among multiple investors.
Currently, female-owned businesses account for approximately a million employer firms—or businesses with at least one employee—and those that do employ others provide jobs for about 8 million people and add over a trillion dollars to the United States economy. Comparatively, there are three times as many male-owned businesses that employ others, and businesses owned by men employ about 41 million people and they add over eight times as much as female-owned businesses do to the U.S. economy.
Next: Why Women-Owned Businesses Struggle More…and How to Fix It
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