Women entrepreneurs have an enormous economic impact in the small business community.
Before COVID-19, women were starting new businesses in record numbers. This article explores those numbers, why women are flocking to entrepreneurship, and how these trends are likely to increase as things normalize after the pandemic is over.
Women Owned-Businesses Increasing
American Express recently commissioned a study called the “2019 State of Women-Owned Businesses Report”. What they found was that women have increased their entrepreneurial efforts, particularly in the last few years.
Here are some of the numbers:
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- Between 2018 and 2019, American women started an average of 1,817 new businesses each day, a slight dip from the record high set in 2018 (1,821)
- The report studied data all the way back to 1972 and found that women-owned businesses increased by 31 times in the past 48 years.
- In 2019, there were nearly 13 million women-owned businesses in the U.S.
- Revenues stood at $1.9 trillion, employing 9.4 million workers.
- Women of color account for 50% of all women-owned businesses
Why are these numbers steadily increasing? Are there benefits to starting a small business that women are leveraging?
Why Are Women-Owned Businesses on the Rise?
The American Express study showed that women-owned businesses have increased by nearly 3,000 percent since 1972. Women now make up 42 percent of all entrepreneurs in the United States. Why is starting a small business now so attractive to women? Here are our top four reasons:
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- Women want more job flexibility in their lives. One study suggested that entrepreneurship allowed women to control their schedules, which is important because they are still the primary caregivers in most families.
- Women want the opportunity for pay equity. A U.S. Census Bureau study showed that full-time female workers make 80 percent less than men in a similar role. At the current rate, women won’t reach pay equity with men for another 100 years! Some women pursue entrepreneurship to ameliorate that sorry state of affairs.
- Women want more control over their jobs. Forbes says, “The belief that working for a company offers the most stability is a myth.” Starting a small business means you retain some control over who you work for, what you do, and how much money you make.
- Women want to advance faster. The glass ceiling is real. The Harvard Business Review conducted a study a few years ago and found that women behave just like men at work in terms of work productivity. They get the same amount done each day as men. They spend the same amount of time at work and scored the same on performance evaluations, but they still made less. If that’s not an argument for women entrepreneurship, nothing is!
After the coronavirus, we suspect that exactly none of the issues driving women into starting a small business will lessen. Women want to contribute and be paid equally for their efforts, and they certainly deserve it. The good news is there are plenty of small business loans available to women entrepreneurs. These resources will continue to help women-owned businesses make an impact long after the COVID-19 pandemic is a distant memory.
If you are looking for funding, work with a partner who understands your unique needs. Schedule a consultation with a Benetrends Consultant today.