Women-owned businesses, by the numbers
For women in the United States, business is indeed booming. At 11.3 million, the number of women-owned businesses in the country has grown 45% since 2007, compared to a mere 9% increase among all businesses. Even more impressive is the fact that employment in women-owned businesses has increased 18% since the most recent recession, yet employment among all businesses has declined 1%.
While policies like the Small Business Jobs Act of 2010 and the Women’s Equity in Contracting Act have helped firms owned by women and minorities win more government contracts, they certainly haven’t resolved all the inequities women face as business owners. For instance, although women own roughly 36.2% of businesses, they receive about 4% of dollars from small business loans. Even when women do receive investments, they are relatively limited not only in the amounts they are given, but also in the types of firms from which they receive capital in the first place.
According to Bonnie Crater, president and CEO of sales and marketing analytics company Full Circle Insights, venture capitalists tend to invest in startups run by people who are similar to them, of their own “tribe.” So when female entrepreneurs receive capital, it’s overwhelmingly from VC firms that have female partners (a mere 6% of those in the U.S.).
Despite this cycle of under-representation, the proportion of women in business continues to increase. With female business owners generating over $1.6 trillion in U.S. revenues, women have proven their place in the economy. CFO of Mastercard Martina Hung-Mejean concurs, “The prevalence of ambitious, resourceful women should be regarded as a prime business opportunity. As society addresses existing cultural bias, we will do our part to help create those conditions that will strengthen and fuel the foundation for personal and economic growth.”
So why are women-owned businesses booming even with the odds stacked against them? Not only because women support each other as investors, employers, and consumers, but also precisely because of the obstacles businesswomen are forced to face. We become more critical and flexible, until success is almost inevitable.