Back to Basics for Many New Women Business Owners?

The recent publication of the 2016 State of Women-Owned Businesses report is chock-full of interesting trends and statistics, some of which we’ve covered here in recent blogposts. This time, the focus is industry diversity – and, while women-owned businesses are found in every industry and the longer-term trend is increasing diversification, over the most recent post-recessionary time period (2007-2016) the greatest growth we’re seeing is in some of the most traditional, foundational sectors for women.
Shopkeepers-with-open-sign-900x550
To wit, between 2007 and 2016, when the number of all women-owned businesses increased by 45%, the following four industries grew much more substantially:

  • Women-owned firms in the Other Services sector (hair and nail salons, pet sitting services) nearly doubled in number (up 98%);
  • Administrative, Support and Waste Management Services (including janitorial and landscaping services and travel agencies) are up 64%;
  • Accommodation and Food Services businesses increased by 62%; and
  • Women-owned Construction firms increased in number by 56%.

Two of these sectors are – and have been – among the most popular sectors for women in business:

  • There are currently 2.5 million women-owned firms in Other Services, accounting for 22% of all women-owned firms;
  • Health Care and Social Assistance (including child day care and home health care services) women-owned firms number 1.7 million and comprise 15% of the women-owned firm population;
  • Women-owned Professional/Scientific/Technical Services firms (including lawyers, accountants, architects, public relations firms and management consultants)number 1.4 million, comprise 13%; and
  • The Administrative, Support and Waste Management Services (including janitorial and landscaping services as well as office administrative support and travel agencies) sector is home to 1.3 million women-owned firms, comprising 11% of the women-owned firm population.

It is worth noting that a significant share of the growth in these sectors is accounted for by women of color. Overall, the report notes that 44% of women-owned firms are now minority-owned, and that nearly eight out of 10 (79%) of net new women-owned firms launched since 2007 was started by a woman of color. A significant number of these women are starting firms in traditionally female sectors. For example, while 22% of all women-owned firms are in Other Services (a large share of which are hair or nail salons), fully 36% of African American women-owned firms and 33% of Asian American women-owned firms are in this sector. In addition, while 11% of all women-owned firms are found in Administrative Services (janitorial and landscaping), 21% of Latina-owned firms are found in this sector.

So, despite more and more women launching a growing variety of businesses, certain types of traditional lines of business remain very popular – more so for many women of color.

Women of Color Driving Growth in Women’s Entrepreneurship

For the sixth year running, Womenable and American Express OPEN have taken a look at the state of women-owned businesses across the U.S., this year focusing on trends that have taken place between 2007 and 2016. The latest numbers – which can be found in The 2016 State of Women-Owned Businesses Report and the companion Summary Tables document – are remarkable in a number of ways.

First, here are the latest back-of-the-envelope numbers for you to write down and keep handy for speeches and cocktail conversation:

  • There are now 11.3 million women-owned businesses in the U.S., employing nearly 9 million people and generating over $1.6 trillion in revenues;
  • Women-owned businesses now comprise 38% of the business population, employ 8% of the country’s private sector workforce and contribute 4% of the nation’s business revenues; and
  • Since 2007, there have been 1,072 net new women-owned firms launched each and every day.

What are the most remarkable positive trends we’re seeing in this report? Here are three:

  1. Between 2007 and 2016, while the total number of firms increased by 9%, the number of women-owned firms increased by 45% – meaning that over this period the number of women-owned firms grew at a rate fully five times the national average;Women of Color Soar
  2. Who are entering the ranks of women business owners at a fast clip? Women of color; their numbers have more than doubled since 2007, to nearly 5 million. They comprise fully 44% of all women-owned firms; and
  3. The 10 fastest-growing states for women-owned firms since 2007 in terms of economic clout (a combination of growth in number, employment and revenue) are found in every region. They are:
    • North Dakota, South Dakota, Texas (all tied for first);
    • Iowa;Top States and Cities for Growth in Women-Owned Firms
    • Indiana and Wyoming (tied for 5th);
    • Georgia and Tennessee (tied for 7th);
    • Utah; and
    • Maine.

And, on the flip side, what findings bear further scrutiny, as they may indicate a lack of advancement? Again, we’ll highlight a trio:

  1. While the share of women-owned firms keeps climbing – from 28% in 2002 to 38% today – their share of employment (8%) and revenues (4%) remains essentially unchanged;
  2. Although the number of minority women-owned businesses has increased at a rate nearly three times that of all women-owned firms since 2006 (127% versus 45%), their average annual revenues are less than half that of the average women-owned firm (just under $69,000 per annum compared to $143,000); and
  3. Despite broadening industry diversity over the past two decades, since the recession the industries with the greatest share of new women-owned firms are in some of the most historically traditional sectors for women: other services (which includes hair and nail salons, up 98% compared to 45% overall); administrative, support and waste management services (home to janitorial and landscaping businesses, +64%); and accommodation and food services (+62%).

This is just a taste of the information now available in the 2016 State of Women-Owned Businesses Report. To learn more about the current state of women-owned businesses, download, read, and share the executive report, the news release, or the full set of statistical tables by clicking on these links.

And follow this blog for additional posts on trends uncovered in the report in the coming weeks and months.

Women-Owned Firms ARE Scaling Into the Middle Market

Women-Owned or -Led Firms Match Peers in Economic Clout

As we womenablers are well aware, monitoring the growth of women-owned firms into the upper reaches of business achievement is stymied not only by the capping of business revenues published by government statistics into the “$1 million+” category but by limiting the accounting of women-owned firms to just those businesses that are 51% or more owned by a woman or women – ignoring the contributions of women entrepreneurs who, by virtue of external investors or sharing equity with senior management, have become plurality rather than majority owners of their enterprises.

There’s now new information out from American Express and Dun & Bradstreet – based on D&B’s extensive database of commercially active U.S. firms – which clearly shows that, when those categorical definitions are shed, women entrepreneurs are scaling into the upper reaches of business achievement at rates equal to the average enterprise.

The new report, “The Middle Market Power Index: The Growing Economic Clout of Diverse Middle Market Firms” – authored by Womenable – finds that:
Women_Growing_Into_Middle_Market

  • Women entrepreneurs are just as likely as their male counterparts to own a middle market enterprise: Less than 1% (0.7%) of commercially-active businesses are in the middle market (defined as firms with between $10 million and $1 billion in revenues). Similar shares of women-owned/women-led firms (0.4%) and majority women-owned firms (0.7%) are found in the middle market.
  • Women are moving into the middle market at impressive rates: Between 2008 and 2014, while the number of middle market firms increased by 4.1% overall, the number of women-owned or -led firms in the middle market has increased by 32.4%, and the number of majority women-owned firms in the middle market has increased by 23.6%. Thus, women and are entering into the middle market at rates five to seven times the rate of all commercially-active businesses.
  • Women-owned and -led firms in the middle market account for a large share of employment and revenues: Women-owned/women-led middle market firms comprise just 0.4% of all women-owned or -led firms, yet employ one-quarter (23%) of workers and contribute one-quarter (25%) of the revenues accounted for by all women-owned/women-led firms. Similarly, majority (51%+) women-owned firms in the middle market represent 0.7% of all women-owned firms, yet employ one-quarter (23%) of workers and contribute one-third (32%) of revenues accounted for by majority women-owned firms.
  • Women-owned/-led firms stand toe to toe with their peers in terms of economic clout: Sixteen percent (16%) of middle market firms with a female CEO generate $50 million or more in revenues, as do 17% of all middle market enterprises. Further, 16% of female-led middle market firms employ 500 or more workers, as do 15% of all middle market enterprises.

In addition to a look at trends among women-owned and women-owned and -led firms, the report also investigates the growth of minority-owned firms in the middle market.

To download and read this exciting new report, click on the link above or visit Womenable’s authored research page (which also includes another growth-focused analysis that may be of interest, “Growing Under the Radar.”). An infographic summarizing the key findings of this analysis from a women’s entrepreneurship perspective is available on Womenable’s Infogr.am page.

Women-Owned Businesses Continue to Flourish

Women-Owned Businesses Continue to Flourish

For the fifth year running, Womenable has combined forces with American Express OPEN to analyze trends in women’s enterprise growth and development. The 2015 State of Women-Owned Businesses report (which will soon be published) tells us that:2015 SWOB charts.003

  • The number of women-owned firms in the U.S. continues to climb, and is now estimated to have surpassed 9.4 million enterprises – 30% of all businesses in the country;
  • The revenue generated by these enterprises is now estimated to stand at nearly $1.5 trillion, and has increased by 79% since 1997; and
  • Women-owned firms now employ over 7.9 million workers (excluding owners), providing one in seven jobs among privately-owned businesses.

In fact, since 1997 there have been an average of 608 net new women-owned firms launched each and every day – and the rate just over the past year stands at 887 per day. The number of women-owned firms is increasing at a rate 1-1/2 times the national average.

Where are we seeing these women-owned firms? The short answer – everywhere. Women-owned firms are found in every state and in every industry. The fastest growing industry sector is educational services, which has seen a 67% increase in the number of women-owned firms since 2007 versus an overall 21% increase. And the states seeing the fastest growth in women’s entrepreneurship are Georgia, Texas, North Carolina, North Dakota and New York.women_diverse 900x550

And who’s starting these enterprises? Increasingly, women of every ethnic background. Back in 1997, there were just under 1 million firms owned by non-Caucasian women, representing one in six (17%) women-owned firms. Now, there are an estimated 3.1 million minority women-owned firms, representing one in three (33%) women-owned firms. Indeed, the growth in the number of African American, Asian American, Latina, Native American/Alaska Native and Native Hawaiian/Pacific Islander since 1997 surpasses the growth in the number of non-minority women-owned firms several-fold. The growing diversity of women-owned firms is one of the most remarkable trends of the past decade.

The 2015 State of Women-Owned Businesses Report, like its predecessors, contains a wealth of empowering facts, figures and insights. The full report is being formatted now, but until it’s publicly available, click on the link below to download the summary tables, containing all of the statistics at the national, state, metropolitan, industry and ethnic group level.

Cheers, fellow womenablers!

2015 State of Women-Owned Businesses: Summary Tables

 

The Envelope Please…

woman_silouette_ribbonIt’s a new year … and the beginning of awards season. In the world of entertainment, it’ll soon be time for the BAFTA Awards, the Eurovision Song Contest, and the Academy Awards (Oscars) in Hollywood. The call is also out for outstanding women business owners – so why not consider nominating yourself or another deserving woman entrepreneur for one of these awards:

  • The Cartier Women’s Initiative Awards: Launched in 2006 by Cartier, the Women’s Forum, McKinsey and Company and the INSEAD business school, these awards focus on start-up enterprises in five world regions. Nominations are open now through the end of February at this link.
  • The International Alliance for Women’s World of Difference Awards: This award recognizes a diverse group of women in corporate, entrepreneurial, public sector and social enterprises who are making a difference to their communities. Nominations are open through February 15. Learn more here.
  • The l’Oreal-UNESCO for Women in Science program recognizes accomplished women in scientific endeavor, as well as helps younger researchers and supports non-profit organizations focused on women in science or “beauty for all.” To learn more, visit the submitting your project or 2014 awardees pages.

If your idea for recognition is giving back to other women, then consider signing up to be a Global Community Champion for Women’s Economic Empowerment, a program offered by UN Women. You can learn more and apply to be a part of it at this link. The sign-up period ends on January 29.

Three other high-profile international awards of note happen later in the year. So mark your calendars and be on the lookout for these awards opportunities:

  • The Anita Borg Institute’s Women of Vision ABIE Awards: This organization, focused on connecting, mentoring and recognizing women in computing, bestows a number of annual awards, including an entrepreneurship award. However, nominations for this award are open in December and January, and are awarded at their annual conference in May of each year.
  • Enterprising Women magazine’s Enterprising Women of the Year awards recognize women business owners of accomplishment in a number of business revenue levels. Nominations are open late in the year and awards are given at the magazine’s annual summit and gala in March of each year. Click here to read more about the just-announced 2015 awardees.
  • Nominations for the Veuve Clicquot Business Woman Award have likewise just closed. The annual award, recognizing enterprising spirit and determination in the vein of “La Grande Dame de la Champagne” Madame Clicquot, is now awarded in 27 countries, typically bestowed at a gala event in May of each year. Learn more about the award here.

Grist for the Mill: Supporting Growth-Oriented Women Entrepreneurs

There’s increasing interest in moving beyond supporting the entry of more women into business ownership, toward a greater understanding of what growth-oriented women business owners need to get to the next level in their entrepreneurial journey. There are two new reports that shed some light on this issue.

gristmillFirst, infoDev, a multi-donor program in the World Bank Group, recently published Growing Women-led Enterprises in the Mekong: Testing a Methodology for Accelerating Growth. This report, supported by the government of Finland, pilot tested a series of workshops, peer-to-peer sessions and one-on-one coaching over a six-month period in Cambodia, Lao PDR and Vietnam.

Secondly, the World Bank’s Trade and Competitiveness group also just published a policy note entitled, Supporting Growth-Oriented Women Entrepreneurs: A Review of Evidence and Key Challenges, which draws upon and synthesizes existing research from within and outside the Bank.

Each of these reports is well worth reading on their own, but what is perhaps most interesting and relevant is that they draw some similar conclusions:

  • Short-term training with little or no follow-up does not always lead to measurable business growth. This can be a funding challenge for defined-length, externally sponsored projects and speaks of the need for a greater focus on sustainability measures and local partnerships;
  • Established women business owners benefit greatly from peer-to-peer learning. Merely providing networking opportunities for women business owners can reap valuable rewards;
  • Selecting women who are “growth-oriented” can be challenging: mindsets may matter as much as recent performance; and
  • Existing programs are very heterogeneous, with a wide variety of interventions. This reduces the ability to draw conclusions about what works best and share lessons learned.

Adding to this new information is some research conducted by Womenable way back in 2007, Mapping the Missing Middle: Determining the Desire and Dimensions of Second-Stage Women Business Owners, which not only raised the point that not enough policy and programmatic attention was being paid to established women-owned firms that had not yet cracked the million-dollar revenue barrier, but sized this population at between 16% (if defined to include firms with employees or between $100,000 and $1 million in revenues) and fully 91% (if having employees and revenues over $100,000 was not a criterion) of the entire women-owned business population. A short survey was conducted among established women business owners in the United States and found that “missing middle” women business owners:

  • Were indeed mostly growth-oriented – 64% were in search of tools for business growth;
  • Had a much greater appetite for information than the average woman business owner; and
  • Wanted to learn from one another, would prefer just-in-time, experiential learning over classroom-style information, and would value the guidance of a mentor.

We applaud this increased focus on providing “grist for the mill” of business growth – and for the grist provided by these two new reports!

Women-Owned Firms Making Their Mark in Federal Procurement

As a firm grows and seeks new markets for its products and services, public sector clients can prove to be a winning avenue for expansion. That’s what many women business owners in the U.S. are finding, according to a series of recent surveys conducted among active small business contractors.

Puzzling Elements.The groundbreaking research – conducted for American Express OPEN’s Open for Government Contracts initiative by Womenable – queried business owners who are registered on the U.S. federal government’s System for Award Management (SAM) and who had performed on a contract within the previous five years. Surveys were conducted in 2010, 2011 and 2013 and – in addition to overall analysis among all small firms – special reports focusing on trends among women-owned firms were published.

According to these reports (which are listed and hyperlinked below), women-owned firms that are involved in contracting are every bit as accomplished in terms of employment and revenue size as their male counterparts. Specifically, over the past three surveys, we have learned that:

  • It takes time and money: In 2012, active small business contractors invested an average of $128,628 in time and money during the course of the year seeking federal procurement opportunities. This includes the time spent attending meetings and seminars, investigating opportunities online or in person, and preparing and submitting bids. Women business owners invested somewhat less – $112,112 – but were every bit as successful. On average, it took women-owned firms an average of 20 months and 4.3 bids before winning their first contract; very similar to the 25 months and 5 bids that it took men-owned firms.
  • Perseverance pays off: Once small firms are actively engaged in federal contracting, women-owned firms are every bit as accomplished in terms of business size as are their male colleagues. While in general, among all firms, women-owned firms are smaller than average, among active small business contractors, 31% of women and 30% of men employ 50 or more workers in their firms, and 42% and 48%, respectively, generate $1 million or more in revenue. Selling to the federal government can lead to substantial business growth!
  • Policies matter: Back in 1994, the federal government established a 5% spending goal for federal agencies to encourage contracting with women-owned small businesses. That goal has never been met, but in fiscal year 2012 it reached 4%. There’s hope that the goal will finally be reached by virtue of a recently-established WOSB Procurement Program, which gives federal agency procurement personnel more flexibility in letting out contracts for bids (including lifting prior caps on the value of contracts that could be awarded to women-owned firms). From the perspective of active women business owner contractors, the program is starting to find its footing. Back in the 2011 survey, when the program was just launched, just over one-third (37%) of women surveyed said they found the program useful in seeking federal contracting opportunities. Now, in the 2013 survey, the view has improved considerably – fully 61% find the program useful, including 28% who find it very or extremely useful. With this playing field-leveling policy, more and more women are finding federal procurement success.

Click on the links below to download and read these reports. You may also wish to read more about the American Express OPEN/SBA/WIPP ChallengeHer program or learn more about the status of the newly-strengthened Women-Owned Small Business Procurement program. According to recent procurement statistics, even though the overall 23% small business procurement goal was recently met, the 5% goal for federal spending with women-owned small businesses was not – nor has it ever – been met. A sure sign, if there ever was one, that more needs to be done to increase access for women-owned small businesses to this important avenue for growth.

2013 – Women-Owned Small Businesses in Federal Procurement: Building Momentum, Reaping Rewards

2011 – Women and Minority Small Business Contractors: Divergent Paths for Equal Success

2010 – Women and Minority Federal Small Business Contractors: Greater Challenges, Deeper Motivations, Different Strategies, and Equal Success