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.

Advertisements

New Data Show Increasing Growth Among Women-Owned Firms, and Yet…

The first wave of information from the 2012 Survey of Business Owners has just been released from the U.S. Census Bureau, and the news is largely positive – for women-owned businesses at least.SBO_infographic1

While the final numbers will not be out until the end of the year, preliminary figures indicate that:

  • there are now 9.9 million women-owned firms,
  • employing nearly 9 million workers, and
  • generating $1.6 trillion in revenues.

These numbers reveal that women-owned firms now comprise 36% of all privately-held firms (a full accounting of U.S. firms, including large publicly-traded firms, won’t be published until December) – up from a 29% share in 2002.

Where’s this growth coming from? By and large, from women of color. Back in 2002, one in seven (14%) of women-owned firms was led by a woman of color; that share has risen to nearly four in 10 (38%) as of 2012. The growth in the number of women-owned firms over that decade – 53% overall – is strongly outpaced among African American (+179%), Latina (+173%), Native Hawaiian (+138%) and Asian American (+122%) women-owned firms, and also surpassed by Native American/Alaska Native (+68%) women-owned firms.

Looking at trends by industry sector finds the strongest growth in the number of women-owned firms to be in administrative support and waste management services (think office administrative services, landscaping and janitorial services, +101%), educational services (including private schools, computer and language instruction, +92%) and other services (including auto repair, pet sitting and beauty salons, +86%). At the other end of the spectrum, there’s been just an 11% increase in women-owned retail trade businesses.

When looking at the growth in women-owned firms compared to all privately-held firms, the news is quite positive overall: women are now starting businesses at a higher rate post-recession compared to the five years leading up to the recession, while start-ups have plummeted overall.

That said, however, while women now represent over one-third of all privately-owned firms, their share of employment and revenues among this population has declined between 2002 and 2012.

This represents the grey lining in an otherwise silver cloud – but the full picture won’t be revealed until more detailed tabulations by employment and revenue size of firm and more detailed geography are available late in the year.

 

(Click on the infographic at the right to view the interactive version on Womenable’s infogr.am page.)

Business Support “On Equal Terms” in Sweden? Nära Skjuter Ingen Hare!

After eight excellent years of promoting women’s entrepreneurship in Sweden, the newly-elected government has closed programmatic support in this area (thus highlighting once again that elections do matter).
Swedish flag and people copy
In wrapping up their efforts, however, Tillväxtverket (the Swedish Agency for Economic and Regional Growth) has compiled some lessons learned reports. Here, for your enlightenment, are:

Many thanks to fellow womenabler Gunilla Thorstensson for sharing these reports with us. Unfortunately, business promotion “on equal terms” (meaning “one size fits all”) will likely not stand women entrepreneurs in Sweden in good stead going forward. As they say in Sweden, nära skjuter ingen hare!

Perhaps this will spark advocacy and action among women’s business groups there. From adversity can come increased strength and sisterhood.

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.

Top Ten Womenabling Research Facts of 2014

Top TenWe’ve kept tabs on the facts and figures that have been published during the course of the year (as we do every year). Here are what we consider to be the top ten new research-based facts about women business owners and their enterprises of 2014. They fall into four general categories: money, mentoring, metrics and STEM (science, technology, engineering and math). Here they are, along with links to the original source material for your reference. Many happy returns of the season from Womenable!

Money

  1. International CurrencyClosing the credit cap for women-owned SMEs across the developing world as a whole could boost the growth in per capita income by over 110 basis points (1.1%) on average. ~ Goldman Sachs Global Market Institute. February 2014. Giving credit where it is due.

  2. In an analysis of over 25,000 projects on Kickstarter, launched by 22,000 entrepreneurs between 2009 and 2012 and supported by over 1.1 million investors, researchers found that this crowdfunding platform is more hospitable than many other forms of business financing for women. For example: 1) a significant share of Kickstarter investors (40%) are women; 2) these women are more likely than men (40% versus 23%) to invest in women-led projects; and 3) women-led projects are more successful than those launched by men. The fundraising success rate for women was 69.5%, compared to 61.4% for men. ~ Dan Maroum, Alicia Robb, Orly Sade. May 2014. Gender Dynamics in Crowdfunding (Kickstarter): Evidence on Entrepreneurs, Investors, Deals and Taste Based Discrimination.


  3. The amount of early-stage investment in companies with a woman on the executive team has tripled to 15 percent from 5 percent in the last 15 years. Despite this positive trend, 85 percent of all venture capital–funded businesses have no women on the executive team. This is the case despite the finding that businesses with a woman on the executive team are more likely to have higher valuations at both first and last funding (64 percent higher and 49 percent higher, respectively). ~ Candida G. Brush, Patricia G. Greene, Lakshmi Balachandra, Amy E. Davis. September 2014. Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital.


  4. In 2013 women angels represented 19.4% of the angel market, similar to 2012 (21.8%). Women-owned ventures accounted for 23% of the entrepreneurs that were seeking angel capital and 19% of these women entrepreneurs received angel investment in 2013. ~ Jeffrey Sohl, Center for Venture Research. April 2014. The Angel Investor Market in 2013: A Return to Seed Investing.

Mentors

  1. Closeup of business people with hands on handsAn analysis of high-growth women entrepreneurs (those with sales or employment growth of 20%+ over the past three years) in Latin America and the Caribbean finds that growing up in an entrepreneurial family helps define their entrepreneurial spirit. Both high-growth men and women are more likely than average to seek mentors to guide their growth. However, while high-growth men entrepreneurs seek mentors from outside their family, women tend to receive guidance from within their own families. ~ EY, Multilateral Investment Fund of the Inter-American Development Bank. March 2014. WEGrow: Unlocking the Growth Potential of Women Entrepreneurs in Latin America and the Caribbean.

  2. A comparison of a survey of women in technology firms launched between 2002 and 2012 with a more general sampling of technology firms founded in 2004 (the Kauffman Firm Survey) finds that female and male entrepreneurs have a lot in common. They would seem to start their companies for similar reasons, cite similar self-perceived reasons for success, and face similar challenges. However, several differences stand out: 1) the women technology entrepreneurs surveyed don’t appear to have had inspiring role models as their principal motivation; 2) women entrepreneurs in general appear to respond differently than men do to failure, and cite lessons learned from failure as a big reason for success; and 3) there is a financing gap when it comes to high-tech and high-potential women entrepreneurs. That financing gap turns into a growth gap in terms of company outcomes. Finding ways to fill that financing gap could have a huge payoff in job creation and innovation. ~ Alicia Robb, Susan Coleman, Dane Stangler. November 2014. Sources of Economic Hope: Women’s Entrepreneurship.

Metrics

  1. measuring_tape copyIn an analysis of the conditions in which growth-oriented women’s entrepreneurship can prosper, the United States (with a score of 83), Australia (80) and Sweden (73) are the top ranking countries among 30 analyzed. They are followed by France and Germany (tied at 67), Chile (55), the United Kingdom (54) and Poland (51) which all received an overall score of 50 or more. ~ Ruta Aidis, The GEDI Institute. June 2014. The Gender Global Entrepreneurship and Development Index.

  2. As of 2012, just under one-third (29%) of the 40.6 million business owners in Europe are women, up from 26% in 2003. Over that nine-year period, the share of business owners who are female has risen most strongly in Lichtenstein (with a 16% increase in the share of entrepreneurs who are female), Iceland (+8%), and Cyprus (+8%), compared with the overall 3% increase. ~ European Commission. September 2014. Statistical Data on Women Entrepreneurs in Europe.


  3. On average over the past 17 years, there has been a net increase of 591 women-owned businesses in the United States each and every day. The number of net new women-owned firms has fallen in the wake of the recession – there was a net increase of 714 women-owned firms per day from 2002 to 2007, and a lesser 506 per day between 2007 and 2014 – but start-up activity is increasing. Just in the past year, there have been an estimated 1,288 net new women-owned firms launched each and every day. ~ American Express OPEN & Womenable. March 2014. The 2014 State of Women-Owned Businesses Report.

STEM

  1. womanlab copyWomen have increased their representation in STEM graduate enrollment, but that increase has been uneven across STEM fields. Women have achieved parity for PhDs in biological and medical sciences, but their enrollment continues to lag in some of the most entrepreneurial fields, such as bioengineering, mechanical, and civil engineering and materials science. Further, across all STEM fields, female PhDs have lower rates of entrepreneurship than their male colleagues (5% compared to 7%), and file fewer patents (15% vs. 28%). ~ Margaret E. Blume-Kohout for SBA Office of Advocacy. October 2014. Understanding the Gender Gap in STEM Fields Entrepreneurship.

  2. (A 2-for-1 listing: this report also appeared in our ‘mentors’ category) A comparison of a survey of women in technology firms launched between 2002 and 2012 with a more general sampling of technology firms founded in 2004 (the Kauffman Firm Survey) finds that female and male entrepreneurs have a lot in common. They would seem to start their companies for similar reasons, cite similar self-perceived reasons for success, and face similar challenges. However, several differences stand out: 1) the women technology entrepreneurs surveyed don’t appear to have had inspiring role models as their principal motivation; 2) women entrepreneurs in general appear to respond differently than men do to failure, and cite lessons learned from failure as a big reason for success; and 3) there is a financing gap when it comes to high-tech and high-potential women entrepreneurs. That financing gap turns into a growth gap in terms of company outcomes. Finding ways to fill that financing gap could have a huge payoff in job creation and innovation. ~ Alicia Robb, Susan Coleman, Dane Stangler. November 2014. Sources of Economic Hope: Women’s Entrepreneurship.

Woman to Woman: Supporting Women’s Entrepreneurship Through the Power of the Purse

There’s a well-known saying that if you truly wish to support a cause you should “put your money where your mouth is” – meaning not only that talk means little without action to back it up, but that supporting a cause financially beats verbal praise alone.

So it is as well with women’s entrepreneurship: one of the best ways that women-owned firms can be supported is by purchasing their products and services.
pink purse
This pursuit is becoming easier for women-owned purveyors of consumer products through a growing number of online marketplaces focused solely or predominantly on products made by women-owned firms. Perhaps the most well-known is etsy.com, geared toward smaller scale handmade goods, but there are others recently coming online:

  • ananasa.com, an online marketplace based in the Middle East,
  • farandwidecollective.com, a site that sources products from developing economies,
  • pink51.com, which exhorts visitors to “shop with a purpose” – meaning that a portion of all sales are donated to women-focused causes,
  • shop.plumalley.co, sister site of plumalley.co, which invests in women-owned and -led businesses and is based in New York City, and
  • rosiemade.com, which offers goods made by women-owned firms in the USA, and which is meant to remind us of Rosie “We Can Do It” the Riveter.

The biggest potential impact may come through a new initiative spearheaded by Walmart, the world’s largest retailer, in partnership with WEConnect International and the Women’s Business Enterprise National Council (WBENC). In 2012 Walmart debuted an online marketplace for women-owned products under the “Empowering Women Together” moniker as a part of their Global Women’s Economic Empowerment Initiative launched in 2011. Now, they are expanding that effort to include a “woman-owned” label on products not only online but in stores. (See this recent Bloomberg Businessweek article for more information.) This could take the Power of the Purse to a whole new level.