More Women-Owned Businesses at the Starting Gate

With the recent release of the findings from the soon-to-be-published 2014 State of Women-Owned Businesses Report (here’s a link to the news release; the full report is coming soon), we now have the most up-to-date accounting of the number and growth trends among women-owned businesses in the country. As of 2014, we (Womenable authored the report, which will be published soon by American Express OPEN) estimate that there are 9,087,200 majority-owned and privately-held women-owned firms, employing 7,854,200 employees in addition to the owner, and generating over $1.4 trillion ($1,410,940,800,000) in revenues.

What are some of the other key trends uncovered in this year’s report? Among them:Census 2014 charts010

  • Between 1997 and 2014, when the number of businesses in the United States increased by 47%, the number of women-owned firms increased by 68% – a rate 1-1/2 times the national average. Indeed, the growth in the number (up 68%), employment (up 11%) and revenues (up 72%) of women-owned firms over the past 17 years exceeds the growth rates of all but the largest, publicly-traded firms – topping growth rates among all other privately-held businesses over this period.
  • Nationally, the number of women-owned firms has increased by 68% since 1997. The states with the fastest growth in the number of women-owned firms over the past 17 years are: Georgia (up 118%), Texas (98%), North Carolina (91%), Nevada (91%) and Mississippi (81%). In terms of growth in combined economic clout, however – meaning averaging together the rankings in growth in the number, revenues and employment of women-owned firms – the states in which all of these measures combined place women-owned firms in a much better than average position over the 1997 to 2014 period are: North Dakota, the District of Columbia, Nevada, Arizona and Georgia.
  • In 1997, there were just under 1 million (929,445) firms owned by women of color, accounting for one in six (17%) women-owned firms. That number has skyrocketed to an estimated 2,934,500 as of 2014, now comprising one in three (32%) women-owned firms. Firms owned by African American women number an estimated 1,237,900 as of 2014. These 1.2 million firms employ 287,100 workers in addition to the owner and generate an estimated $49.5 billion in revenue. Firms owned by Latinas number an estimated 1,033,100 as of 2014. These firms employ 433,600 workers in addition to the owner and generate an estimated $71.1 billion in revenue. Firms owned by Asian American women number an estimated 675,900 as of 2014. These firms employ 699,200 workers in addition to the owner and generate an estimated $115 billion in revenue.
  • While firms owned by women of color are smaller than non-minority women-owned businesses both in terms of average employment and revenues, their growth in number and economic clout is generally far outpacing that of all women-owned firms. Indeed, the growth in the number of African American (up 296% from 1997 to 2014), Asian American (+179%), Latina (+206%), Native American/ Alaska Native (124%), and Native Hawaiian/Pacific Islander (+247%) women-owned firms all top the growth in the number of non-minority women-owned firms (+37%) over the past 17 years.

New this year is a look at business start-up activity, which shows that there are an increasing number of women business owners at the starting gate. On average over the past 17 years, there has been a net increase* of 591 women-owned businesses 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.Census 2014 charts005

What’s the bottom line? Women business owners are not only here to stay, they are moving into entrepreneurship in equal numbers. The challenge that remains is moving women-owned firms up the growth continuum, and gaining a greater understanding of impediments to growth and how best to follow a woman’s path from a start-up with promise to a successful business that moves beyond the “majority-owned, privately-held” category to being woman-led and perhaps publicly-traded. But that’s a topic for another day!

The full report provides detailed data at the state level, industry level, and by size of firm, so stay tuned to womenable.com; the report will be posted there as soon as it’s published.

 

* “Net increase” takes into account all of the new women-owned firms minus the number of women-owned firms that either ceased operations or ceased to be majority women-owned.

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WOSBs Getting Their Contracting Groove On?

How are women business owners doing in the federal procurement marketplace? According to a new report, authored by Womenable for the American Express OPEN for Government Contracts program, the answer is “increasingly well.” Even though, on average, women business owners who are active federal contractors have been seeking contracts for less time than their male counterparts, they are every bit as successful in terms of overall revenue and employment, and are rapidly catching up in terms of federal contract award value.

pot_o_goldOne reason for their growing success may be the increased traction of the Women-Owned Small Business (WOSB) Procurement Program, established in 2011. Two years ago, just over one-third (37%) of women business owners who had self-certified as a woman-owned small business (WOSB) found that designation to be useful in seeking contracting opportunities. Now, a 67% majority of WOSBs find the designation useful, including 28% who find it very or extremely useful.

Other key findings from the report include:

  • In each of the three American Express OPEN for Government Contracts surveys, women-owned firms have been found to invest less time and money researching opportunities and submitting proposals for federal contracts. In 2012, women-owned firms spent $112,112 pursuing federal contracts, compared to the $137,040 investment made by men-owned firms;
  • The average investment made by small businesses in seeking federal contracts has, however, risen dramatically over the past three years, with a greater than average increase seen among women-owned firms (up 59% compared to a 49% increase among all small contractors);
  • While women invest less time and money seeking federal contracts, their prime and sub-contracting bidding activity and success rates match the average for all active small firm contractors; and
  • On average, it takes a small business new to the federal procurement marketplace about two years (24 months) and 4.7 unsuccessful bids before winning that all-important first contract. It took women business owners less time and effort (20 months and 4.3 unsuccessful bids) to land their first contract compared to their male counterparts (25 months and 5.0 unsuccessful bids).

So, while selling goods and services to federal agencies may not be the “pot of gold at the end of the rainbow,” for many small businesses – including an increasing number owned by women – federal procurement is an important avenue to business growth.

You may download and read the report, “Women-Owned Small Businesses in Federal Procurement: Building Momentum, Reaping Rewards,” at the highlighted link. This report is the second in a series of four reports. The first, “Trends in Federal Contracting for Small Businesses,” may also be downloaded and read. The other two reports, the next focused on trends in federal contracting among minority business owners and the final, taking a look at how small business owners are utilizing subcontracting and teaming to achieve procurement success, are forthcoming.

The State of Women-Owned Businesses in the U.S. in 2013

With the support of American Express OPEN, Womenable has reported on trends in the growth and development of women-owned enterprises, drawing upon detailed information from the U.S. Census Bureau, since 2011.

In our inaugural report, The American Express OPEN State of Women-Owned Businesses Report: A Summary of Important Trends, 1997-2011, we provided up-to-date estimates on the number, employment and revenues of women-owned firms, and shared the insight that – despite above-average growth in the number of firms – women-owned businesses were not progressing up the business size continuum.
2013_State_of_WOBS_cover
Our 2012 report, The State of Women-Owned Businesses Report: A Summary of Important Trends, 1997-2012, again provided up-to-date estimates of the number and growth of women-owned firms, and took a more detailed look at the economic clout of women-owned firms regionally and within industry – finding that women-owned firms in two industries (construction and transportation) were standing toe-to-toe with their industry peers with respect to the share generating $500,000+ in revenues.

With our most recent installment in the series, The 2013 State of Women-Owned Businesses Report: A Summary of Important Trends, 1997-2013, we again provide women business owners and their associations, supporters of women’s business development and other stakeholders with the most comprehensive review and analysis of the current health and well-being of women-owned firms in the United States – as well as in all 50 states and the 25 most populous metropolitan areas. Further, the report expands its focus this year to look at the phenomenal growth of firms owned by women of color.

Among this year’s key findings are:

  • As of 2013, it is estimated that there are over 8.6 million women-owned businesses in the United States, generating over $1.3 trillion in revenues and employing nearly 7.8 million people. The growth in the number, revenues and employment of women-owned firms over the past 16 years exceeds the growth rates of all but the very largest, publicly-traded corporations in the country;
  • Indeed, when looking specifically at the 2007-2013 period – since just before the start of the recent recession – the net increase of 5.3 million jobs economy-wide has come almost entirely from very large public corporations … AND women-owned firms. During the past six years, employment in women-owned and equally-owned firms has fallen;
  • The states in which growth in the number, employment and revenues of women-owned firms has been the strongest since 1997 are the District of Columbia, North Dakota, Nevada, Wyoming and Georgia. San Antonio TX, Portland OR, Houston TX, Riverside CA, and Washington DC/MD/VA are the fastest-growing metro areas for women-owned businesses;
  • In 1997, there were just under 1 million (929,445) firms owned by women of color, accounting for one in six (17%) women-owned firms. That number has skyrocketed to an estimated 2,677,700 as of 2013, and now comprises one in three (31%) women-owned firms;
  • While firms owned by women of color are smaller than non-minority women-owned businesses both in terms of average employment and revenues, their growth in number and economic clout is generally far outpacing that of all women-owned firms. Indeed, the growth in the number of African American (up 258% from 1997 to 2013), Asian American (+156%), Latina (+180%), Native American/ Alaska Native (108%), and Native Hawaiian/Pacific Islander (+216%) women-owned firms all top the growth in the number of non-minority women-owned firms (+32%) over the past 16 years.

You may download and read the complete 71-page report by visiting openforum.com/womensbusinessreport or clicking on the link above. You may also wish to download and read the news release for the report.

Many Successful Women-Owned Businesses are Growing “Under the Radar”

There’s a new report just out that kicks off 2013 with some great news: women-owned firms at the highest level of revenue achievement have been doing even better than we might have imagined. They’ve been growing in number right under our very noses. In fact, the number of women-owned firms with $10 million or more in revenue has increased by 57% over the past decade – a rate fully 47% faster than the growth of all $10M+ businesses, and nearly twice (+98%) the rate of growth of all women-owned firms.woman_icecliff copy

These startling new facts are from Growing Under the Radar: An Exploration of the Achievements of Million-Dollar Women-Owned Firms, a new report authored by Womenable and commissioned by American Express OPEN.

How could this have been happening, largely undetected, under our very noses? Well, the “million dollar bucket” is a diverse one – containing both relatively small $1 million privately-held firms and multi-billion dollar publicly traded corporations. And, since this population contains just 2% of women-owned firms and 5% of all firms, it’s the largest sales category published by the Census Bureau. Now, for the first time, Womenable was able to obtain previously unpublished data from our friends at the Economic Statistics Branch of the Census Bureau (mwah!) – and the information is gratifying:

  • Between 2002 and 2012, the number of majority women-owned firms with $10 million or more in revenues increased from 8,110 to 12,700 – a 56.6% increase. During that same time period, the number of women-owned firms with $1 million or more in revenues grew from 116,985 to 152,900 – a 30.7% increase. Thus, the growth in the number of $10M+ women-owned firms exceeds the growth of all $1M+ women-owned firms by 84%.
  • Comparing growth rates among the firms of highest achievement finds women-owned firms again surpassing average growth by a large margin. The growth in the number of $10M+ women-owned firms (56.6%) surpasses the growth in the number of all $10M+ businesses (38.4%) by fully 47%.
  • The share of firms reaching this rarified atmosphere remains small. Within the population of million-dollar firms, 75% have $1-$4.9 million, 12% have $5-$9.9 million, and 13% have $10 million or more in revenues. Among million-dollar women-owned firms, 82% have $1-4.9M, 10% have $5-9.9M, and 8% have $10M+ in revenues.
  • Some industries are more scalable than others. Looking within the population of million-dollar women-owned firms finds that women-owned firms in wholesale trade have achieved the highest level of firm revenues. Fully 20% of the million-dollar women-owned firms in this industry have topped the $10 million mark, well above the 8% seen among all million-dollar women-owned firms. Women-owned firms in three other industries have also exceeded the 8% national average: finance and insurance, in which 12% of million-dollar women-owned firms have achieved $10M+ in revenues; transportation/warehousing, in which 11% have passed the $10M mark; and arts/entertainment/recreation, in which 10% have done the same.

And, perhaps most importantly, why has this been happening? In our view, growth at the upper reaches of business achievement is not only a logical next step in the continued overall growth at rates exceeding the national average, there is now much more support for these mountain-climbing women – such as The Committee of 200 and the Women Presidents’ Organization. Higher achieving women are now getting more visibility and recognition. While it’s still not always good (strong, successful women still referred to in less-than-flattering, rhymes-with-witch terms), greater visibility provides more role models for young women, more of whom may be dreaming bigger because of the achievements of these high-flying women.

The news coverage of this exciting new report was kicked off late last week by an article in Meghan Casserly’s Girl Friday column for ForbesWoman, “Women In (Big) Business: How XX-Driven $10 Million Plus Firms Could Take The Lead.” More are sure to follow, as we’ve been chatting with a number of reporters.

In the meantime, fellow womenablers, read the report, applaud our achievements, and start spreading the news!

Womenable Testifies at U.S. Senate Hearing

Womenable President and CEO Julie R. Weeks testified at a recent hearing of the Senate Committee on Small Business and Entrepreneurship, entitled “Creating Jobs and Growing the Economy: Legislative Proposals to Strengthen the Entrepreneurial Ecosystem.” Weeks was one of eight witnesses invited to address the committee. Other witnesses included officials from the U.S. Small Business Administration, a representative from the National Federation of Independent Business chapter in Maine, an official from the Granite State Economic Development Corporation, and business owners. Weeks spoke as an expert in women’s enterprise development, and as chair of the Association of Women’s Business Centers.JulieWeekstestimony_sm

The hearing, held on November 29th, focused on actions that the Committee could take now and early in the next Congress to spur small business growth and job creation. Weeks’ testimony, which can be downloaded and read in its entirety HERE (PDF file with active source links) or HERE (HTML on the SBC website), offered three specific policy recommendations:

  • Federal Procurement and WOSBs: Eliminate the monetary cap which is currently limiting the procurement opportunities that can be directed toward women-owned small businesses, and enable agency procurement officials to restrict competition for WOSBs;
  • Women’s Business Centers: Ensure that the SBA, when measuring and analyzing the performance of the WBC program, includes all of the support provided by WBCs, not just one-on-one counseling; and
  • The Census Bureau’s SBO Program: Ensure the continued funding of the quinquennial Survey of Business Owners program, and direct the Census Bureau to investigate growth continuum issues such as the emergence of “women-led” firms, and the feasibility of determining the gender ownership status of non-profit businesses.

The hearing was also significant in that it was the last Senate Small Business Committee hearing to be co-lead by retiring Senator Olympia Snowe – who has been a champion not only of small business development in general but of women’s enterprise development in particular during her storied 35-year Congressional career. Weeks concluded her testimony with a tribute to Snowe, saying,Weeks_Snowe_sm

“Finally, if I might be so presumptuous to speak on behalf of the entire women’s enterprise development community, I would like to recognize that, ever since she came to the U.S. Congress in 1978, Senator Olympia Snowe has been a vocal supporter and forceful advocate for women’s entrepreneurship issues without equal in the U.S. Congress. Her support and thought leadership on behalf of the women’s business center program, on federal procurement issues, on SBA entrepreneurial development coordination and impact evaluation, on the National Women’s Business Council; her inclusiveness in calling advocates to the table to discuss challenges and solutions; and the collegial way she has led the Senate Committee on Small Business and Entrepreneurship as both Chair and Ranking Member is unparalleled and is a shining example of the best in national politics and policymaking. Her voice and leadership will be sorely missed by all of us.”

All in attendance gave Senator Snowe a standing ovation near the start of the hearing.

A press release issued by the Committee can be read HERE, and video from the 2+ hour hearing can be viewed on the Senate SBC video archive or on C-SPAN.org. (Weeks was the last of the panelists to testify.)

Progress for Women in Federal Procurement? Not So Much …

As we womenablers know, after a very long battle, a  Women-Owned Small Business Procurement program was launched by the US Small Business Administration in February 2011. How’s that program faring nearly 18 months later? Well…

First of all, there’s been no official commentary or updates from the SBA since the program was launched. Secondly, a recent analysis in an article on Bloomberg.com finds that just $21 million has been awarded through the new program – less than the cost of one unmanned drone. WIPP Lobbyist Ann Sullivan, quoted in the article, puts it well:

“We worked for 11 years to try and get this thing in place. Is the program working? Well, looking at those numbers, the answer is no, it’s not working.”

OK, womenablers, time to put the pressure on the SBA – and on all federal agency purchasing offices – to start utilizing this program!

For advocacy fodder, you might want to download and read these two reports looking at the performance of women-owned firms in the federal contracting arena:

These research reports show that once women-owned firms start winning federal contracts, their success and business size matches their male peers – proving they are up to the task and that access to government markets can level the playing field of business achievement.

Navigating the Federal Procurement Maze Pays Off for Many Women Entrepreneurs

Accessing new markets is an important avenue for business growth for all businesses, large and small. For many women business owners, federal agencies provide an excellent opportunity for market expansion and business growth. As many are aware, the U.S. government is the world’s largest single purchaser of goods and services, spending just over $535 billion in external contracts in fiscal year 2011. And with a 5% federal spending goal for agency spending with women-owned firms, and a newly-implemented Women-Owned Small Business Procurement Program, federal procurement is a market ripe for expansion by growth-oriented women entrepreneurs.

recent survey conducted among women and men small business owners who are active federal contractors1 shows that women-owned firms that are active in federal contracting have achieved the same level of business and procurement success as their male peers A new report from this second annual survey, Women and Minority Small Business Contractors: Divergent Paths to Equal Success, focuses on key trends among women- and minority-owned firms in federal contracting. This report, published by American Express OPEN’s Victory in Procurement (VIP) program, finds that while business and procurement achievements do not vary by gender, procurement strategies do vary, as do success rates.

Notable survey findings include:

  • Women-owned active contractors have achieved the same level of procurement and business success as all active small contractors. Over one-third (35%) of women active contractors have received $1 million or more in federal contracts to date, statistically identical to the 38% of all active contractors who have reached the same level of procurement success. In addition, 19% of women contractors employ 50 or more workers and 42% have $1 million or more in annual revenues, virtually the same as the 18% and 47% seen among all active small business contractors.
  • Investments made in seeking contract opportunities have risen over the past year, but remain lower for women. On average, active contractors invested $103,827 in staff and financial resources seeking federal contracting opportunities during 2010. During that same period, women contractors spent 17% less —a total of $86,643. Both generally and among women, however, procurement investments are up this year over last — 23% among women and 21% overall.
  • Women business owners are more likely than average to have obtained a special designation or certification. Over eight in 10 (82%) of women-owned firms have one or more of these designations, compared to 70% of all active contractors. The most helpful certifications for women are getting on the GSA Schedule (24% are on the schedule, 41% of them have found it very or extremely useful) or taking advantage of veteran or disabled veteran status (less than 10% of women-owned firms have these designations, but nearly 40% of those who do have found it to be very or extremely useful to them).
  • Bidding activity and contracting success rates have declined, more so for women than the average small business contractor. Comparing the most recent three-year contracting period (2008-10) with the previous period (2007-09) finds that the number of prime contract bids and participation in bids as a subcontractor are down: 47% for prime contracts and 48% for subcontracts. Among women-owned firms, there has been a 55% decline in prime contract bids and a 30% decline in subcontracting participation. Success rates have also declined: down 8% among all firms and 17% among women for prime contract wins, and -27% and -34%, respectively, for subcontract wins.

Finally, it’s interesting to note that women business owners do not yet find the women-owned firm designation to be very helpful to them in obtaining federal government contracts. However, as this survey was taken, the WOSB Procurement Program was just getting underway. Tracking the improvements that program will have on the number and value of federal contracts going to women-owned firms will be f great interest to the women business owner community.

This report is the second in a series of four reports that will be published from the second annual survey among active small business federal contractors. The first, Trends in Federal Contracting for Small Businesses, focused on the overall situation for small firms in the federal marketplace today as well as key trends seen over the past year. Other upcoming reports will focus on how strategies and outcomes change with level of procurement experience, and what lessons can be shared from firms that focus on subcontracting as a procurement strategy. To download and read the entire 11-page report click here, and to learn more about American Express OPEN’s VIP program, visit www.openforum.com/governmentcontracting.

A separate Womenable-authored blogpost focusing on the findings from the perspective of minority-owned businesses can be found on OPENforum.com.

1 An active contractor is defined as a business that is registered on the Central Contractor Registry to do business with federal agencies and is either currently performing on a federal contract or has performed on a contract within the past five years.