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.
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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.

Economic Impact of Women-Owned Firms Growing Across the U.S.

As noted in the recent 2016 State of Women-Owned Businesses Report – and in our previous blogpost – women-owned firms are continuing to grow in number and economic clout at rates well above the national average. But where, geographically speaking, are women-owned firms growing? The short answer is: everywhere!

When looking at the growth in the number of women-owned firms as well as growth in revenue and employment (which we call, collectively, growth in economic clout), the 10 fastest-growing states for women-owned firms between 2007 and 2016 are:

  • North Dakota, South Dakota, Texas (all three tied for first)
  • Iowa
  • Indiana, Wyoming (tied for 5th)
  • Georgia, Tennessee (tied for 7th)
  • Utah
  • Maine

These are states in the Northeast, Midwest, South and West.

A look at the top-ranked metropolitan areas for growth in the economic clout of women-owned between 2007 and 2016 paints a slightly different picture. All of the top ten metro areas (listed below) are found east of the Mississippi River – or in Texas! However, most of the 50 most populous metropolitan areas in the country are either east of or on the banks of the Mississippi River.

  • Charlotte NC/SC
  • San Antonio TX
  • Dallas TX
  • Memphis TN/MS/AR
  • Austin TX
  • Indianapolis IN
  • Miami FL
  • Detroit MI
  • Richmond VA
  • Houston TX

Comparing heat maps of the top states and top metro areas for growth in economic clout since 2007 finds that some of the fastest-growing states are those without large cities (such as North and South Dakota, Iowa and Wyoming) and some of the fastest-growing cities (Charlotte, Miami, Detroit) are growing faster than the rest of their states.

This geographic analysis also tells us that things are definitely hopping in Texas – the top-ranked state home to four of the top 10 metro areas. Perhaps everything really is bigger in Texas!

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.

Three Hidden Gems From the 2012 SBO

Happy International Women’s Day, fellow womenablers. Yesterday, at the National Women’s Business Council’s public meeting, Council member Teresa Nelson and I discussed the Council’s just-released analysis of the 2012 women’s business census, The Growth and Development of Women-Owned Enterprises in the United States, 2002-2012.

By now, many of you will know the overarching facts and trends, including:

  • Women now own nearly four in ten (36%) businesses in the U.S. These firms number nearly 10 million, employ over 8 million workers, and generate $1.4 trillion in revenues.
  • Women-owned firms are growing in number at 2-1/2 times the national average over the 2002-2012 period, and business starts among women have picked up significantly since the recession, even as overall firm formation has stagnated.
  • The number of firms owned by women of color is nothing short of phenomenal. In 2002, there were just under 1 million firms owned by women of color; that number stands at nearly 3.8 million just one decade later.

But what you might not know are three other trends that are included in this report. For the first time, the analysis includes a look at female veteran-owned firms, trends in the top 50 most populous metro areas, and a look at trends in some detailed industry categories. We found that:

  • There’s been a quadrupling in the number of female veteran-owned businesses just in the past five years, from under 100,000 to nearly 400,000.
  • Despite growing industry diversity, nearly one-third of women-owned firms can be found in these four sectors:
    • Personal care services (mostly beauty and nail salons): 987,375 women-owned firms
    • Other personal services (including pet care/pet sitting/dog walking): 732,352
    • Child day care services: 661,630
    • Services to buildings and dwellings (mostly janitorial, housecleaning and landscaping/lawn services): 655,943
  • Between 2002 and 2012, the number of women-owned firms in Memphis skyrocketed by 160%, compared to national growth of 52%, making the Bluff City the fastest-growing metro area among the 50 most populous cities in the U.S.

These trends and more can be found in the new NWBC report, The Growth and Development of Women-Owned Enterprises in the United States, 2002-2012.

Whither Women-Owned Firms in the US? New Census Data Shed Some Light

It’s the news we womenablers have been waiting for anxiously for some time now – the release of the most recent statistics (albeit from 2007) on the number, economic clout, and growth of women-owned enterprises. The latest facts were released today by the US Census Bureau, and this is what they show:

  • As of 2007, there were 7.8 million majority-owned, privately held women-owned firms in the US, a 20.1% increase over the previous census (in 2002);
  • These firms generated $1.2 trillion in revenues, a 27.5% increase from 2002 levels; and
  • Women-owned firms employed 7.6 million workers, up 7% from 2002.

So, overall, the trends we’ve witnessed over the past decade or more remain the same: increasing numbers, and increased economic clout. These numbers also indicate a slowing in employment growth – among women-owned firms and overall, as the economy slowed down in advance of our most recent recession.

OK, it’s great to have these new numbers, but how about a little context? First of all, let’s take a look at the relative growth of women-owned firms compared to their male-owned counterparts. During the 2002 to 2007 Census period, the number of women-owned firms grew by 20.1%, compared to a 5.5% increase among majority-owned, privately held men-owned firms. As a result, the share of women-owned firms in the business population has been steadily increasing, from 26% in 1997 to 28% in 2002 to 29% as of 2007.

Secondly, the economic contributions of women-owned firms has been increasing as well, at a rate greater than that of their increase in numbers – at least in terms of revenues generated. While the growth in the number of women-owned firms is up 20% over the past five years, revenues generated by those firms is up 28% over the same time period.

There’s a downside, though, and that is that women-owned firms, on average, continue to employ fewer people and generate lower revenues compared to their male counterparts. To wit:

  • The vast majority (88%) of women-owned firms do not employ anyone other than the owner of the firm. While the same is the case for men-owned firms, a lower share of them (77%) are non-employer firms. The average revenues of non-employer women-owned firms are $26,490 – half that of the $53,329 seen among non-employer men-owned firms;
  • Among employer firms (12% of women-owned firms and 23% of men-owned firms), the story is much the same: average revenues of women-owned employer firms are half those generated by their male counterparts – $1.1 million compared to $2.5 million.

There’s more to be learned by perusing these latest statistics, even though the more detailed publication will not be released until December of this year. womenable will be taking a deeper dive and will be reporting out additional insights. In the meantime, our advice is to use these “most recent” statistics in place of whatever other estimates you may currently be using. While the data date is 2007 (as opposed to more recent estimates as of 2008), these are rock solid and actually higher than the 2008 estimates:

  • Number of Firms: 2007 actual 7.8 million; 2008 estimate, 7.2 million
  • Sales: 2007 actual, $1.2 trillion; 2008 estimate, $1.1 trillion
  • Employment: 2007 actual, 7.6 million; 2008 estimate, 7.3 million

To learn more about this impactful new womenabling information, click on the following links for the Census Bureau’s news release, links to all of the newly-released data, or the page with a summary of the women-owned firm findings.