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Women-Owned Small Businesses: A Look Behind The Numbers

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The Saturday after Thanksgiving, dubbed Small Business Saturday, is not just a day to patronize the shops on Main Street. It also serves to recognize the impact small businesses have on our economy. Just as Small Business Saturday sales rise each year, so do the number of women entrepreneurs. How are women-owned businesses boosting the economy? Let's take a deeper look.

What is Small Business Saturday?

Started by American Express in 2010, Small Business Saturday is sandwiched between Black Friday and Cyber Monday. Over its short existence, it has brought real, tangible benefits to small businesses. Small Business Saturday shoppers have increased from 73.9 million in 2012 to 112 million last year. Sales have nearly tripled, rising from $5.5 billion to $15.4 billion in that same five-year period. In fact, nearly 23 percent of all adults in the U.S. now do some sort of local shopping on Small Business Saturday.

It's interesting to note that nearly a third of small businesses are owned by women. The U.S. Census Bureau defines a woman-owned business as any business in which a female owns 51 percent or more of the equity, interest or stock. Women-owned businesses began to increase a decade ago, jumping 27.5 percent between 2007 and 2012 -- and they've continued to increase. That's a lot of companies where the "boss man" is actually a woman!

Who Owns the Businesses?

While Small Business Saturday is aimed primarily at really small companies -- under 150 employees -- the U.S. Small Business Administration defines a small business as having under 500 workers. That's quite a difference, but it's important to note that the number of women-owned companies has increased across the board. Female-owned businesses have never been opened at this rate nor have they contributed jobs and money to the economy in these numbers. In 2015, women owned more than 9.4 million companies and were responsible for employing 7.9 million workers. Plus, female-owned companies brought in more than $1.5 trillion in sales as of 2015.

What's even more impressive are the numbers of minority women who are opening their own companies. Roughly 3 million U.S. firms are majority-owned by women of color, and these companies alone bring in $226 billion each year, based on data from the 2012 U.S. Census (the last year stats are available). This breaks down to:

  • More than 1.5 million African-American women own businesses. That rate flew up 67.5 percent between 2007 and 2012.
  • Nearly 1.5 million Hispanic women are business owners, a jump of 87.3 percent in the same period.
  • About 750,000 Asian women started businesses in 2012, an increase of 44.3 percent since 2007.


Business owned by female veterans also tripled in the same period. Women now account for about 15 percent of all veteran-owned businesses.

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  • Why Are More Women Becoming Business Owners?

    Women are opening businesses at a faster rate than the national average. In the years between 1997 and 2014 (the last year reliable stats were compiled), companies with women at the helm grew 1.5 times faster, and that includes the recession of 2008 that knocked a lot of smaller firms offline.

    So why this increase in women-owned companies? First, programs to assist women in starting their own companies have grown. Some states and many private nonprofits offer funding or grants. The Small Business Administration has  made it a higher priority to create and distribute information about funding sources that can help female entrepreneurs. And there are more resources through community college courses, online guides and mentor programs that help women start and grow their businesses.

    Nearly 9 in 10 businesses women-owned businesses are sole proprietorships, but for many women, starting their own business and being financially self-sufficient is preferable and practical. Women entrepreneurs can circumvent the long climb up the corporate ladder. If they're parents or caregivers for a family member, they can be more flexible. This sense of power, or of being in charge of their own destinies, appeals to many women.

    Internet tools for businesses have also increased dramatically in the past 20 years, going from nearly none to hundreds of thousands in the U.S. Running an eCommerce store or managing a physical business using digital tools for scheduling and advertising are infinitely easier than they were, and women are able to create significant income streams running their businesses alone.

    We also see millennials growing up and wanting to do things their way. From creating sustainable business models to offering flexible employee benefits, millennial entrepreneurs are striving to create a positive work-life balance for themselves and their employees. They also see opening their own businesses as a good option because they have more women entrepreneur role models than any past generation.

    Do Women Have Increasing Opportunities in Small Businesses?

    Opportunities for women entrepreneurs don't show signs of stopping. Historically low interest rates mean it's easier for women to borrow money to start and grow businesses, and though the Federal Reserve is likely to hike rates a bit late this year or early next, the ability to borrow is still good for many women-owned businesses.

    More women are getting the training they need to start and run businesses. These days, a significantly higher percentage of women are earning bachelor's degrees than their male counterparts. For example, 64 percent of African-American students, 60 percent of Hispanics and 56 percent of whites earning degrees in 2014 were women.

    There is a growing number of women leading the way in business. Younger women see these role models and believe they can follow in those footsteps.

    What to learn more about small businesses? Check out these 10 things you should know ahead of Small Business Saturday.


    Posted: November 20, 2017