A trio of reports sheds light on the state of women-led small businesses
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A trio of reports sheds light on the state of women-led small businesses

For National Women’s Small Business Month, we look at a trio of new studies with some enlightening findings about U.S. female entrepreneurs – their outlook, their impact and their challenges.

First up is the 2019 Bank of America Women Business Owner Spotlight, which sheds light on the experiences of female entrepreneurs in the United States.

Women small business owners are poised to end 2019 on a high note, the Bank of America report said, with 84 percent anticipating year-over-year revenue growth Future revenue projections and expansion plans have reached four-year highs, and are stronger among women entrepreneurs than their male counterparts. However, women continue to report barriers concerning access to capital and pay equality.

“Women business owners see a bright future for their businesses, yet there is still more work to be done as many say work-life balance, access to capital, and pay equality remain issues,” said Sharon Miller, head of Small Business of Bank of America.


Still, women business owners’ outlook remains strong. The annual study of more than 1,000 entrepreneurs around the country also reveals that:

  • Heading into 2020, 73 percent plan to expand (vs. 66 percent of male business owners, and up from 67 percent in 2018).
  • 62 percent expect their revenue will increase next year (vs. 55 percent of male business owners, and up from 58 percent in 2018).
  • 25 percent plan to hire (vs. 23 percent of male business owners, and up from 21 percent in 2018).
  • 12 percent intend to apply for a loan (vs. 11 percent of male business owners, and steady from 13 percent in 2018).

Yet, 58% of the more than 500 female small business owners surveyed say they don’t have the same access to capital that men have, although that is down from 84% in last year’s report. About 24 percent expressed doubt women will ever have equal access to capital.

Miller told Business Insider that study finding is disappointing, and she’d like to see women approach banks earlier in the process. “Women in general think they have to have it all right before they come in,” she said.


The recently released American Express 2019 State of Women-Owned Businesses Report  found the number of female-owned businesses has grown 21 percent between 2014 and 2019, and employment by them rose 8 percent.

Women-owned businesses continue to fuel the economy and now represent 42% of all businesses — nearly 13 million — employing 9.4 million workers and generating revenue of $1.9 trillion. According to the report, in 2019, these U.S. women with diverse ethnic and geographic backgrounds started an average of 1,817 new businesses per day in the U.S. between 2018 and 2019, down only slightly from the record-setting 2018 number of 1,821.

Indeed, the report found that the number of businesses owned by women of color grew 43 percent, and black women saw the largest growth rate at 50 percent.

The annual report, based on U.S. Census Bureau data adjusted by Gross Domestic Product data, found that women-owned businesses continue to trend above all businesses. Over the past five years:

  • The number of women-owned businesses increased 21%, while all businesses increased only 9%.
  • Total employment by women-owned businesses rose 8%, while for all businesses the increase was far lower at 1.8%.
  • Total revenue for women-owned businesses also rose slightly above all businesses: 21% compared to 20% respectively.

“The face of entrepreneurship is evolving to include all women, regardless of demographics. Even more impressive is that women are starting businesses on their own terms – whether it be their full-time focus or a part time activity,” said Courtney Kelso, Senior Vice President of American Express. “The economic impact of women-owned businesses is undeniable, from the trillions they contribute via revenue to the millions of jobs they provide.”

Women of color represent 39% of the total female population in the U.S. but account for 89% of the net new women-owned businesses per day (1,625) over the past year. While the number of women-owned businesses grew 21% from 2014 to 2019, firms owned by women of color grew 43% and African American women-owned firms grew even faster at 50%.

As of 2019, women of color account for 50% of all women-owned businesses. An estimated 6.4 million women of color-owned businesses employ nearly 2.4 million people and generate $422.5 billion in revenue. But, even as new minority-owned businesses are opening, the revenue disparity is increasing. In 2014, minority-owned businesses averaged $67,800 in revenue; by 2019 the average had dropped to $65,800, a decline of 3%.

African American women-owned businesses represented the highest rate of growth of any group in the number of firms between 2014 and 2019 as well as between 2018 and 2019. They started 42% of net new women-owned businesses, which is three times their share of the female population (14%).

Florida ranks No. 3 for overall women-led small business growth, the report found.


Meanwhile, a third study looks at women-led companies seeking venture capital, and leaves us with an uplifting finding: Startups with at least one female founder raised 21% more in venture capital funding than companies with all-male teams.

That’s a finding of a recent study by the Kauffman Fellows Research Center. The analysis used data from market researcher Crunchbase of more than 90,000 U.S. venture-backed companies from 2001 through 2018.

The Kauffman center also found that, at the seed stage, mixed-gender teams raise about the same amount of money as those without women, but in later stages the female advantage grows.  In the third- and fourth-round raises, companies with at least one female founder get on average $23 million in VC investment, compared with $18 million on average for all-male teams.

Still, the study found, only 22% of all startups are founded by at least one women. Findings include that the percentage of women-founded companies has grown from a low of 4% in 2001 to 21.6% in 2018.

“Hopefully when people start looking at this data, they start saying, ‘Well shoot, me and my two buddies from Stanford should maybe go and do some outreach and make sure that we bring someone on that has a unique point of view, because we don’t,” Collin West, co-founding partner of the Kauffman Fellows Fund and one of the authors of the report, told Bloomberg.

The National Women’s Business Council is collaborating with federal lawmakers to address the issue, by creating an angel investor tax credit that would serve as an incentive for investment in women-led companies, according to Forbes.

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