Posted by Sung Yoo – In October 2010, the U.S. Department of Commerce and the Economic & Statistics Administration prepared a report for the White House Council for Women and Girls. The report examined disparities in the characteristics of businesses owned by women as compared to those owned by men, and focused exclusively on proprietorships, partnerships, or any type of privately-held corporation with one or more owners. Exactly the demographics of NASE Members! Highlights:
- In 2007, 7.8 million firms were owned by women, accounting for 30% of all non-farm, privately-held firms in the U.S. Women-owned firms had sales/receipts of a whopping $1.2 trillion and had 7.6 million paid employees.
- Between 1997 and 2007, the number of women-owned businesses grew by 44%, twice as fast as men-owned firms. Women-owned firms also added roughly 500,000 jobs while other privately-held firms lost jobs. Why? Because women-owned firms were more likely to be located in industry-sectors that experienced high employment growth, such as health care and education services.
- Between 1997 and 2002, the number of businesses owned by minority women increased faster than those owned by non-minority women.
- Women-owned businesses are typically smaller than men-owned businesses. Although women own 30% of privately-held businesses, these businesses account for only 11% of sales and 13% of employment among privately-held companies. The average sales/receipts for women-owned businesses are only 25% of average sales/receipts for men-owned businesses. Women-owned businesses are also concentrated in industry sectors where firms are typically smaller.
- Women start with less capital than men and are less likely to take on additional debt to expand their businesses. They are more likely than men to indicate that they do not need any financing to start their business. The report was inconclusive as to whether this meant women are less willing to take risks, or whether they face less favorable loan conditions.
- Self-employed women have similar characteristics to self-employed men. However, compared to the non-self-employed, self-employed women are older, more likely to be married, and less likely to have children at home.
- The annual earnings ratio between self-employed women and men is 55%, well below the ratio between non-self-employed women and men.
The report went on to conclude that though women-owned businesses have grown rapidly in the past decade, there are still stark differences between women-owned and men-owned businesses that need to be addressed. Women-owned businesses continue to start smaller, have lower survival rates, do not grow as fast as, and have lower levels of revenue and employment than men-owned businesses. Furthermore, the earnings of female business owners are much less than those of male business owners.
The Council encouraged steps to foster the development of more women-owned businesses and to encourage women to consider self-employment. In particular, it recommended more effort should be given to increase networking, mentoring, and information available to women so that they can more accurately access the risks and opportunities of self-employment and make effective decisions about financing and managing companies.
NASE Member demographics based on self-reported gender during member registration indicate that 64% of NASE Members are male while 34% are female. Two percent of members did not select their gender. These stats appear to be in sync with the Council's findings, and we are curious to know even more about you.
Please do not hesitate to contact us here at the NASE about ways we can offer more personalized services for women-owned businesses. We understand that all businesses face varying challenges, and we want to be as valuable for you as possible. Feel free to comment below, or reach out to us via Twitter or Facebook. We look forward to hearing from you!