Women are making inroads in business, both in America and around the world. Slowly but surely, more women are starting businesses, leading them, and funding them. Women in business statistics show a lot of progress. Women in business have had a major impact on the world economy.
That is not to say the gender divide is a thing of the past. Women face substantial challenges in starting and leading businesses. Despite the progress women have made in the past 75 years, severe disparities and inequalities exist in nearly all markets.
The number of women in the US who own companies has grown steadily for nearly half a century.
In 2019, JPMorgan Chase and Co. analyzed data from 1.3 million American companies to compile Gender, Age, and Small Business Financial Outcomes, a report that provides unique insights into American small-business survival, cash liquidity, and revenues.
That’s right, women own almost half of the businesses in Ghana, ranking higher than Russia (34.6%) and Uganda (33.8%).
You might expect forward-thinking liberal democracies to have a higher percentage of women-owned businesses, but the United States, for example, ranks 23rd with 25.5% of its businesses owned by women.
Data suggests that the Ghana-based successful businesswoman is driven to start a company by necessity, not ambition. A high percentage of women-owned businesses can be a sign of more opportunities in the developed world, but in disadvantaged economies it could simply reflect a will to survive that prevails against the same barriers to entrepreneurship that women face elsewhere.
Ghana is not an isolated case. High rates of female entrepreneurship prevail in some of the world’s least wealthy underdeveloped economies. Clearly, women’s entrepreneurial progress is not always aligned to the country’s economic wealth.
Developing nations are characterized by weaker infrastructure support for small business, lower education rates, and less skilled labor. But women are undeterred as they are inspired to start businesses to support themselves and their families.
Business owners among women make up less than 10% of the entrepreneurial world in the Middle East. That’s the widest gender gap in the world.
About 29% of women-owned businesses in the Middle East and North Africa are considered international, surpassing the rate for male-owned companies. More than 75% of women-owned businesses in the United Arab Emirates are considered global. In Saudi Arabia, the rate is 50%.
Female entrepreneurs from this part of the world are more optimistic about expanding their operations than women from other parts of the world. According to the Mastercard Index, more than 50% of women who run their own companies in the United Arab Emirates and Tunisia say they are likely to bring on six or more new employees to the team in the next five years. In Saudi Arabia, growing one’s business has become an ambition more common for women than men.
From 1997 to 2017, the number of firms owned by women grew by 467%.
Over the past 20 years, businesses owned by African-American women have increased by 259 per day. Latina-owned firms increased by 227 per day. Asian-American women-led businesses rose by 104 daily, Native American/Alaska Native companies increased by 15, and Native Hawaiian/Pacific Islander by four.
That said, the annual growth rate of successful women in business over the last 20 years reveals signs of a slowdown. The growth rate was 3.9% between 1997 and 2017 (which includes the recession and recovery), as opposed to 2.7% between 2016 and 2017.
That’s a rise from 4.6% of all firms to 40%. This data demonstrates the growing impact women have on the economy and their communities, creating jobs and generating revenue.
These companies employ 16,155,900 workers, 14% of the workforce.
Women entrepreneurs statistics reveal that women-owned businesses grew from 29% of all companies in 2007 to 40% in just 11 years.
New businesses have grown by about 1.0% annually between 2007 and 2018. There was an uptick in the annual growth rate in 2018: 6% for women-owned firms and 1.6% for all firms.
These businesses have a tremendous impact on their communities and employ 8% of the total private-sector workforce.
The reason behind this surge, according to researchers, has more to do with the prolonged recession-recovery period than female empowerment or general mindset shifts regarding women in the workforce. Women of color have been forced to turn to entrepreneurship as a source of income. Starting in 2018, women of color account for 47% of women-owned businesses. They generate more than $386 billion in revenues each year and employ 2,230,600 people.
The percentage of women in the US currently amounts to 50.6. Among them, minority women are growing their businesses at breakneck speed. Native Hawaiian/Pacific Islander (146%), Asian American (105%), and Native American/Alaskan (76%) businesses grew more slowly than other businesses owned by women of color, but still faster than the average pace for women-owned businesses.
Still, women of color face a real and widening revenue gap. The average revenue for businesses owned by women of color is dropping: in 2007, the average revenue for a women-of-color owned business was $84,100; by 2018 it was $66,400. On the other hand, the success women in business achieve in more privileged demographic populations is on the rise. The monthly average revenue for a non-minority-owned business was $181,000; by 2018 it had risen to $212,300.
As many as 64% of new female-owned businesses are owned by women of color. In that period, there have been 541 new businesses opened every day by African-American women, 401 per day by Latina women, and 191 per day by Asian-American women.
How many businesses are owned by women? The 12.3 million businesses they currently own are the best proof of women harnessing their entrepreneurial spirit. Still, businesses owned by women are not evenly spread across the country, and some cities and states are ahead of others by a long shot. Also, men still have the upper hand at founding startups. The gender disparity is undeniable.
Statistics on small businesses underscore how women-owned businesses have multiplied over the last several years. A combination of necessity and opportunity entrepreneurship is behind the ambition to become a business owner.
Women’s business portfolio includes both opportunity entrepreneurs and necessity entrepreneurs.
According to small business revenue statistics, the number of $1 million revenue companies led by women soared by 46% over the past 10 years. Still, these women in business statistics refer to companies that are a mere 1.7% of all women-led companies. As the economy improves, more and more opportunity entrepreneurs enter the market, both male and female, creating a favourable environment for high-profit businesses.
In all of 2018 there were 12 unicorns born with at least one female founder. A unicorn company is a startup that is worth more than $1 billion. The first female-founded company to gain unicorn status in 2019 was FabFitFun. The company sells lifestyle subscription boxes to women.
Conventional wisdom suggests that starting a business is a young man’s game. The truth is that it takes most entrepreneurs years and years of professional experience to acquire the knowledge they need to start a business.
A generational breakdown from a recent American Express report reveals that it takes decades to amass the connections, expertise, and financial capital required to start a business. Women aged 25-44 are only 31% of female business owners.
In a study of more than 350 startups, Boston Consulting Group found that women-owned businesses are often a safer bet for investors and financial backers. The study reveals the literal price of prejudice.
This statistic counters the common perception that female entrepreneurs just dabble at lifestyle businesses as hobbies.
Women are relatively new to the business world and they continue to face unique challenges and barriers.
The economy has been improving at breakneck speed. Women entrepreneurs statistics indicate that businesses owned by women generate $3.1 trillion in annual revenue and that this success goes hand-in-hand with a political upheaval: the gradual bridging of the wage gap and a record number of women elected to state and national office in 2018.
Metal and machinery come third as the least popular industry for women, with 87% started by men.
On average, the small number of women-led startups in these industries achieved higher first-year revenues.
The US Small Business Administration reports that men and women are equally likely to feel optimistic about the way their businesses are performing, but omen are 21% less likely to feel “very” optimistic.
To uncover this fact, Silicon Valley Bank surveyed nearly 1,400 technology and healthcare founders and executives, mostly in big innovation hubs across the US, the UK, China, and Canada.
The number of women in the world amounts to 49.6% of the population, making for 3,825,573,117ish women. What percentage of women are employed at top positions at startup companies? That depends on many factors, but the situation has been improving with every passing year. This year’s 56% figure is a rise of 10% since last year.
That average includes business owners and executives from the US, the UK, China, and Canada. In 2017, only 46% of companies had women in executive positions, and in 2018 only 43%.
Tech companies and small businesses are typically managed by men, at least in Canada, China, and the US. Still, there is some evidence that more and more women are joining startup boards and taking leadership roles.
In other words, three out of four tech and healthcare startups are led by all-male teams. Startups with at least one woman on the founding team are more likely to have a female CEO or COO. In most cases, however, a woman is more likely to be head of HR or a similar department.
On average, 59% of startups have implemented some form of program that is intended to increase the number of women in leadership positions. There is a small difference depending on the composition of the founding team: If the team included a woman, 65% have a program, compared with 57% if the founding team was men only.
53% of startups with no women founders expect their next source of funding will be venture capital, compared to 46% with a woman founder.
Women make up a huge part of the workforce and occupy more leadership positions than ever before, but they face different dynamics and challenges.
The attitudes, hopes, and concerns women report in current surveys reflect real-life obstacles, including the additional difficulties women face when obtaining funding. SBA loans for women and specialized women small business grants help overcome these setbacks and ameliorate the circumstances women in business face every day.
Even the 9% figure has increased in the past few years as more women have started launching their own venture funds.
Another reason is explained in a 2018 study published in the Academy of Management Journal. The study found that the type of questions an investor asks a business owner (regardless of their sex) when deciding whether to invest or not influences the funding outcome. When VCs ask prevention-related questions, they are less likely to invest in a business than when asking promotion-related questions. According to the study, women raising funds are faced with far more prevention-focused questions than their male counterparts.
Obtaining big or small business loans for women is apparently a challenging feat. Despite the stability and steady growth a backer can expect from female-led businesses according to statistics, financial institutions hesitate to help out, especially in industries traditionally dominated by men.
Research suggests that not enough is being done to bridge this gap, and there’s a pretty good chance that women are treated differently based solely on their sex. Some efforts to tackle this issue include nearly 50 funds meant exclusively for women-owned businesses. The Wharton Social Impact Initiative, for example, is driving $1 billion to women-of-color tech entrepreneurs.
Whether they are starting a business, seeking funding, or trying to climb the ladder to the executive suite, women have come a long way.
Still, reputable studies confirm that there’s a long way to go. While women have a higher small business success rate, they tend to take fewer risks. The higher probability of the survival of female-led businesses makes them safer bets for investors, but the lack of female VCs means they don’t get the funding they need.
“I’ve never looked at the world like female versus male,” says Vista Endeavor Fund’s René Yang Stewart. “I treat every CEO as a person." Women in business statistics support this woman’s optimism, and perhaps it’s time the rest of the world catches up.
Your email address will not be published.