Women-owned businesses bring diverse perspectives and innovation to our society and economy. Yet, women did not always have the privilege to start or operate a business as they do today. Women now have more equitable access to educational and career opportunities, which gives them a greater chance of successfully owning and operating a business. Although women-owned businesses continue to grow and support millions of employees, boundaries still prevent them from having the same opportunities as their male peers. Gaining funding and earning investor trust are just two examples of the inequities that women in business continue to face.
How Women-Owned Businesses are Making the Economy Better
A New York Times article in 1984 reported that 2.5 million businesses were owned by women. In 2019, nearly 13 million of all U.S. businesses were women-owned. That number has grown since, especially after the COVID-19 Pandemic. Female-led businesses help drive our economy forward and create jobs. In 2019, the American Express State of Women-Owned Businesses Report found that employment at women-owned businesses grew by 8%, while total job growth for all businesses was only 2%. When women-owned businesses thrive, so does our society.
As work trends shift towards side hustles and the gig economy, so does female entrepreneurship. Over the last five years, growth in the number of women starting business as a side hustle has grown at a rate that is nearly twice as fast as the overall growth in female entrepreneurship: 39% compared to 21%, respectively. Minority women are responsible for a large portion of that growth from 2014-2019 where we see side hustles among minority women-owned businesses two times higher than all businesses at 65% vs. 32%.
Challenges Women Entrepreneurs Face
Most female business owners who have attended networking events can relate to this scenario: You walk into a crowded seminar and can count the number of women there on one hand. When women entrepreneurs talk business with primarily male executives, it can be unnerving.
Not all startup founders look for investors to help get their businesses off the ground, but those who do know how difficult the pitching process can be. Raising capital is even more difficult for women-owned businesses. At one time or another, most women CEOs find themselves in a male-dominated industry or workplace that does not want to acknowledge their leadership role.
The communal, consensus-building qualities encouraged in young girls can leave women unintentionally downplaying their own worth. Parent entrepreneurs have dual responsibilities to their businesses and to their families; finding ways to devote time to both is key to achieving that elusive work-life balance.
Women-owned businesses are still in the minority, and the hurdles faced by women who have embraced entrepreneurship are vast and often very different from those experienced by their male counterparts. Even though there are so many challenges to conquer, women-led businesses are thriving at a steady rate, and they’re impacting the global economy in an incredibly positive way.