Women will lead the way in economic growth – if their recent track record as bosses is an indicator.
Consider these statistics covering the past five years for women-owned businesses:
• Their overall number increased 21% to more than 12,943,000 compared with 9% for all businesses.
• The number they employed rose 8% to 9.4 million compared with 1.8% for all businesses.
• Their revenue grew 21% to $1.9 trillion, about the same as the 20% growth for all businesses.
“Because of women's different perspectives, skills and experiences, they solve problems in new and innovative ways,” said a report American Express released last week. “And, as it turns out, women are often more likely than business owners in general to see a need in the market and to start a company to fill it.”
The 2019 State of Women-Owned Businesses report also lists states with the highest “employment vitality” – measured by employment growth rate and average numbers of employees between 2014 and 2019.
Indiana ranked third, following first-place Maine and Minnesota. Delaware and Virginia tied for fourth, rounding out the top five. Illinois was among the 10 states with the lowest employment vitality.
“It's like sort of a double-edge sword,” said Andie Hines-Lagemann, who runs local marketing firm Red Tree and is founding director of Own Your Success.
“I love when studies like this come out because it's like, 'Yes, we're making progress,'” she said. “But at the same time I don't want people to get complacent.”
Access to capital is still a barrier for women entrepreneurs and the business world is “still very male dominated here,” Hines-Lagemann said.
The report American Express commissioned is based on data from the U.S. Census Bureau's Survey of Business Owners, which is conducted every year that ends in a two or seven. The researchers used the census data and factored in growth in the Gross Domestic Product using information from the U.S Bureau of Economic Analysis.
Women-owned businesses were defined as those at least 51% owned, operated and controlled by one or more females.
The report's release comes just as local volunteers and government leaders are ready to launch their second Startup Week Fort Wayne, designed to equip and encourage entrepreneurs.
The free five-day conference, starting Oct. 14, includes about 25 presentations and workshops, including some tailored to women. Signups are at fortwayne.startupweek.com.
Own Your Success is a networking group that works with about 500 women entrepreneurs, Hines-Lagemann said. That sounds impressive – until “you consider that that only represents about 3 to 5% of our entrepreneurs,” she said. Nationally, the average is four to five times as high.
Own Your Success provides an educational and networking support system, including a private Facebook page where members can be transparent about issues they encounter running a business, she said.
Leslee Hill, director of the Women's Entrepreneurial Opportunity Center at the Northeast Indiana Innovation Center, said securing financing for a business may be more challenging for women than men. Women also may focus more on the “mental wellness and self-care” issues that have to be balanced with the demands of being an entrepreneur.
Hill was in Virginia last week attending an Association of Women's Business Centers Leadership Conference. A contingent planned a trip to Capitol Hill to stress the funding that business centers need to continue helping women entrepreneurs.
The Women's Entrepreneurial Opportunity Center, which has various programs, assisted nearly 500 clients in the fiscal year ending this month, said Hill, whose been in the job about 18 months.
Many women launch service-sector businesses.
“They have a skill and they think, 'OK, someone will pay me to do this skill,” Hill said. “It's all their intelligence ...and there's not a lot of cash outlay to start the business.”
The American Express report said the three industries in which women-owned businesses have the highest total employment percentages are health care and social assistance (21%), accommodations and food services (16%) and administrative, support and waste management services (13%).
The three industries in which women-owned businesses have the highest total revenue are wholesale trade, retail trade, and the professional, scientific and technical services such as bookkeeping, public relations and consulting.
While women's companies in professional, scientific and technical services generate lower revenue, women's companies in retail generate 1.6 times more revenue than the average women-owned business and women in the wholesale industry generate 12.5 times more revenue.
Fort Wayne native Taylor Hollister has been offering business consulting with an emphasis on marketing and design for five years through a company that bears her name.
Hollister, a Startup Week volunteer and Founders Spark Program director, said she's found the local community “extremely supportive of women.”
Founders Spark helps connect new and aspiring entrepreneurs with an emphasis on education, mentorship, and resources.
Women comprise most of the Founders Spark clientele and most are under age 40.
Those starting businesses are “people who have some sort of passion projects,” Hollister said. “Originally they didn't think it was something that could support them, and they take the dive and figure it out, and it least it becomes something part-time for them if not full-time.”
She sees a lot of specialization.
“It's just like Business 101,” Hollister said. “Find out where the market needs you and capitalize on that.”
Snapshots from study
The report American Express commissioned on women-owned businesses was full of figures, based on Census data and factors such as Gross Domestic Product, the total value of goods and services produced annually. Report highlights include:
• The share women-owned businesses represent of all businesses has skyrocketed from 4.6% in 1972 to 42% in 2019.
• The combination of women-owned businesses and firms equally owned by men and women – 15,258,900 – accounts for 49% of all businesses. These firms employ 16,469,200 people – or 14% of the workforce and generate $3.2 trillion or 8% of revenue.
• While the number of women-owned businesses grew 21% from 2014 to 2019, firms owned by women of color grew at double that rate, 43%. Numbers for African-American/Black women grew even faster, at 50%. For Native Hawaiian/Pacific Islander, 41%; Latina/Hispanic, 40%; Asian American, 37%; and Native American/Alaska Native, 26%.
• Revenue disparity is increasing. In 2014, minority-owned businesses averaged $67,800 in revenue; by 2019, the average had dropped to $65,800. In 2014, non-minority women-owned businesses averaged $198,500 in revenue; by 2019, the average jumped to $218,800.
• In 2019, women-owned businesses averaged earnings of $142,900 compared to $474,900 for all privately held businesses and $1.4 million for all firms, including publicly traded companies.
• Indiana is ranked 23rd in growth of number of women-owned firms since 2014 with 8.7% increase, 11th in growth of jobs created with a 7.2% increase and 10th in growth of firm revenues with a 14.3% increase.