“Entrepreneurs, business owners, marketers, policymakers, economists, distinguished readers…our economy is just coming out of recession, unemployment is high, and we barely dodged the bullet of a financial industry meltdown a few short years ago. Yet the state of women-owned small businesses is strong.”
I couldn’t resist mimicking a presidential State of the Union address to give you the headline from the hot-off-the-presses State of Women Owned Small Businesses Report by American Express OPEN.
Yes, the state of women-owned businesses in the United States is strong. The 8.1 million women-owned businesses would leave a huge hole in the U.S. economy if they disappeared tomorrow. Women-owned businesses account for more than $1.2 trillion in revenues annually. They employ more people than the entire population of Switzerland—7.7 million people.
Not only that, but women-owned businesses are growing at a faster rate than the national average—about one and a half times the national average. (See this infographic showing the growth of women-owned businesses over the past 14 years.)
Good statistics, right? But you’re probably thinking, what do they really mean to me and my business? And what in the world did I mean that the state of women-owned small businesses could be stronger?
To answer these questions, let’s take a deeper dive into the "State of Women-Owned Small Businesses Report."
Women are doing well and actually holding their own. Know that you’re not alone in your quest to grow your business.
Women-owned firms have done better than their male counterparts. Men-owned firms grew at half the rate of women-owned firms between 1997 and 2011. Employment in men-owned firms actually declined by nearly 5 percent over the past 14 years. So by comparison with men, women business owners have done well on average.
Want to read more on women-owned businesses? Check these out:
Women-owned firms have diversified into many industries. Healthcare and educational services have the highest percentages of women-owned businesses (52 percent and 46 percent, respectively). Yet, women business owners have gained a foothold in all sectors of the U.S. economy. No more stereotyping of women businesses in certain “female” industries!
Where women-owned businesses could do better
Women-owned small businesses are doing well compared with other businesses, and at some growth stages, are outpacing men-owned businesses.
But then comes the dreaded “Heartbreak Hill.” Heartbreak Hill describes two growth obstacles: exceeding 1 million dollars in annual revenues, and growing past 100 employees. These are two glaring areas where women-owned businesses don’t compare as well; growth stalls, and women business owners have a tougher time getting over these two humps.
Two take-away tips
So what can we take away from this report for our own businesses, as women business owners ourselves, or as businesses that market to women-owned businesses or the women who lead them? There are dozens of insights to be gained. Here are just two tips I’d like to leave you with:
1. Set goals to exceed $1 million in annual revenues. You’re more likely to avoid falling on Heartbreak Hill if you set a goal, write it down, communicate it to your organization and actively work toward it. In fact, there’s an organization for this purpose precisely. Make Mine a Million helps women entrepreneurs focus their efforts to scale Hearthbreak Hill and reach the summit. Or, find yourself a good mentor who has experience getting over that $1 million hump.
2. Marketers, remember that you increasingly will be dealing with women business owners as decision-makers, including in industries where women business owners have been scarce in the past, such as finance, insurance and construction. It’s important to re-examine your marketing approach and messaging to make sure you’re not making subconscious assumptions that all women-owned businesses are lifestyle businesses or want to stay small. And make a conscious effort for your sales force to reflect your target market. If all your sales representatives are men, what does that say when approaching women business owners? Take a page out of the book of car dealers, who a decade or two ago woke up to the fact the male-oriented, hard-line approach to sales wasn’t working when most car purchases were strongly influenced or decided by women. That’s when they started bringing in more female car salespeople, and adjusting advertising and marketing communications to women buyers.
The State of Women Owned Small Businesses Report is packed with lots of statistics. I strongly suggest you download, and read it through in depth. You will find lots of gems to put to work in your own business strategy. And good luck in the growth of your woman-owned business!