As the United States continues to crawl out of its economic slump, women are emerging as key drivers in new business creation, according to new research. This year’s OPEN State of Women-Owned Business report finds that an estimated 1,200 new businesses a day were started by women over the past year, up from an average of 740 a day the year prior. Four out of 10 new firms are now started by women.
The fourth-annual report also shows the influence of companies owned by women of color, which now account for one-third of all women-owned businesses in the United States. While firms owned by women of color are smaller than non-minority women-owned businesses both in terms of average number of employees and revenue, their growth in number is generally far outpacing that of all women-owned firms.
Other key findings from the report include:
1. There are now 9.1 million women-owned businesses in the United States.
These firms generate more than $1.4 trillion in revenue and employ more than 7.8 million people, according to the report.
2. The top state for women-owned businesses is probably not what you would expect.
In terms of growth in combined economic clout (which averages together growth in number, revenue, and employment), North Dakota is the top state for women-owned firms.
3. Small-business ownership by women of color is growing rapidly.
Since 1997, firms owned by women of color have seen faster growth in terms of total number of firms, employees, and revenue compared with all women-owned firms. Comprising just 17 percent of women-owned firms 17 years ago, firms owned by women of color now account for one in three (32 percent) of women-owned firms in the United States.
4. Women-owned firms are expanding across industries.
Women-owned firms now lead growth in eight of the top 13 industries, reflecting a continued diversification. Sectors where women-owned firms are leading growth include real estate, finance/insurance, and wholesale trade. Women-owned firms lag sector growth in two industries—educational services, which has seen the greatest sector growth in the past decade, and retail/trade, which has shown anemic growth overall.
5. Despite the proliferation of women-owned businesses, there’s still more to be done.
The number of women-owned firms continues to grow at a rate exceeding the national average, yet women-owned firms only employ 6 percent of the nation's workforce and contribute just under 4 percent of business revenues—roughly the same share they contributed in 1997. The report notes that “the real issue at hand is not getting more women to start business, but rather providing support to women who are already in business to enable them to grow their enterprises to the next level.” The report recommends that policy and programmatic support target firms with five to nine employees, and those aiming at, but just shy of, the million-dollar mark.
You can read the full report here to learn more about the state of women-owned businesses in the United States—and what more can be done to support these women leaders.
Photos from top: ZINEPAK, KIM KAUPE AND BRITTANY HODAK, MEMBER SINCE 08; Graphs, charts, and statistical data courtesy of 2014 OPEN State of Women-Owned Business report