Women in Business — How Do the Numbers Stack Up Nationally?

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There is no question that women represent a huge portion of the American workforce. But just what does that look like? Here are some interesting facts and statistics about women in business on the national level.

Guidant Financial, a company that provides small-business and franchise financing, participated in a survey of more than 2,400 small-business and franchise owners nationwide in December 2020 to ask current and aspiring women business owners in America to share what their businesses look like, how they responded to the COVID-19 pandemic and what they expect in 2021. Here are some of the findings as reported in an article on the Guidant Financial website:

Thirty-one percent of all small-business or franchise owners are women — up from 27 percent the previous year. Over half of those women business owners are Gen X (born between 1965 and 1980). Baby Boomers (1946-1964) account for 31 percent, while 17 percent are Millennials (1981-1996). Gen Z, born in or after 1997, make up one percent of respondents. They are also highly educated: The largest share, at 34 percent, holds a bachelor’s degree, while 27 percent have a master’s and eight percent a doctorate. Eleven percent of respondents have an associate’s degree and 20 percent a high school diploma or GED.

The survey results cite the reasons these women became business owners as varied, but the plurality of 29 percent said they were ready to be their own boss; the next-most common response at 20 percent was a desire to pursue their passion, followed by a dissatisfaction with corporate America and the presentation of an opportunity, each with 13 percent.

The top four industries in which women own businesses are health, beauty and fitness services; food and restaurant; retail; and business services, the report states. The amount each spent to launch their business differs, though over half spent less than $50,000. Seventeen percent spent between $50,000 and $100,000 and nine percent spent up to $175,000. The remaining 22 percent spent between $175,000 and over $1 million, though only two percent fell into the $1 million+ rank.

Here are additional findings offered in the report:

30 percent of respondents have owned their business for ten years or more; 17 percent had just launched the previous year, 20 percent have been open two to three years and 13 percent for four to five years. In total, businesses that have been open for five years or less account for exactly 50 percent of respondents. Fifteen percent of these women-owned businesses have been open six to nine years.
The large majority of women business owners employ at least one person other than themselves: 46 percent employ two to five people, while another 19 percent have between six and ten employees. Fourteen percent of respondents employ between 11 and 50+ employees, and the business owner is the only employee in the remaining 20 percent.
The number of people employed by women-owned businesses is increasing: The survey indicated that 32 percent of owners were the only employee, and the two-to-five range has also increased year-over-year by 23 percent.
Fifty-eight percent of women-owned businesses were profitable. Profitability is down 18 percent from the prior year, though the report states that this is not surprising given the upheaval of 2020.
The top challenges women business owners faced in the last year were marketing and advertising, with 24 percent of the share, lack of capital/cashflow at 17 percent and recruiting/retaining employees at 15 percent. Other common challenges included managing/providing benefits (14 percent), administrative work (13 percent) and time management (nine percent).
When asked which party best represented their own political views, 33 percent of women business owners answered Democrat and 24 percent Republican. Seven percent answered either Libertarian, Green or other. But 36 percent — more than one-third of all respondents — said they do not belong to or feel represented by any political party. Women business owners also indicated in the survey that they are not feeling confident about small business in today’s political climate. Just 37 percent reported feeling somewhat or very confident, 21 percent are neutral and 42 percent said they are somewhat or very unconfident. This is a dramatic drop from the previous year’s responses, where 58 percent were somewhat or very confident, 22 were neutral and only 19 percent somewhat or very unconfident.
Looking ahead, the survey reported that things are looking up for women-owned businesses in 2021: Nearly half of women business owners said they planned to grow their current location, while a third planned to sustain it. Nine percent planned to sell, and eight percent planned to open a second location. They also have plans to invest. In a question where respondents could select as many options as applied to them, 83 percent said they plan to invest in digital and/or traditional marketing, 44 percent plan to expand or remodel their business and 43 percent intend to increase their staff.
A full 76 percent of women business owners report being somewhat or very happy, while just 14 percent report being very or somewhat unhappy.

Despite all the recent challenges, women business owners have generally weathered the storm well.

Fast Facts About Women Business Owners in the U.S.

The National Association of Women Business Owners reports the following statistics about women-owned businesses in the United States:

More than 11.6 million firms are owned by women, employing nearly 9 million people and generating $1.7 trillion in sales as of 2017.
Women-owned firms (51 percent or more) account for 39 percent of all privately held firms and contribute 8 percent of employment and 4.2 percent of revenues.
5.4 million firms are majority-owned by women of color in the U.S., and they employ 2.1 million people and generate $361 billion in revenues annually.
One in five firms with revenue of $1 million or more is woman-owned.
4.2 percent of all women-owned firms have revenues of $1 million or more.
The United States Census Bureau offers these statistics:
There were 6,861 more women-owned firms in 2018 than in 2017, up 0.6 percent to 1.1 million, according to the Census Bureau’s most recent Annual Business Survey (ABS).
Women-owned employer firms reported nearly $1.8 trillion in sales, shipments, receipts or revenue and employed over 10.1 million workers with an annual payroll of $388.1 billion in 2018.
Women-owned firms in the Arts, Entertainment and Recreation sector rose 10.5 percent, from 22,219 in 2017 to 24,542 in 2018.
Demographic characteristics of the nation’s women-owned firms are similar to their male-owned firm counterparts.
Most women-owned businesses are run by White women (82.8 percent of all women-owned firms), non-minority (74.6 percent), non-Hispanic (92.4 percent) and non-veteran (98.9 percent).
Women-owned firms tend to be more concentrated in certain sectors than all firms overall. According to the ABS, 191,230 or approximately 16.8 percent of the nation’s total 1.1 million women-owned firms in 2018, were classified in the Professional, Scientific and Technical Services sector, compared to 14.3 percent for all firms in the sector.
Employees of women-owned firms were also concentrated in certain sectors. Nearly 2.0 million or approximately 19.4 percent of the 10.1 million employees of women-owned firms worked in the Health Care and Social Assistance sector in 2018, compared to 14.9 percent of all firm employees.
Average annual earnings of employees of women-owned firms lag behind the national earnings average of the workers of all firms: $38,238 in average annual payroll per employee compared with $54,114.
Women-owned firms in nine of the 20 sectors the ABS covered had average annual payroll per employee statistically lower than the total for all firms in those sectors.
The lack of sex parity was also visible in average annual sales, shipments or revenue.
In 2018, women-owned firms earned an average of $1.6 million in sales, shipments or revenue; male-owned firms’ earnings were double that at $3.2 million.