In August, the National Women’s Business Council released its analysis looking at preliminary Census data that revealed that in 2012 there were almost 10 million women-owned small businesses in the United States. This is up 27.5 percent from the previous Census data, which was collected in 2007. Men still owned more businesses overall than women (in 2012 there were nearly 15 million male-owned businesses), but women-owned businesses grew at a much faster rate of four times that of male-owned businesses. Here are some more key takeaways from the report.
- The Census found that between 2007 and 2012 women-owned businesses earned a total of $1.6 trillion dollars.
- In addition, 89.4 percent of them were run by sole proprietors, which means that the owner was also the only employee.
- One hurdle facing women entrepreneurs was a lack of access to capital, with women starting up their businesses with an average of half as much money as men do. In addition, women are much more likely to invest personal savings into their startups.
A Link between Economic Woes and Increase in Women-Owned Businesses
Interestingly, other statistics point to the possibility that economic strains faced in particular by women of color during the recession may explain in part why so many females have pursued entrepreneurship. Statistical trends supporting this theory include the fact that blacks and Hispanics have experienced consistently higher rates of employment from 2007 to 2012 than white or Asian women. In addition, black and Hispanic women were much more likely to end up being the financial head of household.
Indeed, between 2007 and 2012, the greatest growth in women-owned startup businesses came in the Hispanic population at 87 percent (with nearly 1.5 million small business owned by Hispanic women in 2012). The black community saw a 68 percent growth in female entrepreneurship, and the Asian community saw a 44 percent increase. In contrast, businesses owned by white female entrepreneurs only grew by 10 percent.
However, it’s important to note that white women still own the majority of women-owned businesses in the United States at 6.1 million. They also earned significantly more, posting an average earning of $214,000 in 2012 compared to the average earnings of $79,000 for women-of-color entrepreneurs.
This report pulled in data from the Census’s Survey of Small Business Owners. The Census defines a woman-owned business as one in which a female owns 51 percent or more of the business equity or stock.
Vega, Tanzina. “U.S. Sees Big Spike in Black and Hispanic Women Entrepreneurs.” CNN Money. 8/20/15.