Women-owned business statistics prove that female entrepreneurs aren’t to be underestimated. Not only do they account for over 12 million of the businesses in the U.S., they also tend to generate higher revenues, create more jobs, and improve company performance compared to their male counterparts.
Check out the women-owned business statistics below to get a taste of the current environment female business owners face.
General women-owned business statistics
There’s no shortage of impressive women-owned business statistics we could cover, but here are a few bigger picture stats to get started. These data points highlight the state of women-owned businesses in the U.S. today and give us an idea of where the world could be headed in terms of female entrepreneurship.
1. There are 12.3 million women-owned businesses in the U.S. (1)
According to the National Association of Women Business Owners, there are over 12 million women-owned businesses in the U.S. alone, which is about 40% of all the businesses in the country. That, compared to the 402,000 just 50 years ago, is a huge step in the right direction for female entrepreneurship.
2. Women-owned businesses generate $1.9 trillion each year (8)
Women-owned businesses bring in nearly $2 trillion every year. Although this accounts to about 4.3% of annual private sector revenue, we can expect this number to keep growing as more and more women start their own businesses.
3. Women started over 1,800 new businesses a day in 2018 (1)
According to the most recent numbers, there were 1,821 net new businesses started by women each day in 2018. Given the current growth of female entrepreneurship in the U.S., we can expect to see millions more women-owned businesses across the country in the coming years.
4. 64% of new women-owned businesses are started by women of color (1)
Over 60% of all new women-owned businesses are started by women of color. In fact, according to a study by McKinsey, Black Americans are more likely to start businesses than any other ethnic group. With more and more opportunities becoming available to women of all racial and cultural backgrounds, we have high hopes for the future of the U.S. economy.
5. There are 114% more female entrepreneurs than there were 20 years ago (3)
The National Women’s Business Council found that the number of female entrepreneurs has increased by 114% compared to just 2 decades ago. Although there is still more work to be done to make the business world a more diverse, inclusive place, we’re certainly on the right track.
6. 62% of female entrepreneurs claim their business as their primary income source (1)
Over 60% of female entrepreneurs claim their business as their primary source of income. This means that most of the women-owned businesses in the country are full-time ventures that meaningfully contribute to our economy and communities.
7. Women-led tech companies achieve a 35% higher ROI (2)
It’s widely considered that female business leaders have specific qualities and skills that make them better entrepreneurs than their male counterparts. In fact, Forbes found that women-owned tech companies have a 35% higher ROI than those run by men.
8. Female-founded businesses outperform those founded by men by 63% (2)
The success of female business leaders is seen beyond the tech industry, too. A Forbes study with venture capital firm First Round Capital concluded that the female-founded businesses in their portfolio outperformed male-founded companies by over 60%.
9. Women-owned businesses were more affected by the COVID-19 pandemic (8)
The COVID-19 pandemic affected women-owned businesses slightly more than their male-owned counterparts. The latest data shows that active women-owned businesses dropped 25% from February to April 2020, while the overall numbers indicated a 22% (3.3 million businesses) dropoff.
10. Women-owned businesses employ nearly 11 million people (10)
According to the latest numbers from the U.S. Census Bureau, women-owned employer firms are responsible for employing 10.9 million people, and paid $432.1 billion in payroll.
WOC-owned business statistics
11. Black women are the fastest growing group of entrepreneurs in America (9)
Black women own nearly 2.7 million businesses across the United States. In fact, the number of businesses owned by Black women grew by 50% between 2014 to 2019, the latest statistics show. During that time, Black women made up 42% of all women who opened a new business during that time.
12. Only 3% of Black women owners are managing businesses older than 10 years (11)
According to a study on WOC-owned businesses in America, only about 3% of Black women are managing mature businesses, or businesses which are older than 10 years. This is due to a number of factors, including access to startup capital and support, as well as the COVID-19 pandemic.
13. Half of women-owned businesses are owned by WOC (12)
About half of women-owned businesses are owned by women of color. Of that half, 21% are owned by Black women, 18% are owned by Latina/Hispanic women, and 9% are run by Asian women. Native American/Alaskan Native women own just 1.4% of businesses, and Native Hawaiian and Pacific Islander women make up 0.3%.
14. Black female founders make significantly less revenue than the women-owned average (9)
Black female founders earn an average revenue of $24,000, compared to the overall average of $142,900. This may be due to which industries they dominate. For example, 61% of Black female entrepreneurs start companies in retail/wholesale, education, government and social services, and health sectors, compared to47% of White women and 32% of White men starting businesses in the same sectors. They tend to have lower margins and a more saturated market, making the businesses less sustainable over time.
15. More Black women self-fund their startup capital (9)
According to the most recent available numbers, 61% of Black women self-fund their startup capital, even though less than a third of them live in households with over $75,000. This is likely because Black business owners who apply for funding are three times more likely to be rejected. Access to credit is commonly cited as a challenge to opening a new business.
16. Less than 100 Black women raised over $1 million in venture capital in 2020 (9)
Women-owned businesses have a tougher time getting financing in general, as you’ll see below, but Black women are particularly affected. Fewer than 100 Black women were able to raise over $1 million in venture capital in 2020. For comparison, startups raised $156.2 billion overall in 2020.
Women-owned business statistics for financing
Despite their obvious success, women-owned businesses have a harder time when it comes to securing financing. Check out these surprising women-owned business statistics that bring to light the realities of capital funding for female entrepreneurs.
17. Only 25% of women-owned businesses seek financing (1)
While 33% of male business owners secure a loan to get their business up and running, only 25% of female entrepreneurs do the same. Since access to capital is the lifeblood of a small business, it’s important to ensure that all businesses have fair and equal financing opportunities.
18. Women-owned startups pay a higher interest rate (7)
A 2018 study by the Kauffman Foundation found that women seeking financing for startup businesses paid a higher interest rate on loans than men. This adds an extra barrier for female entrepreneurs to overcome, making it that much harder to start and grow their businesses.
19. Women have a 69.5% success rate in crowdfunding (5)
Many female entrepreneurs have turned to crowdfunding to get their businesses off the ground. With a 69.5% success rate, women have an 8% better chance of financing their business solely through crowdfunding than men do.
20. Female entrepreneurs ask for less financing than males (6)
Regardless of where they go looking for funding, be it through a traditional lender or a crowdfunding project, female business owners tend to ask for $33,000 less than men, on average.
Small business banking for women-owned businesses
If these women-owned business statistics have you excited about starting your own business, be sure to look into the small business banking options available through NorthOne. Our easy-to-use platform is trusted by more than 320,000 small businesses across the United States. Talk to our team today to see how we can help you get started.
Sources:
1. WBENC: Behind the Numbers: The State of Women-Owned Businesses in 2018
2. Forbes: 10 Stats That Build The Case For Investing In Women-Led Startups
4. Small Business Trends: 20 Amazing Stats on Women Entrepreneurs from SCORE
5. Fundera: State of Small Business Lending: Is the Gender Gap in Funding Closing? (Q2 2019)
6. Fundera: State of Small Business Lending: 2017 Spotlight on Women Entrepreneurs
7. Ewing Marion Kauffman Foundation: Access to Capital for Entrepreneurs: Removing Barriers
8. National Women’s Business Council: 2020 Annual Report
9. J.P. Morgan: Black women are the fastest growing group of entrepreneurs. But the job isn’t easy.
10. United States Census Bureau: Census Bureau Releases New Data on Minority-Owned, Veteran-Owned and Women-Owned Businesses
12. Zippia: WHAT PERCENTAGE OF FEMALE-OWNED BUSINESSES ARE RUN BY WOMEN OF COLOR?
