How many women own small companies in the U.S.? What does their funding look like? Which industries are the money makers?
We reviewed information from the Small Business Administration (SBA), SCORE, National Women’s Business Council, and small business trends surveys to learn about female founders and small business owners. Plus, we scoured the American Express 2019 State of Women-Owned Businesses Report based on data from the U.S. Census Bureau and U.S. Bureau of Economic Analysis.
- Fifty percent of all women-owned businesses are minority-owned.
- Women-owned businesses employ nearly 9.4 million people.
- Every day 1,817 new women-owned businesses start up.
- Women own 42% of all companies in the U.S.
Proportion of women-owned businesses in the U.S.
According to American Express, since 2014 the number of women-owned businesses grew by 21% to nearly 13 million in 2019. That’s 42% of all companies at least 51% owned, controlled, and managed by one or more females.
When you add over 2.3 million companies owned equally by men and women to that, it represents 49% of all businesses and employs 14% of the workforce.
Plus, part-time female entrepreneurs or sidepreneurs increased by 39% between 2014 and 2019, suggesting that a growing number of women see part-time entrepreneurship as a way to pay bills, build wealth, or follow a passion.
With more than double the annual growth rate of all other businesses, female founders are steadily breaking down barriers to start and run successful companies.
Statistics on women-owned businesses by race and ethnicity
More women of all races and ethnicities are becoming entrepreneurs. Minority-owned companies account for 50% of all women-owned businesses, generate 23% of all women-owned business revenue, and include some 6.4 million companies.
Between 2018 and 2019, the number of minority-owned businesses grew by 10% versus a 5% average rate for all women-owned companies.
Furthermore, the number of Black women-owned businesses increased at a 12% annual growth rate in 2019 compared to an 8% annual rate in previous years.
Since 2014, women of color have entered the business world at rates much higher than non-minority women. American Express finds that the number of non-minority women-owned businesses increased by 5.6% between 2014 and 2019.
However, during the same timeframe, the number of companies owned by minority women grew by 43%, with gains seen in all groups:
- 50% for African American/Black
- 41% for Native Hawaiian/Pacific Islander
- 40% for Latina/Hispanic
- 37% for Asian American
- 26% for Native American/Alaska Native
|Race/ethnicity||Number of businesses||Percentage of total women-owned businesses|
|All women-owned businesses||12,943,353||100%|
|Native American/Alaska Native||180,316||1.4%|
|Native Hawaiian/Pacific islander||40,375||0.3%|
Statistics on women-owned businesses by education
The Small Business Trends survey from the Small Business Trends Alliance, which collected data from over 3,100 small business and franchise owners, found that 27% of respondents were female.
|Education level attained||Percentage of female business owners|
|High school or GED||26%|
Types of funding for women-owned businesses
Nonprofit small business services provider SCORE reports that 62% of female business owners rely on their company as their main income source. Female entrepreneurs receive 8% less in equity raised from investors than men and charge 7% more to credit cards for business financing.
|Source of funding||Percentage of female business owners who use funding source|
|Borrowings from family and friends||25%|
|Mortgage or 401(k)||15%|
Small Business Administration loans
SBA data from August 2019 shows that 28% of SBA loans, equaling more than $5.8 billion, went to women-owned businesses. Of this percentage, half went to majority women-owned companies and half went to women owners with less than a 50% stake in the business.
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs help finance early-stage research and development. Companies don’t need to pay back the money or give up equity, making these awards advantageous.
According to the National Women’s Business Council (NWBC), 13% of SBIR/STTR awards went to women-owned small businesses (WOSBs) in 2018. Only two of the 11 federal agencies that fund the programs increased financing for WOSBs, including:
- National Science Foundation (NSF): 22.4% in 2018 compared to 15.5% in 2011
- Department of Energy (DOE): 10.5% in 2018 versus 3.5% in 2011
The Department of Education regularly delivers a high portion of awards to women-owned businesses, with 40% going to WOSBs in 2018.
Women-owned businesses by industry
Almost 50% of all women-owned companies reside in three industries, equaling nearly 6.3 million businesses, and including:
- Healthcare and social assistance: Child care or home health care companies
- Other services: Hair, nail, and pet services
- Professional, scientific, and technical services: Consultants, bookkeepers, and PR firms
|Industry||Percentage of all women-owned businesses|
|Healthcare and social assistance||15%|
|Professional, scientific, and technical services||13%|
|Administrative, waste management, and remediation services||11%|
|Accommodations and food services||2.8%|
Over the last five years, the number of women-owned companies increased at the highest rates in five industries:
- 160% utilities
- 68% construction
- 36% information
- 29% other services
- 23% arts, entertainment, and recreations
Women-owned businesses by revenue
Overall, revenue generated by women-owned companies grew by 21% from 2014 to 2019. Women-owned businesses now produce $1.9 trillion in sales. But equal ownership companies create another $1.3 trillion.
Five industries realized the highest revenue growth since 2014:
- 31% construction
- 28% transportation and warehousing
- 27% accommodation and food services
- 24% information
- 22% professional, scientific, and technical services
However, the industries with the highest revenue include wholesale trade, which accounts for 17% of total women-owned business sales, and retail trade, creating 14% of all women-owned business revenue. In fact, wholesale trade companies earn 12.5 times more revenue than the average woman-owned company.
How COVID-19 has impacted women-owned businesses
Although women, especially women of color, have made great strides in small business ownership, the economic fallout from the pandemic adversely affects women in greater numbers.
The U.S. Chamber of Commerce released new data on the effect of COVID-19 on women-owned businesses. Pre-pandemic, 60% of female business owners ranked their overall business health as good. By July 2020, this dropped to 47%.
Moreover, in 2019 63% of women predicted their business revenue would increase in Q1 of 2020. Yet, in July 2020, only 49% of women owners forecast an increase in Q1 of 2021.
This data is similar to the results from the Global State of Small Business conducted in May 2020. It found that 30% of women-owned businesses had to close temporarily during the pandemic versus 17% of male-owned companies.
Since 22% of women-owned businesses are categorized as “other services,” it’s likely many suffered due to shutdowns of nonessential businesses. Going forward, the struggles will continue. But, as women have proved again and again, they will persevere.
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