6 Trends of Women-Owned Businesses in America
2017 was the year of the woman in more ways than one. After all, the 2017 Webster Word of the Year was “feminism.” From the first-ever Women’s March to the #MeToo and #TimesUp movements, it was a year when women found – and used – their voices to elicit change and equality. But that change is happening beyond the C-Suite and Hollywood production sets and finding its way to Main Street American small businesses as well.
March is International Women’s Month, so I asked David Nilssen, co-founder and CEO of Guidant Financial, about a recent State of Small Business Survey of more than 2,600 current and aspiring small business owners conducted by Guidant Financial and LendingClub. The survey found a nearly 20 percent increase in women-owned businesses in 2017, clearly confirming the trend that women continue to become their own bosses.
Here are some of the details and impactful trends he identified about women in business:
- Women pursue business ownership earlier: Women are typically starting businesses earlier in life than men. More than half of female respondents in the survey were under 50, while only 44 percent of male respondents were in the same group.
- Women-owned businesses are profitable. In fact, 60 percent of female business owners reported that their businesses were currently profitable (10 percent had not yet opened their doors yet). Even Shark Tank’s Kevin O’Leary prefers investing in women-led companies since they produce better returns. In fact, his company, O’Shares Investment, found that about 95 percent of the women-led companies met their financial targets, compared with just 65 percent for businesses with male leaders.
- Female business owners are well-educated. When it comes to higher education, women, the largest group of respondents — at 32 percent — had earned a bachelor’s degree, while among male respondents the largest group (37 percent) had just a high school diploma or GED.
- Women are wary of today’s political climate: Female business owners reported feeling less confident in the political state of small business than their male counterparts. The average confidence level for women was a 7 out of 10, while men had an average confidence rating of 8 out of 10.
- Women are pursuing alternative financing methods. Even though SBA loans were among the most popular financing methods pursued by aspiring female entrepreneurs, only 6 percent of current female business owners reported getting a traditional SBA loan.
- Female business owners are happy. Female respondents reported an 8 out of 10 for their happiness levels as business owners.
While female business ownership is on the rise, there’s still a long way to go. Of the 2,600 surveyed, 72 percent of small businesses owners are still male. There’s clearly more work to be done.
What’s more, the survey’s findings are consistent with recent statistics that women are 15 – 20 percent less likely to be approved for loans and receive only seven percent of venture capital funding.
So, if you’re a woman considering her next career move, starting a business may be a smart choice. And, you’ll be helping change the tide and work towards gender parity in entrepreneurship. Win, win.