Research Summary. Over the past 20 years, women-owned businesses have become more plentiful, profitable, and beneficial to the economy as a whole. Below, you’ll gain insights into the evolution of women-owned businesses and their place in the market today.
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42% of small businesses are owned by women in the United States.
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An average of 1,821 new businesses start per day by women in 2022.
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16% of startups in the United States had at least one female founder.
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There has been a 114% increase in the number of female entrepreneurs over the last 20 years.
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Women-owned businesses generate an average of $1.8 trillion per year.
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47% of female-owned businesses are owned by women of color as of 2022.
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The number of women-owned small businesses increased by 58% from 2007 to 2018.
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90.3% of women hold micro-businesses (compared to 82.3% of men).
For further analysis, we broke down the data in the following ways:
Entrepreneur | Entrepreneurs and Business Owners | Location | Obstacles
Women Small Business Statistics
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In 2019, women started an approximate total of 663,205 businesses.
On average, there are 1,821 businesses founded by women every single day in the United States. This shows gigantic growth from the previous five years when the average was hovering around 1,200, which adds up to well over half a million female-owned businesses formed every year.
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As of 2019, there are a total of 12,943,400 businesses that are owned by women.
This number has been consistently and rapidly rising for the past 50 years. During that time, female-owned businesses have become widely accepted by the general public. The nearly 13 million female-run businesses today demonstrate a stark comparison to the 402,000 women-owned businesses around in 1972.
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42% of all businesses are owned by women as of 2022.
This figure gives a picture of the business world as fairly equal between men and women.
The world has opened up for female-owned businesses enormously over the past 50 years, but this statistic still illustrates some lagging when it comes to women-driven businesses.
While this still reflects a bit of an imbalance, it’s a figure that’s risen enormously over the past decade. In 2010, businesses that were owned by women only accounted for 29% of all active firms.
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9.4 million people are employed by women-owned businesses.
This total number of employees represents a growth of 8%.
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Women-owned businesses each earned an average revenue of $1.6 million as of 2018.
That’s a decent amount of dough, but it’s still only half the average annual earnings of businesses owned by men at $3.2 million. The accumulated revenue from women-owned businesses has risen 21% since 2014. Alternatively, the revenue growth rate for all businesses in the United States only rose by 9%.
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As of 2020, 7.4% of Fortune 500 CEOs are women.
While this sounds like women are filling a small portion of management positions within these major corporations, this percentage shows a major rise from recent years.
Women Entrepreneur Statistics
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In 2020, 2.3% of venture capital funding was given to women-led startups.
The percentage of funding given to female-operated startups has dropped 0.5% from 2.8% in 2019.
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16% of startups in the United States have at least one female founder.
Of the $83 billion invested into venture-backed startups in the United States, only 2.5% of this funding was designated to startups with solely female founders.
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The most common industries for female-founded businesses include healthcare and social assistance, professional, scientific, or technical services, and other services like beauty salons and pet care centers.
The ‘other services’ industry represents 22% of women-owned businesses with 2.8 million firms total.
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The number of women entrepreneurs in the United States has increased by more than 30% since 2007.
The amount of women-owned businesses has grown at a greater rate than other small businesses over the past 15 years. These businesses are estimated to have created approximately 5 million jobs.
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On average, women receive a loan size of $59,857 to start their businesses.
This amount is 2.5 times less money than their male counterparts receive in loans. Male entrepreneurs receive an average loan size of $156,279. Less financing opportunities and lower loan amounts make it more difficult for women-owned businesses to grow.
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Only about 25% of entrepreneurs seeking funding for their businesses are women.
According to Fundera, only one in every four applicants for a loan was a woman.
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Around 32% of women who apply for business funding are approved for credit.
This statistic is fairly close to the approval rating for male entrepreneurs at 35%.
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Women only received 7% of the venture capital raised in the United States between 2010 and 2015.
This percentage demonstrates a huge gap from the percentage of male entrepreneurs who receive venture funds.
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There were 15,105 startups funded with at least one female founder from 2009 to 2019.
In 2019, female-founded startups represented 20% of all companies founded. That figure has more than doubled in ten years. In 2009, startups founded by women only accounted for less than 10%.
Women of Color Entrepreneurs and Business Owners Statistics Over Time
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Women of color own 50% of female-led businesses as of 2019.
In total, 6,417,400 businesses in the United States are owned by women of color. While that number might sound massive, it’s quite low considering how many businesses are owned by white women. This disparity is also relevant when it comes to annual revenue. Of the $1.9 trillion made by women-owned businesses in 2019, firms owned by women of color only accounted for $422.5 million.
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From 2007 to 2018, businesses owned by women of color increased at a rate of 163%.
Specifically, the number of businesses owned by African American/Black women and Latina/Hispanic women grew at an exponentially fast rate.
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African American/Black female-owned businesses accounted for 21% of all women-owned businesses and entrepreneurship in 2019.
This percentage represents 2,681,200 businesses in total each earning an average of $24,000 annually instead of the average revenue of $142,900 amongst all women-owned businesses. The growth rate of African American/Black female-owned businesses has increased by 12% over the past year.
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Latina/Hispanic women represent 18% of all women-owned businesses and entrepreneurship as of 2019.
This equates to 2,346,200 businesses in total each earning an average of $50,900 annually as opposed to the average revenue of $142,900 among all female-owned businesses. The growth rate of Latina/Hispanic women-owned businesses has increased by 10% over the past year.
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Asian American women-owned businesses constitute 9% of all female-run businesses as of 2019.
There are 1,169,300 businesses in total owned by Asian American women that earn an average of $191,200 annually as opposed to the average revenue of $142,900 among all female-owned businesses. The growth rate of Asian American women-owned businesses has increased by 9% over the past year.
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Native American/Alaskan Native female-run businesses account for 1.4% of all female-owned businesses in 2019.
This percentage represents 180,300 businesses in total that earn an average of $68,500 yearly as opposed to the average revenue of $142,900 among all female-owned businesses. The growth rate of Native American/Alaskan Native female-operated businesses grew by 6% from 2018 to 2019.
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Native Hawaiian/Pacific Islander women-owned businesses represent 0.3% of all female-run businesses as of 2019.
There are 40,400 businesses in total owned by Native Hawaiian/Pacific Islander women that each earn average revenue of $69,500 yearly as opposed to the average revenue of $142,900 among all female-owned businesses. The growth rate of Native Hawaiian/Pacific Islander women-owned businesses grew by 10% in the last year.
Women Entrepreneurs and Business Owner Location Statistics
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The states with the most women-owned businesses, employment, and revenue (also known as ‘economic clout’) are Georgia, Oregon, Idaho, Nevada, and South Dakota
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The cities with the most women-owned businesses, employment, and revenue (also known as ‘economic clout’) are Detroit, Charlotte, Atlanta, Austin, and San Antonio.
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The states with the least women-owned businesses, employment, and revenue (also known as ‘economic clout’) are Louisiana, Oklahoma, Nebraska, Alaska, and North Dakota
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The cities with the least women-owned businesses, employment, and revenue (also known as ‘economic clout’) are St Louis, Hartford, Milwaukee, Boston, and Providence
Obstacles Women Face When Starting a Business
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Women-led startups only received 2.3% of venture capital funding in 2020.
When it comes to building a successful business, funding can be the deciding factor. One of the major difficulties for women in business today is funding limitations. Getting a business off the ground is about more than just passion; it’s about capital.
Unless a business founder has hundreds of thousands in disposable income, they’ll likely need to secure funding to get their company off the ground.
Female-owned businesses receive an average of $59,857 in funding, which is 2.5 times less money than male businesses are granted in loans on average. Receiving fewer financing opportunities or lower loan amounts can greatly hinder the success of female-owned businesses.
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In the 1970s, women-owned less than 5% of businesses in the US.
Many engrained social expectations go along with being a woman in our society. Women are expected to be nurturing caretakers who often manage a household on top of their professional life.
This perception of what a woman “should be” doesn’t offer much room for business ownership. It was only 50 years ago that these social expectations were so powerful that they kept nearly all women from getting involved in entrepreneurship.
While the climate for female-owned businesses is much improved today from the 1970s, these damaging gender expectations and stereotypes persist and make being a female entrepreneur much more difficult.
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Women of color only account for 50% of female-owned businesses.
Women’s experience in the business world is often spoken about as an overarching concept, but the obstacles of starting a company or being an entrepreneur can be even more difficult for women of color. This is made evident when considering that white women own half of all women-owned businesses.
Alternatively, Latina/Hispanic, African American/Black, Asian American, Native American/Alaskan Native, and Native Hawaiian/Pacific Islander women make up the other 50% of female-owned businesses. Statistics also show a huge gap between the revenue of businesses owned by white women versus women of color.
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Women couldn’t independently take out a business loan without a man until 1988.
Founding a business is a scary notion for anyone to grapple with, but it can be an especially prominent obstacle for women.
One of the common fears that come with starting a business is the very likely result of failure. Since it was only recently that women were entrusted to own their own businesses, those fears of failure can feel even heavier.
In a society that’s told women for centuries that they simply can’t, it takes a long time to get past that insecurity of possibly failing. Being fearful of failing is still one of the biggest struggles that women face when starting a business.
Female Entrepreneurship and Women-Owned Businesses FAQ
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What proportion of businesses in the United States are owned by women?
42% of all businesses in the United States are owned by women. This demonstrates an enormous leap in market control over the past 20 years. In the past six years alone, the number of women-owned businesses has risen 20%.
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How many people work for women-owned businesses?
There are approximately 9.4 million people employed at the nearly 13 million businesses owned and operated by women. Employment at women-owned establishments grew by 8% from 2018 to 2019.
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What percentage of female-owned businesses are run by women of color?
Within the realm of female-owned businesses, just under 50% of these firms are owned by women of color. This means that more than half of all female-owned businesses are founded by white women.
African American/Black women control 21% of the businesses that are owned by women of color. Latina/Hispanic women own 18% of female-operated businesses, and Asian American women run 9% of American female businesses.
Native American/Alaskan Native women represent 1.4%, and Native Hawaiian/Pacific Islander women account for just 0.3% of all female-owned businesses.
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What is ‘economic clout’?
Economic clout is a metric employed by the American Express ‘2019 State of Women-Owned Businesses Report’ to rank geographical locations on the growth rates of women-owned businesses according to the number of businesses, employment numbers, and revenue.
A state or city’s economic clout score tends to follow that area’s overall economic growth as measured by the GDP.
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Are we living in a better time for women to start a business or become an entrepreneur?
The answer to this question is an unequivocal “YES,” but it’s still important not to become complacent in that reality. Compared to 50 years ago, the world of business and entrepreneurship has become increasingly more accessible to all women.
There have been legislatures that protect women’s rights to secure loans for their businesses on their own, and the overall perspective of female entrepreneurs in the United States has become more positive.
With that being said, there is still a lot of room for improvement regarding accessibility and growth for women-owned businesses.
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What percentage of businesses are started by women?
16% of businesses are started by women. Only 16% of startups had at least one female founder, and just 2.5% had only female founders.
However, women own 42% of small businesses in the U.S., so while there weren’t necessarily a significant number of women starting businesses that year, women still make up almost half of small business owners in the country.
The number of female entrepreneurs has been and is continuing to go up as well, as there has been an increase of 114% over the last 20 years, and the number of women-owned small businesses went up by 58% during the eleven-year span between 2007 and 2018.
As of 2019, there are 12.9 million businesses owned by women, a significant increase from the mere 402,000 female-owned companies that existed in 1972.
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Are women entrepreneurs more successful than men?
No, women entrepreneurs aren’t more successful than men. While this isn’t true in every case or from every point of view, it is true from the perspective of how much revenue female-owned businesses earned versus their male-owned counterparts.
As of 2018, male-owned businesses earn $3.2 million in revenue every year, while female-owned businesses only earn $1.6 million. However, this is quickly shifting, as the revenue women-owned businesses earn increased by 21% since 2014, and the overall revenue growth rate has only gone up by 9%.
Just because businesses owned by women don’t usually make as much revenue as those owned by males doesn’t mean those female entrepreneurs are always less successful than male entrepreneurs.
This is especially true since women-owned startups only received 2.3% of all venture capital funding in 2020 and the fact that women had to work to catch up to men since the 70s when women-owned less than 5% of U.S. businesses (now they own 43%, and number of female entrepreneurs has increased by over 30% since 2007).
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What percent of CEOs are female?
7.4% of Fortune 500 CEOs are female. In addition, women hold just 8.2% of all leadership positions at Fortune 500 companies.
As far as management positions go (not just Fortune 500 companies), women hold 35% of these across the workforce. While this is a higher percentage than at Fortune 500 companies, it’s still far lower than the over 50% of the workforce that females account for.
Around the world, women hold just 23% of executive and 29% of senior management positions, while they hold 42% of professional and 47% of support staff positions.
The industries that see the highest rates of female leaders are human resources, with about 75% of its leaders being female, education and social services with 41%, healthcare with 41%, and hospitality with 33%. The lowest rates of female leaders are found in the mining/quarrying, construction/real estate, and transport industries.
Conclusion
It’s undeniable that the climate for female-owned businesses has taken a turn for the better. Over the past 50 years, women-run businesses have gone from practically nonexistent to accounting for over 40% of all companies in the United States.
Only 30 years ago, women gained the right to receive a business loan without a male co-signer through the Women’s Business Ownership Act of 1988, and the presence of women-run businesses has flourished ever since.
This act allowed women to move comfortably through the business world to form their firms without adhering to outdated and discriminatory rules that inhibited their access to capital. That sounds like a huge step for entrepreneurial women, and it has been.
Over the past 20 years, there has been a 114% increase in female entrepreneurs, which is an amazing and hope-provoking statistic. However, there are still more strides to be made.
Though women no longer need a man to receive a business loan, women entrepreneurs still receive 2.5 times less funding than male-operated businesses. Women-owned startups only received a little over 2% of all the venture capital funding in the United States in 2020, a drop from the previous year.
Additionally, these difficulties are even more troublesome for women of color, who continue to represent only half of all female-owned businesses and often report lower average revenue than women-led companies as a whole.
Regarding statistics about women-owned businesses, the data shows promising progress over the past two decades, but more improvements are still required to level the playing field.
References
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American Express PDF Report. “The 2019 State of Women-Owned Businesses Report”. Accessed on August 12, 2021
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www.census.gov. “Women Business Ownership in America on the Rise”. Accessed on August 12, 2021
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www.score.org. “The State of Women Entrepreneurs”. Accessed on August 12, 2021
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www.startupusa.org. “The Ascent of Women-Founded Venture-Backed Startups in the United States”. Accessed on August 12, 2021
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www.legaljobs.io. https://legaljobs.io/blog/women-entrepreneurs-statistics/. Accessed on August 12, 2021
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American Express PDF Report. “The 2018 State of Women-Owned Businesses Report”. Accessed on August 12, 2021
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www.wbenc.org. “Behind the Numbers: The State of Women-Owned Businesses in 2018”. Accessed on August 12, 2021
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www.cdn.advocacy.sba.gov. “Small Business Facts: Spotlight on Women-Owned Employer Businesses”. August 12, 2021
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www.nawbo.org. “Women Business Owner Statistics”. Accessed on August 12, 2021
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www.pewresearch.org. “Women CEOs in Fortune 500 Companies, 1995-2020”. Accessed on August 12, 2021
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www.hbr.org. “Women-Led Startups Received Just 2.3% of VC Funding in 2020”. Accessed on August 12, 2021
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www.forbes.com. ‘The Current of Women Entrepreneurial Leaders”. Accessed on August 12, 2021
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www.fundera.com. “State of Small Business Lending: Spotlight on Women Entrepreneurs”. Accessed on August 12, 2021
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www.news.crunchbase.com. “EoY 2019 Diversity Report: 20 Percent Of Newly Funded Startups In 2019 Have A Female Founder”. Accessed on August 12, 2021
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www.smallbiztrends.com. “The History of Women Entrepreneurs (INFOGRAPHIC)”. Accessed on August 12, 2021
Author
Sky Ariella is a professional freelance writer, originally from New York. She has been featured on websites and online magazines covering topics in career, travel, and lifestyle. She received her BA in psychology from Hunter College.
