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Women-owned businesses continue to fuel the economy and now represent 42 percent of all businesses — nearly 13 million — employing 9.4 million workers and generating revenue of $1.9 trillion, according to an annual State of Women-Owned Businesses Report, commissioned by American Express.
In 2019, U.S. women with diverse ethnic and geographic backgrounds started an average of 1,817 new businesses per day between 2018 and 2019, down only slightly from the record-setting 2018 number of 1,821.
The annual report, based on U.S. Census Bureau data adjusted by Gross Domestic Product data, found that women-owned businesses continue to trend above all businesses. Over the past five years:
• The number of women-owned businesses increased 21 percent, while all businesses increased only 9 percent.
• Total employment by women-owned businesses rose 8 percent, while for all businesses the increase was far lower at 1.8 percent.
• Total revenue for women-owned businesses also rose slightly above all businesses: 21 percent compared to 20 percent respectively.
“The face of entrepreneurship is evolving to include all women, regardless of demographics. Even more impressive is that women are starting businesses on their own terms, whether it be their full-time focus or a part time activity,” said Courtney Kelso, senior vice president of American Express. “The economic impact of women-owned businesses is undeniable, from the trillions they contribute via revenue to the millions of jobs they provide. We are committed to backing these women entrepreneurs because when they win, we all win.”
The report examines how part-time entrepreneurship, often referred to as “sidepreneurship,” is providing additional options to traditional employment and entrepreneurship for women.
Over the last five years, growth in the number of women sidepreneurs has grown at a rate that is nearly twice as fast as the overall growth in female entrepreneurship: 39 percent compared to 21 percent, respectively. Minority women are responsible for a large portion of that growth from 2014-2019 where we see sidepreneurship among minority women-owned businesses two times higher than all businesses: 65 percent compared to 32 percent, respectively.
In almost every category, women of color are leading the women-owned business charge, the report said. Women of color represent 39 percent of the total female population in the U.S. but account for 89 percent of the net new women-owned businesses per day (1,625) over the past year. While the number of women-owned businesses grew 21 percent from 2014 to 2019, firms owned by women of color grew an astounding 43 percent and African American women-owned firms grew even faster at 50 percent.
As of 2019, women of color account for 50 percent of all women-owned businesses. An estimated 6.4 million women of color-owned businesses employ nearly 2.4 million people and generate $422.5 billion in revenue. But, even as new minority-owned businesses are opening, the revenue disparity is increasing. In 2014, minority-owned businesses averaged $67,800 in revenue; by 2019 the average had dropped to $65,800, a decline of 3 percent, according to the report.
The report estimates that if revenues generated by minority women-owned firms matched those currently generated by all women-owned businesses, they would add four million new jobs and $981 billion in revenues to the U.S. economy.
The report said over half of all women-owned businesses are concentrated in three industries:
• Other services (e.g., hair and nail salons and pet care businesses) accounted for 22 percent of all women-owned businesses (2.8 million firms).
• Healthcare and social assistance (including child day care and home healthcare services) accounted for 15 percent of all women-owned businesses (1.9 million firms).
• Professional/scientific/technical services (including lawyers, bookkeepers, architects, public relations firms and consultants) accounted for 13 percent of all women-owned businesses (1.6 million firms).
While these industries have the most women-owned businesses, they don’t produce the most revenue. The three industries in which women-owned businesses have the highest total revenue are wholesale trade (17 percent), retail trade (14 percent) and professional, scientific and technical services (10 percent).
The 2019 State of Women-Owned Businesses Report is based on data from the U.S. Census Bureau Survey of Business Owners (SBO), which is conducted every year in years ending in two and seven. Data from the 2012 Census surveys were collated, analyzed and extrapolated forward to 2019, factoring in relative changes in Gross Domestic Product (GDP) not only nationally but also at industry, state and metropolitan statistical area levels. All GDP data was obtained from the U.S. Bureau of Economic Analysis (bea.gov).
For detailed information on the Survey of Business Owners, visit the U.S. Census Bureau’s American FactFinder web portal: http://factfinder.census.gov/ faces/nav/jsf/pages/index.xhtml.