In economic circles, many business owners discuss the crucial impact that women have on the economy, especially in the decade since the financial crisis. While many larger businesses—more typically owned by men—have struggled to thrive, smaller businesses—often owned by women—have been opened to fill a niche, or have expanded into new opportunities.
Women owned businesses continue to grow and expand, facing new challenges in the business sector, and bringing new strength, not just to the American economy, but to the lives of women around the world.
It is important to note that in the United States, the percentage of businesses owned by women who are also marginalized in other was (generally women of color) has been the fastest-growing segment of businesses owned by women. This is likely due to attempts to level the playing field for both women and minorities that have been put in place by the Small Business Administration.
Economic Impact of Businesses Owned by Women
In the United States, women-owned businesses earned almost $3 trillion dollars, while being responsible for 16% of all American jobs, around 23 million. This is a huge number of employed people and businesses, and these numbers are continuing to grow.
What is particularly interesting about these statistics is that those 23 million jobs exist when just 20% of the overall firms owned by women are employers. 80% of the women-owned businesses in the United States are run entirely by the business owner. This can be due to a lack of mentorship, difficulty accessing capital funding, or other societal hurdles to business growth. But that percentage might be the easiest place to push economic growth that would benefit the overall economy.
After all, if poor capital funding and venture capitalism is holding back businesses owned by women, then giving women better access to these things will help their businesses thrive. This will increase the number of jobs they create, which will drive more dollars back into the economy.
Family Impact of Woman Owned Businesses
In many spheres, women owned businesses are often considered as inherently lesser than those owned by men. This may be because these businesses are often in the service sector (cleaning, elder or nursing care, professional services) or simply an outgrowth of the societal tendency to view women’s interests as feminine and therefore different.
Yet according to the Washington Post, businesses owned by women are the primary source of income in more than 40% of all households. For four out of 10 families, the businesses that are owned and run by women pay rent, buy food, and pay the bills. This is a clear indication that businesses owned by women are to be taken seriously. After all, those dollars spent go back into the local economy, buying all the products that keep the local community strong and vibrant.
In international markets, it has also been observed that increasing women’s income more directly benefits the local economy. This has been attributed to the tendency of women to buy more staple goods, while men choose to spend their additional cash on more luxury goods. This same effect can be seen to a lesser degree in the United States.
What Do Women See for the Future of Their Businesses?
In early 2017, Bank of America surveyed women business owners about their feelings on their businesses, the economy in general, and where they saw things going in the future. In general, women were optimistic about the ongoing growth and recovery of the economy.
This is great news. When business owners are hopeful about where the economy is going, they tend to act in different ways. They hire more, they buy more inventory, they look to grow their businesses. They are more likely to pursue capital funding and business expansion. Since there is so much room for growth in businesses owned by women, very small increases can have a dramatic impact.
The more successful women there are in the world of business, the more successful women there will be in the world of business. As women gain more respect and power in the workplace, they will continue to carve out space in boardrooms, venture capital spaces, and chambers of commerce. They will mentor other up and coming women, and help those women also grow and expand their businesses. The very presence of women in these previously male dominated spheres will continue to change how women owned businesses are perceived.
Women are a strongly growing segment of the business world, and businesses owned by women are both a powerful force in the current market, and ripe for increased expansion.
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