Women-owned Firms Growing in the Business Sector
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UPDATED: Apr 8, 2013
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Female-owned businesses are the second fastest growing business sector in the country, according to a 2013 report by American Express OPEN.
The 2013 State of Women-Owned Businesses Report found that women trail only behind publicly-traded firms in regards to business growth since the Great Recession. Since 2007, women-owned businesses added 175,000 net jobs, in comparison to a national net decline of 569,000 jobs among all privately-held firms.
Women-owned businesses have seen steady growth for over 16 years. Between 1997 and 2013, the number of women-owned businesses grew 50 percent faster than the national average.
Julie Weeks, research advisor to American Express OPEN, said that many women-owned firms have a slow and steady mentality for their businesses. Because these firms do not grow or decline as fast as their male counterparts, they have weathered the recession better than other privately-held firms.
The strength of women-owned businesses helps to stabilize economic revenue. The 8.6 million women-owned businesses in 2013 generate about $1.3 trillion in annual revenue and employ 7.8 million people.
Successful businesses are able to apply for more business loans to gain additional capital, which can stimulate growth in the company.
“Capital is the lifeblood of any business, so increased access to capital will most certainly fuel the growth of women-owned firms,” Weeks said to loans.org.
When business owners take on new business loans, it allows them to add new equipment and employees, which can enable their business to expand its client database or to enter new markets.
“One of the most important challenges … is having the confidence to grow and take the next step to enter into new markets and seek new customers,” Weeks said.
Not only did overall women-owned businesses grow, but so did minority women-owned businesses. Between 1997 and 2013, African American women-owned businesses grew 258 percent, Native Hawaiian/Pacific Islander increased 216 percent, Latina grew 180 percent, Asian American increased 156 percent and Native American/Alaska Native grew 108 percent.
The report also found geographic trends for business growth.
In the past 16 years, states with the fastest growth in the number of women-owned firms are Georgia, Texas, North Carolina, Louisiana and Nevada. The top five metropolitan areas with the highest combined economic power for women-owned firms are San Antonio, TX; Portland, OR; Houston, TX; Riverside, CA and Washington, DC.
“The South has experienced the largest population increases over the past decade or more, so it stands to reason that there would be larger increases in businesses in parallel with that demographic trend,” Weeks said.