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Women-owned businesses have grown by leaps and bounds, according to a new American Express OPEN study, finding that the number of business run by women has more than doubled in the past two decades – growing at a rate that is two and half times quicker than the national average.
What does that mean in dollars and cents? There are 11 million women-owned businesses in the United States, providing employment for just about nine million people, creating $1.7 trillion in earnings.
The seventh annual State of Women-Owned Businesses report also found that every day 849 new businesses are founded by women, which is up 3% from 2016. “We're encouraged to see the amount of female-owned businesses in the U.S. has more than doubled in twenty years,” said Susan Sobbott, President of American Express Global Commercial Payments.
“Championing women-owned businesses strengthens our economy, individual communities and helps inspire the next generation of female entrepreneurs,” she said. Over the last 12 months, three industries have shown the most growth when it comes to women-owned businesses:
- Construction 15%
- Arts, entertainment & recreation 12%
- Other services 12% (hair salons, nail salons, pet care businesses, etc.)
Entrepreneurship and women of color
Entrepreneurship has been in the cards for women of color over the past two decades, opening their own businesses at an accelerated pace. In general, the number of women-owned businesses has increased 114% between 1997 and 2017, while the rate at which businesses owned by women of color has gone up by 467%.
They also make up just about half (46%) of all the businesses owned by women, and they have more than two million people working for them, with their annual revenue hitting $361 billion annually.
As of this year, there are:
- 2.2 million African American, women-owned firms
- Just about 2 million Latina-owned businesses
- 1 million Asian American women-owned companies
- 161,500 Native American/Alaska Native women-owned enterprises
- 34,200 Native Hawaiian/Pacific Islander women-owned firms
It is not just about location
In real estate, they say it's all about location, but for women-owned businesses, success is not just about where they are located. As expected, states with a lot of people, including California, Florida, Texas, New York and Georgia, have bigger rosters of women-owned business, but rural states are holding their own when it comes to the growth rates of women-owned businesses too.
The study took a close look at economic clout, which meant not only determining the growth rate in terms of the number of firms but also upswings in employment and revenues. Using this criteria they found the top five states where women upped their economic impact in the last 20 years.
These states are:
- District of Columbia
- South Dakota
- North Dakota
The top cities and areas:
- Charlotte-Concord-Gastonia metro area, NC/SC
- San Antonio, TX
- Austin, TX
- Indianapolis, IN
And Riverside, CA and Salt Lake City, UT tied for fifth place.
The 2017 State of Women-Owned Businesses Report was created using data from the United States Census Bureau Survey of Business Owners (SBO). This census survey is conducted every five years.