Female entrepreneurship has made great strides over the past 20 years, but we’ve got miles left to go, and many challenges to face along the way. In spite of these challenges, women entrepreneurs report a high level of well-being and express optimism for the future.
Portrait of the female business owner
American women who own businesses are an increasingly diverse group of educated women. A majority of them are college educated, and women of color own 71 percent of the new women-owned businesses launched every day.
Women’s motivation for launching into entrepreneurship may also be shifting. During the recession, necessity drove many women to start businesses. By contrast, most of today’s women entrepreneurs are fueled by a desire to pursue their passions.
Female entrepreneurship is on the rise
A study commissioned by American Express shared some inspiring stats about the rise of female entrepreneurship.
Between 1997 and 2017, the number of women-owned businesses increased by 114 percent, a rate 2.5 times higher than the national average.
The net result?
Last year, 11.6 million U.S. businesses were women owned. They employed nearly 9 million people and generated more than $1.7 trillion in revenue.
There are miles left to go
While there’s no question that female entrepreneurship has made impressive gains, there are miles left to go.
Although women-owned firms represent 39 percent of all businesses, they’re responsible for only 8 percent of employment and 4 percent of revenues.
The American Express report argues that, if employment and revenues kept pace with the number of women-owned firms, then women would be making an even larger contribution to the economy.
Fair enough, but do women business owners face bigger challenges than their male counterparts? And do economic metrics give the whole picture as a measure of success for female entrepreneurship? We’ll examine these two questions next.
Women business owners face hurdles
Like all entrepreneurs, women business owners face many challenges. The one most commonly cited is a lack of funding. Indeed, studies have shown that men are almost twice as likely as women to raise $100,000 or more in funding.
Women business owners are also twice as likely as men to cite a lack of a support system as a hurdle to business ownership. That may be why women are more likely than men to work a “second shift” in the evening.
Women business owners also feel impeded by a lack of available mentors or advisors. Since entrepreneurs with access to a mentor are more likely to start a business and see it thrive, this challenge can’t be overlooked.
Finally, whether it’s due to insufficient funds or to a lack of employees, women owners are far more likely to run their businesses from home. Although working from home offers up many advantages, it also presents many potential pitfalls to navigate.
The outlook is bright
In spite of the challenges, women with established businesses rate their well-being almost three times higher than women who aren’t entrepreneurs, and 1.6 times higher than their male counterparts. And 78 percent of female entrepreneurs believe they’ve achieved work-life balance.
It’s no wonder, then, that they feel optimistic about the future of women-owned businesses.