Women Starting Small Businesses at Torrid Pace
If you go to work for a newer business, there's a good chance you'll be working for a woman.
Women are starting companies at a torrid pace. Between 1997 and 2014, the number of women-owned businesses in the U.S. rose by 68 percent, twice the growth rate for men and nearly one and a-half times the rate for all companies, according to an American Express analysis of Census Bureau figures. They are starting an estimated 1,288 companies each day, up from 602 in 2011-12, American Express says.
"Women are becoming more aware of the opportunities for entrepreneurship in their lives. It's becoming more of an option for a career move than it ever has been in the past," says Susan Duffy, executive director of the Center for Women's Entrepreneurial Leadership at Babson College.
The number of new businesses started by women and men has increased in part because of the difficult job market since the recession. But the numbers of women business owners will keep rising as interest in entrepreneurship grows and younger women look to famous women as their role models, Duffy says.
Some of those inspirations: Oprah Winfrey, designers Tory Burch and Diane Von Furstenberg and Weili Dai, co-founder of chip maker Marvell Technology. The current head of the Small Business Administration, Maria Contreras-Sweet, and her predecessor, Karen Mills, have both been business owners.
"More women are seeing themselves out there in their heroes in the business world. They're saying, this is fabulous, I want to be like her," Duffy says.
Their role models also include less prominent successful women in business.
One of Summer Scarbrough's inspirations has been her mother, Elizabeth, a former executive with a medical devices company. The Scarbroughs own VinniBag, a seller of travel bags for wine and other bottles.
"I knew from a very young age that she was one of the only women in her company at that level," says Scarbrough, whose five-year-old company is based in Ventura, California.
Being a woman business owner is no longer as novel or unusual as it was decades ago.
"I know a lot of women who are starting things as well," Scarbrough says.
The growing number of resources for women business owners, including the SBA-sponsored Women's Business Centers and women's business organizations are also encouraging women to start companies, according to Duffy.
But women owners aren't carbon copies of men. They tend to be more optimistic than their male counterparts, according to a survey released this week by Bank of America.
Seventy percent of the women owners surveyed expect their revenue to rise over the next year, compared to 66 percent of men. Fifty-six percent of women plan to hire in the next year, compared to 50 percent of men. And 68 percent of women plan to expand their companies; 63 percent of men have such plans.
The survey also found women owners may face different challenges than men. Twenty-nine percent said they feel they have less access to money than men, and 32 percent said they have less access to new business opportunities.
A woman entrepreneur is most likely to start a company that provides educational services, administrative or waste management services or is involved in the arts, entertainment or recreation, the AmEx survey said. And nearly one in three women-owned companies is owned by a minority. The number of businesses owned by minority women has climbed to 2.9 million this year from just under 930,000 in 1997, a 215 percent increase. During that time, the number of companies owned by minority men has more than doubled to nearly 3.7 million from 1.7 million.