by Julie Weeks, CEO of Womenable.
"Many of us have heard the drumbeat – that the number of women-owned firms is growing faster than the national average (1-1/2 times the overall rate over the past 15 years). It sends a strong message that more and more women have the dream – and the skills – to launch their own enterprises. However, despite this positive news, as well as the fact that growth in the revenue and employment of those firms exceeds all but the very largest publicly-traded companies, we also know that women-owned firms remain smaller than average.
New insights – and a lot of recent socialmedia commentary – can be found in The State of Women-Owned Businesses Report: A Summary of Important Trends, 1997-2012. This report was commissioned by American Express OPEN. The basic facts are these: 8.3 million women-owned firms employ nearly 7.7 million workers and generate revenues approaching $1.3 trillion. There’s been a 54% increase in the number of women-owned firms since 1997, compared to a 37% increase in all firms. Yet, while women-owned firms comprise 29% of all U.S. businesses, they contribute just 6% of employment and 4% of revenues.
The most interesting insights from the report focus on where women-owned firms are faltering on their growth journey. We found that the growth in the number of women-owned firms dips as they reach the five employee and the $250,000 revenue marks. Compared with firms both larger and smaller, growth rates are significantly lower in the 5 to 9 employee and $250,000 to $499,999 revenue ranges – and these “growth potholes” have remained consistent over time. What’s happening here? For many business owners, this is the point at which they need to put management systems in place, such as writing employee handbook and offering formal benefits. This is also when an entrepreneur needs a mindset shift from “chief cook and bottle washer” to CEO, delegating more decision-making power to others. Only 2% of women-owned firms employ 10 or more workers and only 4% exceed $500,000 in revenues (compared to 5% and 11%, respectively, of men-owned firms). While we should celebrate the increasing numbers of women getting into business, shouldn’t we also provide more support to them as they approach these critical growth stages? Helping more women navigate past these potholes could speed their way toward faster growth and greater success – and help our national economy in the process."
Julie R. Weeks is President and CEO of Womenable, and the author of the American Express OPEN-sponsored report.
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