1—Best Cities for Women to Start a Business
- California had the most cities on the list, with 5 metro areas appearing in the top 50.
- 4 metro areas from Florida made the list.
- Memphis ranked last, due to its low percentage of existing women-owned businesses and its high unemployment rates for women.
- The St. Louis area has the highest percent of female-owned businesses (30%), while the Minneapolis-St. Paul area has the lowest percentage of female unemployment (just 3.5%)—making them both great options for aspiring entrepreneurs.
Check out the map below showing the best places for women to start their businesses.
2—Women Business Owners Are Optimistic
Women business owners are optimistic about their business’s future and have ambitious growth plans, according to the just 2019 Bank of America Women Business Owner Spotlight, the fourth annual study exploring women entrepreneurs’ goals and challenges.
The women business owners surveyed are more likely than male entrepreneurs to plan to hire, expand or apply for a loan in the next 12 months.
- 84% of the women expect their revenues to grow
- 52% expect their local economies to improve
- 47% expect the national economy to improve.
Over the next 12 months, their biggest concerns are:
- 58% of the women surveyed say they don’t have the same access to capital as their male counterparts, even though they believe access to capital has improved over the past 10 years
- Only 34% think women business owners will gain equal access to capital. On average, they believe it won’t happen until 2033.
- 24% of the women surveyed don’t think women will ever have equal access to capital.
- Part of the problem—54% of men entrepreneurs surveyed think women business owners already have equal access to capital
What kind of help do women want? The survey offered several societal changes that could occur in the next five years, and asked respondents which one would have the biggest effect on leveling the playing field for the next generation of women entrepreneurs.
- Having more women in powerful positions of influence 35%
- Pay equity 22%
- Creating stronger networks of women 12%
- Redefining gender norms 10%
- Achieving equal access to capital 8%
You can read more about it in my blog post.
Bank of America also supports the economic empowerment of women through programs such as the Tory Burch Foundation Capital Program and the Global Ambassadors Program, a partnership between Vital Voices and Bank of America.
3—The Continued Success of Women-Owned Businesses
Women-owned businesses continue to fuel the economy and now represent 42% of all businesses—nearly 13 million—employing 9.4 million workers and generating revenue of $1.9 trillion. According to the annual State of Women-Owned Businesses Report, commissioned by American Express, in 2019, these U.S. women with diverse ethnic and geographic backgrounds started an average of 1,817 new businesses per day in the U.S. between 2018 and 2019, down only slightly from the record-setting 2018 number of 1,821.
The annual report, based on U.S. Census Bureau data adjusted by Gross Domestic Product data, found that women-owned businesses continue to trend above all businesses. Over the past five years:
- The number of women-owned businesses increased 21%, while all businesses increased only 9%.
- Total employment by women-owned businesses rose 8%, while for all businesses the increase was far lower at 1.8%.
- Total revenue for women-owned businesses also rose slightly above all businesses: 21% compared to 20% respectively.
“The face of entrepreneurship is evolving to include all women, regardless of demographics. Even more impressive is that women are starting businesses on their own terms—whether it be their full-time focus or a part time activity,” says Courtney Kelso, Senior Vice President of American Express. “The economic impact of women-owned businesses is undeniable—from the trillions they contribute via revenue to the millions of jobs they provide. We are committed to backing these women entrepreneurs because when they win, we all win.”
Side-hustle: women entrepreneurs—the ultimate multitaskers?
As work trends shift towards side hustles and the gig economy, so does female entrepreneurship. This year’s report examines how part-time entrepreneurship, (“sidepreneurship”) is providing additional options to traditional employment and entrepreneurship for women.
Over the last five years, growth in the number of women sidepreneurs has grown at a rate that is nearly twice as fast as the overall growth in female entrepreneurship: 39% compared to 21%, respectively. Minority women are responsible for a large portion of that growth from 2014-2019 where we see sidepreneurship among minority women-owned businesses two times higher than all businesses: 65% compared to 32%, respectively.
Looking at specific minority groups over the last five years, entrepreneurship growth is up:
- 99% among African American women
- 70% among Native Hawaiian/Pacific Islander women
- 63% for Asian American women
- 46% for Latina/Hispanic women
- 36% among Native American/Alaska Native businesswomen
Women of color are starting businesses at a remarkable 4.5 times the rate of all businesses
In almost every category, women of color are leading the women-owned business charge. Women of color represent 39% of the total female population in the U.S. but account for 89% of the net new women-owned businesses per day (1,625) over the past year and 50% of all women-owned businesses.
While the number of women-owned businesses grew 21% from 2014 to 2019, firms owned by women of color grew an astounding 43% and African American women-owned firms grew even faster at 50%. As of 2019, about 6.4 million women of color-owned businesses employ nearly 2.4 million people and generate $422.5 billion in revenue. But, even as new minority-owned businesses are opening, the revenue disparity is increasing. In 2014, minority-owned businesses averaged $67,800 in revenue; by 2019 the average had dropped to $65,800, a decline of 3%.
African American women-owned businesses represented the highest rate of growth of any group in the number of firms between 2014 and 2019 as well as between 2018 and 2019. They started 42% of net new women-owned businesses, which is three times their share of the female population (14%).
Over half of all women-owned businesses are concentrated in three industries:
- Other services (e.g., hair and nail salons and pet care businesses) accounted for 22% of all women-owned businesses (2.8 million firms).
- Healthcare and social assistance (including child day care and home healthcare services) accounted for 15% of all women-owned businesses (1.9 million firms).
- Professional/scientific/technical services (including lawyers, bookkeepers, architects, public relations firms and consultants) accounted for 13% of all women-owned businesses (1.6 million firms).
While these industries have the most women-owned businesses, they don’t produce the most revenue. The three industries in which women-owned businesses have the highest total revenue are wholesale trade (17%), retail trade (14%) and professional, scientific and technical services (10%).
4—Women Entrepreneurs: Overcoming Challenges to Achieve Business Growth
Women who have built successful companies had to navigate significant gender-based obstacles and, in doing so, created alternate paths to success for themselves and similarly unstoppable female entrepreneurs, according to a new study of women entrepreneurs from Bank of America and Babson College. The study is part of a larger research collaboration between Babson’s Center for Women’s Entrepreneurial Leadership (CWEL) and Bank of America Private Bank.
Findings from the study were published in a new report, Beyond the Bucks: Growth Strategies of Successful Women Entrepreneurs.
“The research found gender-based barriers, such as misperceptions regarding market opportunities and access to traditional networks, are challenging, but none of these setbacks stopped these women from achieving success,” says Karen Reynolds Sharkey, business owner executive, Bank of America Private Bank. “By sharing their insights, we seek to support women entrepreneurs and enhance their business growth.”
Through the collective experiences of women entrepreneurs in this study, three key themes emerged relating to the challenges they’ve faced when growing their businesses:
- Market misperceptions: Women entrepreneurs’ competency and market knowledge is routinely disregarded, including market opportunities they identify.
- Network exclusion: Womenentrepreneurs often experience limited, gender-based, access to established social and business networks, creating less access to knowledgeable mentors and capital expansion.
- Managing expansion while underfunded:Barriers to start-up and growth capital create new, ongoing challenges, including constraints on funding for recruitment, access to new markets and overall expansion.
“Through this research, we identified several actionable strategies women entrepreneurs are using to turn the challenges they face into opportunities and grow their businesses,” says Lakshmi Balachandra, Ph.D., assistant professor, entrepreneurship at Babson College and the principal researcher on the project. “These include building on their skills and strengths and leveraging their personal insights for sustainable growth.”
Much of the focus on women-owned businesses to date has been on the gender gap in venture funding. This groundbreaking study looks at women who have led companies to the growth phase and identifies several strategies they deploy today and might enable other entrepreneurs to accelerate their business growth, including:
- Explore various capital alternatives.
- Build for the long term.
- Develop a sustainable and talented workforce.
- Buy from and fund women-owned businesses.
- Be a mentor, seek a mentor.
- Join or create new networks.
- Capitalize on personal insights and experiences.
You can go here for a full copy of Beyond the Bucks: Growth Strategies of Successful Women Entrepreneurs.
5—Challenges Women Entrepreneurs Face
More than half of women small business owners believe they overcame greater obstacles than their male counterparts, according to new research from a survey from OnePoll in conjunction with Groupon for National Women’s Small Business Month.
- More than half of women small business owners believe they overcame greater obstacles than their male counterparts.
- Half say they were held to a higher standard when trying to open their businesses.
- 71% say they had to go through unexpected challenges when they opened their businesses.
- Challenges included: balancing a business and family (54%), struggling to be taken seriously (48%), defying social expectations (31%), owning their accomplishments (25%) and access to capital (24%).
Check out the infographic below for more information.
6—Top 10 States for Women’s Access to Capital
Lendio, a leading marketplace for business loans, recently announced its list of Top 10 States for Women’s Access to Capital.
Several states not on the list saw a high percentage of growth in small business loans to women, including Nebraska, Wisconsin, Arkansas, Idaho and Hawaii. However, when the percentage of women taking on loans is weighted with the success rate in going from application to funding, South Dakota ranks No. 1 in the country. Montana, Vermont, West Virginia and Wyoming are the bottommost states when it comes to access to capital for women-owned businesses.
Even though 42% of American businesses are owned by women, according to the Lendio study, only 24% of the small businesses accessing capital in the last year were women-owned. This percentage is in line with a 2017 Federal Reserve report that shows women-owned businesses are more likely to experience credit shortfalls. However, as online lending continues to grow, so does the number of women-owned businesses taking advantage of it. In Q2 2019, the percentage of women-owned businesses borrowing money increased in 23 states. Nationally, the percentage of female borrowers increased by 6.7% over the previous three-quarter average.
“Women-owned businesses are a vital and growing part of our economy,” says Brock Blake, CEO and founder of Lendio. “This list of top states for women’s access to capital reminds us how critical it is for online lenders to step in and bridge the gender credit gap that has existed for years.”
7—Guide for Entrepreneurial Women
Reliant Funding, a leading small business finance provider, recently released a comprehensive guide for businesswomen to “serve as a unique all-in-one resource for female small business owners to support their development and growth.”
The Complete Women Business Owner Resource Guide includes resources on small business certification, advice on human resource matters, an overview of available funding tools and guidance from trailblazing women leaders. Some of the guide’s contributors include Jeanette Armbrust, Board Chair of the National Association of Women Business Owners and me.
Prior to releasing the Guide, Reliant announced its partnership with the National Association of Women Business Owners (NAWBO) organization. As a part of the partnership, Reliant Funding is providing its qualified customers an annual membership to the organization in order to bring awareness to the importance of having access to networking as well as capital to grow a successful business.
8—Differences Between Female and Male Entrepreneurs
In not really surprising news, women business owners have significant differences from their male counterparts, according to the State of Small Business survey from Guidant Financial.
- 25% of female small business owners are African-American. Only 14% of male small business owners are African-American.
- Women entrepreneurs skew younger than their male counterparts
- 52% of females surveyed were over the age of 50, compared to 59% of men.
- 29% of females surveyed were between 40 and 49, compared to 24% of men.
- 19% of females surveyed were under the age of 40, compared to 17%of men.
- Women are 48% more likely to be concerned about the effects of the political climate on small business than men.
- Female ownership in health, beauty, and fitness businesses increased 55% year over year, while food-related businesses and restaurants increased by 45% year over year.
- The most popular industries for women-owned small businesses:
- Health, beauty, and fitness; Food-related and restaurant; Business services; general retail; education
- 36% of women small business owners use cash to get their business off the ground, compared to 32% of men. Funding from friends and family is the next most popular form of financing for women, at 17% compared to men’s 11%.
- Women are more interested in starting new businesses or franchise locations instead of purchasing pre-established businesses of franchise locations, with 58% of women starting their business from scratch.
- The profitability of woman-owned businesses is up by 3% from the prior year but still lags behind male-owned businesses. 71% of female-owned businesses reported profitability, compared to 80% of male-owned businesses.
- #1 motivation for opening a business: “wanted to pursue my own passion” followed by “ready to be my own boss”
9—State of Small Business Lending: Is the Gender Gap in Funding Closing?
Women entrepreneurs are making waves in the small business world. According to historical and projected data from the U.S. Census Bureau, the number of women-owned businesses increased by 58% between 2007 and 2018, at a rate nearly five times higher than the overall average. During this time period, women-owned businesses also displayed growth in hiring and revenue.
Despite this progress, women entrepreneurs still face obstacles when starting a small business. Clients and vendors often don’t take female business leaders as seriously as their male peers. Women have more pressure to balance family and business obligations. They also face more challenges in accessing funding. In this State of Small Business Lending report from Fundera, they looked into the availability and cost of small business loans for women-owned businesses.
This isn’t the first time Fundera has examined the topic. In their first report on women and small business lending, (data from February 2014 to June 2016), they found women business owners requested less funding, got approved less often, received smaller loan amounts, and paid more for financing than men. In the next report, (data from June 2016 to September 2017), things had improved somewhat. In certain product categories, women entrepreneurs received similar loan amounts and lower interest rates than men.
In this report, covering data through June 2019, they found continued gains for women entrepreneurs in terms of loan amounts and cost of financing—across all of Fundera’s loan categories. However, there still specific areas that need improvement, including women’s access to funding.
- The gender gap in funding amounts and cost is closing. In the second quarter of 2019, both men and women received an average loan size of approximately $42,000, despite women requesting less funding. Across all loan categories, women business owners received interest rates on average three percentage points lower than men.
- Women still have less access to funding and report lower financials. Despite the fact that women secured similar funding amounts as men, men entrepreneurs were 20% more likely to receive a loan. Women entrepreneurs also reported lower business revenues and profits compared to men.
- Women and men use funding for different purposes. Women were more likely to use financing for debt refinancing/consolidation and business expansion, whereas men were more likely to finance the purchase of equipment. Female loan recipients were more active in industries that have lower profit margins.
Women and Small Business Lending: Where Do We Go From Here? There is good news in the current State of Small Business Lending. Women who are approved for funding receive similar funding amounts as men and lower interest rates. They also qualify in larger percentages than men for loans with longer repayment terms. But women still report lower business revenue and profit, and the biggest obstacle of all continues to be access to funding. Fewer women apply for funding, women ask for less money, and men are 20% more likely to be approved for a loan than women.
Fundera says there are clear ways to increase funding access for women entrepreneurs. Women should try to secure funding at the earliest possible moments for their business, in order to jumpstart growth. They can also diversify into industries with higher revenue and profit margins. They should stay focused on building and retaining good credit. And in-person lenders, particularly banks, can do a better job of protecting loan approval and underwriting processes from bias.
You can read the whole report here.
10—For Mompreneurs Running a Business is Less Daunting than Starting It
Starting and running a business may be less difficult than aspiring mompreneurs think, according to a survey released by PicMonkey, a leading cloud-based image editing and design platform. Many mompreneurs don’t start a business because of the perceived challenges, such as lack of time and financial risk. The survey probed the reasons why women start their own business, the key challenges they face, and the benefits of being a mompreneur.
The survey revealed disparities in attitudes between dreamers and doers, and variations by age cohort:
- Nearly 80% of dreamers are concerned about the financial investment associated with starting a business, but only 57% of doers actually experienced this obstacle
- 70% of dreamers believe they won’t have enough time to run a business, while 47% of doers actually struggle with time management
- About 75% of dreamers are concerned about monetizing their products/ services, vs. 60% percent of doers
- When it comes to marketing channels, 79% of the younger mompreneurs(aged 18-24) cite Instagram as the most important, while Facebook and having a website rank highest among the older age groups.
- Respondents were uniform in describing the advantages of being a mompreneur, with financial freedom rating highest, followed by the benefit of having to focus on their own goals and ambitions, and cultivating valuable skills to pass along to their children.
“We hope that the doers’ responses encourage dreamer mompreneurs to make the leap and start their own businesses, since the survey data show that it may not be as hard as it looks ,” says PicMonkey CEO Frits Habermann. “For example, 64% of dreamers cite creating promotional materials as an area of concern, versus only 44% of doers.”
11—Funding for Women
American Business Women’s Day was September 22. And although the 12.3 million women-owned businesses in the U.S. grow 2.5x faster, have created 9 million new jobs, boast $1.7 trillion in revenues and drove 63% more value for venture capital investors, challenges remain. Among women entrepreneurs:
- 72% cite lack of capital and cash flow as a top challenge
- 48% note lack of mentors holds them back
- 31% say lack of support system is a hurdle to business ownership
To help address these challenges, iFundWomen, a crowdfunding platform designed for female entrepreneurs, and Alcon, the global leader in eye care, launched Real Relief for Visionary Women. The program offer entrepreneurs an opportunity to be considered for financial relief and expert coaching for their business ventures, including the opportunity for one winner to discuss her business and its challenges with Barbara Corcoran, businesswoman and TV personality. The eight winners will be announced on Women’s Entrepreneurship Day, November 19th.
12—Women’s Experiences with Being Told to Smile
Have you ever been told you need to smile more? Many women have. According to Byte, an invisible aligner system:
- Women are told to smile 2x more by male co-workers than by female bosses; yet, being told to smile by a female boss makes women feel over 3x more undervalued.
- Women who believe it’s important to be liked at work increases by seniority—70% of women in a senior/executive position believe it’s important to be liked.
- 55% of women admit to “softening” digital communications with co-workers to avoid coming off as harsh; this tendency also increases by seniority.
- The #1 resulting emotion to being told to smile is demeaned.
13—Can You Have it All?
- Nearly 40% of women would ideally like a perfectly equal balance between career and family; yet, that’s a reality for only 1 in 4 women
- The most satisfied women (61%) are career-focused yet 41% still believe their work compensation suffers because of their familial responsibilities
87% of women, in hindsight, would have changed how they chose to balance their family and career
The Campaign for Female Education (CAMFED), a leading international non-profit supporting girls’ education, empowerment and entrepreneurship, has achieved 96% off its goal to educate one million more girls through secondary school by the end of 2019 in rural, sub-Saharan Africa.
Altogether CAMFED has supported 3.3 million girls in primary and/or secondary school across sub-Saharan Africa since launching 25 years ago. But this is only the beginning, according to CAMFED USA Executive Director, Brooke Hutchinson.
“Being able to see the data and on-the-ground results behind the work we’ve done over the past year is incredibly impactful,” said Hutchinson. “The numbers show that what we are doing is making a huge difference, but we know our work is far from over. We need to continue to grow our global community of donors and partners, as there are still tens of millions of girls without access to an education. They deserve true equality, and they will most certainly leave their mark on the world.”
The support to girls in sub-Saharan Africa is comprised of scholarships to meet school-going costs, which include fees and uniforms, as well as psychosocial support, mentoring, and addressing individual needs including feminine products, transportation assistance, and more. CAMFED’s model also helps graduates transition to positions of economic independence and leadership, allowing them to start businesses or pursue higher education. CAMFED’s ongoing mission is to tackle poverty and inequality by providing support to marginalized girls, empowering them through education, and enabling them to become leaders of change.
As an association of young educated women in Africa, CAMA is today central to CAMFED’s model. Since CAMA members have experienced firsthand the barriers marginalized girls face, they are in the best position to make the most effective change in their communities. In 2018 alone, 2,058 businesses were started by CAMA members. These businesses inject economic activity in areas that need it most, and educated girls participate more in the formal labor market, earn more income, and reinvest nearly 90% of their income back to their families. CAMA members also helped 706,867 students go to primary and secondary school in 2018 through their own activism and philanthropy.
For more information, you can read CAMFED’s full report here.