The number of US businesses owned by women are growing – but there’s a catch

This article is published in collaboration with Thomson Reuters Foundation trust.org

More than a third of U.S. businesses are now owned by women, a marked increase from previous years, but the vast majority of these are one-person companies, new research shows.

The number of women-owned businesses has risen 27 percent since 2007 to 9.9 million, but only one in 10 of these has employees, according to the research compiled by the National Women’s Business Council (NWBC).

Women-owned companies with employees generated $1.4 trillion in sales and receipts – the bulk of the $1.6 trillion generated overall by such businesses, it said.

The NWBC looked at women-owned businesses as of 2012, using data from the U.S. Census Bureau which conducted business ownership surveys in 2012, 2007 and 2002.

It found the number of businesses owned by women is growing at a faster rate than those owned by men, with the number of men-owned firms rising 7 percent to 14.8 million in the same period.

Low interest rates, improved access to capital and support from lenders, investors and government has fueled growth in women-owned businesses, the report said.

Also boosting women’s businesses are online marketplaces for goods such as Etsy and eBay, said Amanda Brown, a spokeswoman for the NWBC, a Washington, D.C.-based federal advisory council.

“It’s bringing more money into the household than perhaps they were bringing in before,” she told the Thomson Reuters Foundation on Wednesday. “With technology in general, there’s so much more you can do online and from your home.”

Also helping women in business has been the U.S. Affordable Care Act, President Obama’s health care reform law that expands access to insurance, she said.

Sole-owner businesses might include consultants, tutors or nannies, Brown said.

While the growing number of women-owned businesses is encouraging, the high percentage of those without employees means these businesses are not creating jobs for others, she said.

Carla Harris, chairwoman of the NWBC, said women-owned businesses lag those owned by men in terms of earnings and sales and in the venture capital and equity investment needed to launch and grow.

“There is great progress and a steep growth trajectory – but we have yet to see women-owned and women-led firms given the access and opportunity to live up to their fullest potential,” she said in the report.

Publication does not imply endorsement of views by the World Economic Forum.

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Author: Ellen Wulfhorst is the Chief Correspondent of the Americas for the Thompson Reuters Foundation.  

Image: A Businesswoman is silhouetted. REUTERS/Christian Hartmann.