It’s a sad fact that women still earn less than men, a fact confirmed in at least two recent studies. The good news is that the environment is changing, more companies are committed to closing that pay gap and more women are starting to earn the same as their male counterparts. The better news, at least to me, is that women are doing other things to make more money: like start businesses. And they’re wildly succeeding.
That’s the takeaway from the most recent State of Women-Owned Businesses Report, commissioned by American Express. The ninth annual report, which is based on US Census Bureau data and adjusted by Gross Domestic Product data, found that women-owned businesses continue to trend above all businesses. According to the report, women-owned businesses now represent 42% of all businesses – nearly 13 million – employ 9.4 million workers and generate revenue of $1.9tn. Women, on average, started 1,817 new businesses a day in the US between 2018 and 2019, a rate comparable to last year.
“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,” Courtney Kelso, a senior vice-president of American Express said. “The economic impact of women-owned businesses is undeniable, from the trillions they contribute via revenue to the millions of jobs they provide.”
In what could be a response to lower pay at their place of employment, more women than ever – particularly women of color – are also starting up side businesses. When looking at specific minority groups over the last five years, growth in “side entrepreneurship” is up 99% among African American women, 63% for Asian American women and 46% for Latina/Hispanic women. As of 2019, according to the report, women of color accounted for 50% of all women-owned businesses, with an estimated 6.4 million women of color-owned businesses employing nearly 2.4 million people and generating $422.5bn in revenue.I predict that future generations of female entrepreneurs will expand their offerings beyond doing traditional ‘female’ things
All of this is great stuff, except for one thing: female entrepreneurs still seem to be drawing from the same well. More than half surveyed have started businesses in just three industries: personal services such as hair and nail salons and pet care businesses, healthcare and social assistance such as child daycare and home healthcare services and professional/scientific/technical services such as lawyers, bookkeepers, architects, public relations firms and consultants. Many companies in these industries oftentimes lag behind in revenue when compared with other verticals such as wholesale and retail trade or tech-focused businesses.
But one challenge at a time, right? It’s great to see the decrease in gender-based pay gaps in the corporate world. It’s fantastic to see so many women not only starting new businesses but succeeding with them. I predict that future generations of female entrepreneurs will expand their offerings beyond doing traditional “female” things and into more profitable businesses where men still dominate.
The fact is that women have made significant gains not only in the workplace but in entrepreneurship. Of course there is still a long way to go to achieve equality. But, compared with the data from 10 or 20 years before, there’s no dispute that the environment continues to improve.