It’s been reported that a rising number of women are attending business school changing the way the classroom looks. Excitingly, this trend is carrying over to entrepreneurship as more women are pursuing passions and starting their own businesses changing the way American business looks.
According to American Express, in 2019 there were nearly 13 million women-owned businesses, accounting for 42% of all U.S. businesses. This number is light years away from the representation of women-owned businesses in 1972, a mere 4.6%.
And if that’s not impressive enough, take a look at the success of minority women-owned businesses. Women of color make up 50% of all women-owned businesses as of 2019 and employ over 2 million people. Here are the numbers tracking the momentum of minority women entrepreneurs.
- From 2014 to 2019, the number of businesses owned by women of color increased by 43%, doubling the growth rate of women-owned businesses (21%). (American Express)
- Women of color make up 50% of all women-owned businesses as of 2019. (American Express)
- Women of color founders employ 2,389,500 people, which makes up 25% of the total employment of women-owned businesses. (American Express)
- Women-of-color-owned businesses generated 23% of total women-owned businesses’ revenue in 2019 ($422.5 billion). (American Express)
- As of 2019, 18% of all women-owned businesses in the U.S. were owned by Latinx women. (American Express)
- Of the net new women-owned businesses started per day (1,625), women-of-color accounted for 89% of those new businesses. (American Express)
Now all of this deserves a standing ovation as women have repeatedly been oppressed in business. Broken rungs and glass ceilings in corporate America have led to fewer women advancing in companies and reaching executive positions. However, this is why these women entrepreneurs statistics are so encouraging. No longer are women subjecting themselves to a system stacked against them, and instead empowering themselves to reach new heights on their own by starting a business.
Despite advancements women have made starting their own businesses, it’s not without challenge. In fact, there is still a deep-seeded bias against women throughout the funding process. According to the Kauffman Foundation, investors tend to unconsciously ask different questions based on gender. They are more likely to ask men how will you “win” and more likely to ask women how will you “not lose” when gauging the success of an idea. Women-owned startups also pay higher interest rates and take on more collateral than similar male-owned businesses. All these findings prove that despite an increase in women entrepreneurship, funding remains discriminatory posing an obstacle for many women founders.
This past year, 2020, has been defined by turbulence. The stocks dipped and rose as news of the pandemic developed and deep-seated systems were questioned. Despite (or maybe because of) this turbulence, entrepreneurship is on the rise. In quarantine, Americans have been filing new business applications at the fastest rate since 2007, according to LegalZoom.
Based on the numbers, 2021 is shaping up to be a year marked by ingenuity as we grapple with adversity. And as trends would have it, women are set to be at the forefront of this push given the increase in female entrepreneurship over the past five years.
Take a look at the infographic below, created by Great Business Schools, to get a visual sense of how the business and entrepreneurial landscape is changing for women: