Start-up activity among female entrepreneurs is on the rise, now accounting for 30% — or about 9.4 million — of all U.S. businesses, according to a new study.
Women-led businesses are increasing at a rate 1.5 times the national average and generating about $1.5 trillion annually, according to the new 2015 State of Women-Owned Businesses Report commissioned by American Express OPEN.
“There aren’t as many external challenges as there used to be,” said Julie Weeks, founder of Womenable, and author of the report. “I think what is happening is higher levels of education and managerial experience from past jobs” make it easier for women to own their own businesses.
Post-recession rates for women-led business have seen an uptick, specifically for minority-owned businesses.
In her research, Weeks sees “phenomenal growth of businesses owned by women of color, but the revenue and employment is not as high.”
In the past 18 years, growth for minority-owned firms have outperformed non-minority owned firms by 33% in 2015, compared to 17% in 1997. Among those firms, African-American and Latina women lead the pack with the highest number of growth.
In spite of the growth, other limitations make it challenging for women-owned firms. Access to capital for many entrepreneurs is daunting, but women – and minority-owned firms – face even bigger hurdles. Gender disparity makes it less likely for women to interact with venture capitalists, causing them to rely heavily on self-financing, according to a report published by the U.S. Small Business Administration.
Dawn Dickson, 36, founded four-year-old e-commerce website Flat Out of Heels, and says she notices some women of color lack the resources and knowledge to successfully receive ample funding from investors.
“I hear back from angel investors and they say minority women aren’t creating scalable businesses,” said the Ohio native. “I found the challenge is that there aren’t very many resources for [women]. Everything is so heavily tech focused. A lot of time when I go to events, I rarely see minorities, I rarely see women.”
In 2014, the daily average of businesses started by a woman was 887, compared to the 608 started in 1997. The report also found that although there is more growth, women-owned firms only employ 6% of the country’s workforce and contribute 4% of revenue, which is nearly the same amount added in 1997.
The states with the fastest growing number of women-owned businesses include Georgia, Texas, North Carolina, North Dakota, and New York. Alaska, West Virginia, and Iowa had the least growth.