Study shows women-owned businesses thriving, face usual obstacles

Despite the difficult economic climate during the recent recession, women-owned businesses performed just as well as men-owned businesses during the period 2007 – 2010, and in many cases outperformed their peers.

However, in today’s newly released analysis by the National Women’s Business Council (NWBC), the data demonstrate women-owned businesses tend to struggle with some of the key obstacles in growing their businesses.

“These data are some of the most concrete evidence that women-owned businesses can be successful, but do face different struggles than their male counterparts with regards to business performance, revenue distribution and industry participation,” said Executive Director of NWBC, Anie Borja. “NWBC will be releasing a series of infographics and analysis on this important topic in the coming months.”

Findings of the analysis included:

Making more than $100K matters. Across all race and ethnicity groups, businesses earning less than 100K were more likely to die than those earning more than 100K. While there is still some disparity in performance at higher revenue levels, overall all race and ethnicity groups that struggled more in lower revenue levels do better in higher revenue levels, with African American women standing out in their expansion rates.

Four most common types of expansion capital are personal / family savings, business loans from banks, business profits, and personal or business credit cards. Both men- and women-owned businesses that used business loans or business profits to fund expansion during the recession did better than those businesses that used credit cards or personal savings. Women-owned businesses using bank loans or business profits died slightly more, but also expanded more, than men-owned businesses. E

Education does not seem to improve success in business for women. Overall, slightly fewer women-owned businesses had a bachelor’s degree than men-owned businesses. Also, education is clearly not a requirement for success in business as many industries have less than 5-6% of their owners with a degree. However, among the industries that have owners with the highest levels of education, the industries dominated by women-owned businesses rank in the top three (health care and social assistance; professional, scientific, and technical services; and educational services), with over 80% of owners having at least a bachelor’s degree. On the down side, despite the higher levels of education, women-owned firms do not have the same outcomes in higher revenue as men-owned firms across almost every industry.

Women business owners are slightly younger, and the self-employed are younger than employers. Women-owned businesses tend to have younger owners than businesses owned by men, or equally owned by women. Self-employed businesses also tend to have younger owners than employer firms, where less than 10% of owners are under the age of 35.