Women-Owned Businesses: 2018 in Review

In business, we review progress on an annual basis. We use the one-year mark as an anniversary, a milestone, a point of achievement…and we analyse that same period of time to assess how we have performed, where our strengths lie, and in what ways we can improve.

And often, our success as a community of female entrepreneurs relies not only on ourselves, but on how the women business owners of our communities—and of the world—are performing. When one fempreneur soars, we all benefit. And so, we are each others’ most fervent supporters. We’re in this together.

That’s why I think the State of Women-Owned Businesses Report, periodically released by American Express, is such a helpful tool in determining how we, the women of business, are doing.

It provides a panoramic overview of the ways in which we’re conquering a lack of balance in the business world, as well as the areas in which we can work together to improve.

The 2018 Report, in a Nutshell

According to the American Express 2018 State of Women-Owned Businesses Report, the number of women-owned businesses has increased by 56% since 2007 (as compared to 12% growth by all firms). Employment under female business owners has increased by 21%, whilst falling to -.8% growth overall. And although all firms surveyed experienced a 36% revenue increase, female-led companies surpassed that by an additional 10%.

What do these findings tell us?

Women are not only stepping forward to start and run their own businesses like never before; the workforce is recognising the benefits of employment with women-owned businesses, and consumers are choosing to make purchases from those businesses in record numbers.

Employment and revenue numbers weren’t quite as impressive as ownership numbers. I don’t see the lower increases in employment as a problem: all businesses are falling there, considering that technology is making operations more efficient and that small businesses are turning to contractors, rather than full-time employees to fulfill duties.

Another reason for the slower increases in employment and revenue in female-owned businesses is something called necessity entrepreneurship. Women are often faced with loss of employment and no viable options for their next move. And so, they go into business for themselves. This approach is different from that of an investment or opportunity entrepreneur in that little or no start-up capital is available and it’s often the woman’s first attempt at business leadership. She may be a solopreneur, meaning she has no team and therefore will not add to overall employment numbers. She may be just starting to grow as a limited-capital start-up, which will temporarily affect both employment and revenue numbers.

Even without consideration for the individual performances of these fempreneurs, the fact remains that we are, as a sector, exceeding expectations, and will continue to do so.

Women of all circumstances should find this encouraging.

Age as a Factor in Female Business Ownership

The 2018 State of Women-Owned Businesses Report also provides information about the age of first-time fempreneurs—and the results may surprise you. I believe that when most people think of women starting their own businesses, they imagine it’s a “Millennial thing.” Perceptions are that it’s a young woman’s endeavour; when in fact, it’s practically the opposite.

Women who were traditionally starting to think about retirement are now moving toward business ownership.

Their children are grown. They possess invaluable life experience. They’re independent, with clear visions of what they want. They have a solid grasp on what sets them apart. They have more access to start-up capital (or the credit to borrow it). They have worked in the business world for most of their lives. And they’re ready.

Here’s the breakdown:

  • Under age 25: 2.4%
  • 25-34: 13.1%
  • 35-44: 17.7%
  • 45-54: 21.7%
  • 55-64: 26.1%
  • Age 65+: 19%

I believe that these percentages represent a woman’s need to continue working past what some employers might consider her “prime.” Retirement isn’t coming as soon as it once did, and women are living longer, healthier lives. So why not?

These percentages should give women of all ages a renewed hope for their futures. Women grow in knowledge and strength every day of their lives, and the thought of a world of women bringing that sagacity to every type of market from local to international is beyond exciting!

Flexible Entrepreneurship, and How it’s Shaping Business

Another significant reason that more women are moving into entrepreneurship is the need for a more accommodating schedule—or at least one they set for themselves. Whether they’re having to care for their families, they’re bothered by having to miss family functions because of work, or because they’ve discovered that their side-hustles have greater flexibility and earning potential than their day jobs…there’s no doubt that there’s a move to “having it all” without having to sacrifice anything.

Extraordinary Fempreneur Millionaires

Female-owned businesses that earn more than $1M US per year are making great strides. They only represent 1.7% of all women-owned businesses; however, this is a 46% increase since 2007. When looking at businesses as a whole, the number of companies earning $1M annually only increased 12% in that same period of time.

These $1M businesses owned by women are outperforming their percentages, retaining 68% of all employment in the women-owned business category (with an average of 30 employees per company). And they generated 69% of all revenue for the same category. That’s the equivalent of about $1.2 US billion.

What does this tell us? Even though the majority of female-owned businesses earn revenues of less than $250,000 annually, the greatest impact is felt when those businesses grow to the $1M and beyond mark. Their influence surpasses that of all businesses, which should give us even greater incentive to help each other over the threshold that leads to better balance in business, as well as more significant contributions by women.

A Fempreneur’s 2018: In Conclusion

The numbers brought to us by American Express prove what we’ve been seeing: the public’s enthusiasm for women-owned businesses is surging, but still has a bit of catching up to do. This means that female business owners around the globe, as well as the men and women who support them, have a task ahead of them. That task involves raising awareness of the gender balance that must be struck in order for markets to offer more complete, demand-driven products and services.

A portion of markets from Australia to the UK to the States has recognised the benefits of supporting female-led businesses—and we must continue to spread the good news about the rising tide of balanced business.

What did you witness in 2018 that should lead us to believe that a better gender balance is being struck in the world of business? Or what areas do you see as needing more attention? Share your experiences here, so we can all work together to make 2019 an even more impressive year for fempreneurs everywhere.

Are you looking for guidance in building your business, marketing and branding strategies? Or are you wondering how you can strike a better balance in your own life by starting a business? Then look into my online academy, where myself, my coaches and other powerful business women help you turn your passion, drive and commitment into business success.