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Women-Owned Business Ownership in America on the Rise

Womens magazine photos
(elnariz - stock.adobe.com)

In 2018, women-owned firms made up only 19.9% of all firms that employed people in the United States, though observation and predictions suggest those numbers are growing and will continue to grow.

There were 6,861 more women-owned firms in 2018 than in 2017, up six-tenths of a percent to 1.1 million, according to the Census Bureau’s Annual Business Survey (ABS).

Women-owned employer firms reported nearly $1.8 trillion in sales, shipments, receipts or revenue and employed over 10.1 million workers, with an annual payroll of $388.1 billion in 2018.

The ABS provides data on race, ethnicity, gender and veteran status of business owners with one or more paid employees. This information can be invaluable in helping economic development organizations promote growth of diverse and women business ownership in their areas. This data helps highlight some contributions of women to our economy.

Women-owned firms in the arts, entertainment, and recreation sector, for example, rose 10.5% from 22,219 in 2017 to 24,542 in 2018. The 10 sectors shown in the chart also saw growth in women-owned businesses.

Demographic characteristics of the nation’s women-owned firms are similar to their male-owned firm counterparts.

Most women-owned businesses are run by white women (82.8% of all women-owned firms), nonminority (74.6%), non-Hispanic (92.4%), and nonveteran (98.9%).

Women-owned firms tend to be more concentrated in certain sectors than all firms overall. According to the ABS, 191,230 or approximately 16.8% of the nation’s total 1.1 million women-owned firms in 2018, were classified in the professional, scientific and technical services sectors, compared to 14.3% for all firms.

Employees of women-owned firms were also concentrated in certain sectors. Nearly 2 million, or approximately 19.4% of the 10.1 million employees of women-owned firms, worked in the healthcare and social assistance sectors in 2018, compared to 14.9% of all firm employees.

Average annual earnings of employees of women-owned firms lag behind the national earnings average of workers of all firms: $38,238 in average annual payroll per employee compared with $54,114.

Women-owned firms in nine of the 20 sectors the ABS covered had average annual payroll per employee statistically lower than the total for all firms in those sectors.

The lack of sex parity was also visible in average annual sales, shipments or revenue.

In 2018, women-owned firms earned an average of $1.6 million in sales, shipments or revenue; male-owned firms’ earnings were doubled that at $3.2 million.

With more firms than any other state (742,139), it’s not surprising that the nation’s most populous state, California, also had the most women-owned firms in 2018. California’s 149,927 women-owned firms employed over 1.3 million workers with $57.4 billion in annual payroll.

In Hawaii, women-owned firms made up 24.7% of all firms in the state. In Virginia, women-owned firms made up 23.7%, and in Colorado women-owned firms made up 22.2% of all firms in the state. In terms of employment, women-owned firms in Montana made up 11.0% of all employees in the state.

Women-owned firms in the District of Columbia reported average annual payroll per employee of $57,031, higher than the national average of $38,238 for all women-owned firms in the United States.

In addition to ABS data on women-owned employer businesses, the new Non-Employer Statistics – Demographics (NES-D) program publishes data on women-owned non-employer firms, typically referred to as self-employed. In 2017, 10.6 million self-employed women-owned firms reported sales, shipments, or revenue of $286.1 billion.

The NES-D program supplements ABS data and includes similar breakouts by race, ethnicity and veteran status of the business owner. It also includes data of the business itself, including industry classification, and breakouts by receipts, size and legal form of organization. Combining both the ABS and NES-D data gives us the total number of womenowned firms in the United States.

Some key statistics from the 2017 NES-D:

• Nearly 1.6 million Hispanic women-owned firms reported sales of $34.7 billion.

• Nearly 3.7 million minority women-owned firms reported sales of $83.8 billion.

• 142,000 veteran women-owned firms reported sales of $3.1 billion.

Where Do We Go From Here?

As governments and communities strive to encourage business ownership by people who mirror the race and ethnicity of their residents, there is also a push to have business ownership reflect the gender of the workforce.

The Census Bureau’s ABS and NES-D provide key data that federal agencies, for example, can use to promote business ownership by women. The Small Business Administration, the Department of Commerce’s Minority Business Development Agency, and the National Women’s Business Council also provide key resources to encourage women-owned businesses, along with dozens of federal, state, local and private sector organizations.


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