Why Women Are Leading the Small Business Boom
This August, the results of the new “LegalZoom: Women and the Boss Era Survey,” which looks at the changing dynamic for women and business, were released. WITH 60% OF WOMEN small business owners surveyed stating that “being their own boss” was the reason why they started their business, it’s clear that a new era of entrepreneurism for women across the U.S. is here.
For the survey, LegalZoom surveyed 1,009 women from June 29, 2022, through July 6, 2022, 505 of whom own a small business.
The survey explores how women today define success and why many are choosing to go into business for themselves. With the pandemic and the Great Resignation, the current small business boom is being led by women, with 73% of women entrepreneurs having just started their companies in the last three years. And while this number of up-and-coming entrepreneurs is staggering, there are still inequities that provide unique obstacles for women looking to form a small business.
Only about 4% of women today get access to small business funding from traditional financial institutions. It was found in the “LegalZoom: Women and the Boss Era Survey” that a staggering 60% of women small business owners self-funded their businesses and 15% used a loan from a friend or family. And despite this significant personal investment, 75% of women small business owners admitted to having operated or are currently operating their small business prior to officially forming, leaving them open to a breadth of personal financial liabilities. Even more, for women who have considered starting their own small business but have not, more than half (55%) name not having the money they need as the biggest barrier to following their dreams.
When asked to select the top three components of a successful career, women most often selected having a positive work/life balance (60%), the ability to work on things they’re passionate about (57%) and having complete control over the hours worked (50%). Not one of these factors defines success by title or money, which is a significant cultural paradigm shift for women in the U.S. In fact, only 15% of women define a successful career as reaching the executive level in a corporate setting.
This is even more prominent among younger generations of women (Gen Z and millennials), with more than one in three (34%) saying being able to focus on physical and mental health was a component of a successful career. What’s more, more than half of Gen Z and millennial women who don’t currently own a small business have considered starting one (56%).
Starting on the Side
Without the same access to traditional small business funding as other groups in the U.S., an overwhelming majority of women-run small businesses initially started as a side hustle (85%). In fact, nearly 70% of women still maintain their job while running their businesses today.
Rising Up, Together
Women entrepreneurs in the LegalZoom survey revealed that they are all about community. In fact, nearly two-thirds of women proactively look for small businesses to support when considering a purchase (63%). Similarly, 62% of women say they are more likely to support a small business if they know it’s women owned.
For women in business, support is key. Seventy-one percent of women believe that society views women business leaders more positively today than they did just two years ago. This number jumps to 77% among women who own their own businesses.