Ambitious women are launching new ventures at unprecedented rates, breathing fresh innovation and economic prosperity into markets across the globe. Female-owned firms now account for 42% of all American small businesses, employing nearly 10 million workers and generating $2 trillion in annual revenue. As the following statistics show, women entrepreneurs are growing at more than double the national average, overcoming historical obstacles thanks to recent expansions in access to funding and educational opportunities.
However, significant challenges remain. Persistent biases make it difficult for women business owners to secure capital and essential relationships. Other obstacles like unreachable standards for work-life balance also continue blocking female founders from reaching their full potential.
This expert guide will illuminate the latest trends in women‘s entrepreneurship with in-depth analysis of the achievements, roadblocks and future outlook for these economic change-makers. You‘ll gain insights into the quantifiable competitive edge offered by women-led firms as well as the programs helping the next generation shatter glass ceilings.
The Meteoritic Rise of Female Entrepreneurship
Women are launching new companies at astounding rates, far outpacing national averages. Here are some standout statistics showing the accelerated growth of women-owned firms:
- Women started an average of 1,817 new businesses per day in 2021, representing 42% year-over-year growth (1)
- The number of women-owned firms has skyrocketed by 114% over the past 20 years, compared to just 44% overall national growth (2)
- Revenue from women-owned businesses has increased 21% since 2014, while average company revenue growth stagnated around 12% (3)
Experts project this trend will continue as more investors wake up to the potential of female entrepreneurs. But exactly how do women business owners uniquely contribute to economic prosperity?
The Economic Impact of Female Business Leaders
From venture-backed startups to the Fortune 500, companies helmed by female executives and founders outperform corporate averages on nearly all fronts. Let‘s analyze the data-backed benefits of women in leadership roles:
- Firms with greater gender diversity enjoy 63% higher returns on equity compared to competitor averages (4)
- Brands led by female CEOs realized 25% higher equity returns over the past several years compared to S&P averages (5)
- Startups founded by women deliver higher revenue – more than twice as much per dollar invested as those founded by men (6)
- Gender-inclusive leadership teams have 19% higher revenue due to elevated levels of innovation and creativity (7)
Additionally, research suggests consumers and employees favor women-led companies:
- 90% retention rates at brands with female executives compared to 75% average (8)
- 63% of consumers now factor diversity and inclusion into purchasing decisions (9)
fwd-thinking organizations are taking notice by building out mentorship programs, networking events and funding opportunities aimed at scaling women-owned enterprises. And with 42% of firms now women-owned, consumers have more opportunities than ever to vote with their wallets by supporting female founders.
Lingering Obstacles Blocking Future Female Leaders
Despite outstanding achievements in growing sustainable, competitive firms, significant barriers continue stymying talented women from reaching their full economic potential:
Access to Funding
– Women founders received just 2.3% of total VC funding in 2020 (10)
- The average women-owned company receives 82 cents of funding for every $1 awarded to male-owned firms (11)
Confidence Crisis
- 1 in 4 female founders cite lack of confidence as limiting their professional growth (12)
- Men apply for jobs when meeting just 60% of qualifications while women wait until they meet 100% (13)
Work/Life Balance
- 58% of women business owners handle childcare compared to just 14% of male founders (14)
- 23% of working moms report severe difficulties managing parenting alongside a demanding job (15)
Without expanded educational opportunities plus shifts in societal expectations, outstanding female founders may remain stuck on the sidelines – or pushed toward early exit events before reaching their true potential.
Supporting the Next Generation of Women Entrepreneurs
Many governmental, nonprofit and private-sector programs now aim to nourish emerging female founders with funding, networking and educational resources proving vital during the startup phase:
-
The Women‘s Business Enterprise National Council partners with over 170 corporates to provide certification and procurement programs for women-owned firms. Members gain networking opportunities, training workshops and access to contacts at influential partner organizations.
-
Ellevest offers specialized investment services aimed at helping women grow wealth and close funding gaps. The platform‘s algorithmic models provide custom recommendations based on salary, career path and specific financial goals like retirement planning or building startup capital.
-
IBM, Apple and Microsoft sponsor Girls Who Code, which has introduced over 300,000 middle-school and high-school students to computer science and tech entrepreneurship fundamentals via clubs, after-school programs and summer courses since 2012. Alumni from these programs will likely birth the next generation of women-led tech unicorns.
-
Between 2017 and 2022, the Women Entrepreneurs Finance Initiative (We-Fi) distributed over $300 million in targeted funding across 115 projects aimed at expanding opportunities for female founders based in developing nations (16).
These initiatives and countless others represent promising steps toward equipping talented women with the tools to shatter remaining glass ceilings.
Key Takeaways: The Future of Female Entrepreneurship
Women now own 4 out of every 10 operating businesses in America. They are founding new ventures at more than twice the national average growth rate. And brands with gender-diverse leadership statistically outperform competitors on nearly all business performance benchmarks.
Yet significant funding gaps, confidence issues and work-life balance challenges continue limiting female entrepreneurs from reaching their full economic potential. Nonprofits, private companies and forward-thinking governments actively expand programs aimed at nurturing the next generation of women founders.
With expanded funding opportunities and shifting attitudes toward women in business, female entrepreneurs are positioned to continue growing their enormous economic influence. I predict women-owned firms will own 8 out of every 10 small businesses in America by 2030.
Betting against women entrepreneurs seems an unwise gamble at this point. Are you ready to turn your innovative ideas into the next industry-dominating enterprise? The time to begin your entrepreneurial journey has never been more ripe.
Sources:
- SBA.gov
- SBA.gov
- Census.gov
- Catalyst
- HBR
- BCGC
- BCG
- ImpactGroupHR
- FMI
- Crunchbase
- HBR
- NASE
- WEF
- SBA
- Ladders
- We-Fi
