Survey Says: What Role Do Women-Owned Businesses Play in the Economy?

Women are starting businesses at a faster rate than the general population and now account for nearly a third of all businesses, according to a new report.

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Girl power: Women-owned firms now account for nearly a third of all businesses.What's the state of women-owned businesses today? According to the American Express OPEN State of Women-Owned Business Report, it's a "mix of progress and paralysis."

American Express OPEN's report used data from the three most recent business census surveys (1997, 2002 and 2007), the most recent of which was just published in December, to paint a complete picture of women-owned businesses over the last 14 years. First, the good news: The number of women-owned businesses in the United States increased by a rate of 1.5 times (50 percent) the national average (34 percent). Women-owned firms now account for 29 percent of all businesses.

Now, the bad news: While women-owned businesses are growing in number, by other important measures, their growth isn't keeping pace. "In terms of both revenue and employment, the share of women-owned firms at the highest levels of business accomplishment has remained essentially unchanged over the past 14 years," the report notes.

In 1997, 2.5 percent of women-owned businesses had 10 or more employees -- today, just 1.9 percent have that many. Between 1997 and 2011, employment growth among both very small and larger businesses owned by women has been below average.

The picture is more mixed when it comes to revenue growth. Women-owned businesses with revenues between $10,000 and $99,999 or over $1 million saw above-average revenue growth in the past 14 years, but those in the $100,000 to $999,999 range experienced below-average revenue growth. In 1997, 1.8 percent of women-owned firms had revenues of $1 million; the percentage is unchanged today.

However, while these businesses contribute just 6 percent of U.S. jobs and 4 percent of business revenues compared to all U.S. businesses, things look a little brighter when you take large, public companies out of the equation. When compared to all privately held firms, women-owned businesses employ 13 percent of the workforce and account for 11 percent of all business revenue. Even better news: Those numbers have grown in the past 14 years.

In fact, the report notes that male-owned small businesses are facing some of the same problems as businesses owned by women. Although companies owned by men are larger on average than those owned by women (about twice as many have firms with 10 or more employees -- three times as many have sales of $1 million), they're falling short by other measures. The percentage of companies with 10 or more employees owned by men dwindled from 6 .6 percent to 4.9 percent in the past 14 years, and the percentage with sales of $1 million or more shrunk slightly from 6.6 percent to 6.3 percent.

It seems all small businesses are suffering from the growing impact of big businesses. "[Large firms'] dominance in the U.S. economy has grown over the past 14 years," the report notes. In 1997, large, publicly traded firms represented 2 percent of businesses and accounted for 43 percent of U.S. jobs and 55 percent of business revenues. Today, they make up 3 percent of U.S. businesses, yet account for a disproportionate share of employment and sales -- 53 percent of workers and nearly two-thirds (64 percent) of business revenues.

For more data, including the states and industries where women-owned businesses are growing the fastest and slowest, check out the full report. There's also a cool infographic portraying the growth of women-owned businesses.

Rieva Lesonsky is CEO of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva and visit SmallBizDaily.com to sign up for her free TrendCast reports.

Tags: American Express, American Express OPEN, Amex, Amex OPEN, Business Trends, Rieva Lesonsky, starting a business, Survey Says, women entrepreneurs, women in business, women in business statistics, women-owned businesses

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