Margot Dorfman, CEO, U.S. Women’s Chamber of Commerce
The rise of female entrepreneurship in America is akin to ‘A Tale of Two Cities.” These two “tales” are the hyped up media headlines about women-owned firms that shout about the great rise in women’s entrepreneurship versus the bottom-line “tale” of reality reflected in trillions of dollars in lost opportunities through low revenue generation.
Did you know?
Recently released U.S. Census Data from the 2012 Survey of Business Ownership tells us: While women now own 36% of all U.S. firms, we secure just 4.23% of all revenues – compared with 53.63% firms which are male-owned generating 28.23% of all U.S. receipts. 70% of all women-owned firms generate less than $25,000 in annual revenues. 1 in 10 women-owned firms have employees. Between 2007 and 2012 the average receipts generated by women-owned firms decreased nearly $10,000 annually – while all other business types increased significantly.
The recently released U.S. Women’s Chamber of Commerce report, “Wake-Up Call – Opportunity Loss: U.S. Census Reports Women-Owned Business Revenues Are Lagging,” (http://www.uswcc.org/wake-up-call) details these findings by gender, region, industry and race/ethnicity.
The truthful tale is one of both success and frustration. Women have a unique stake in economic markets, policy and outcomes. Over many decades, we have progressed from the home to the workplace and into business ownership. We own 36% of all U.S. firms and control up to $15 trillion in annual purchasing power. We have driven the creation of new businesses and jobs, moved into leadership roles providing financially for our children and families, our employees and communities. Our influence transcends financial clout as women now hold the majority vote.
Our role in the workforce cannot be understated: If no woman had joined the workforce since 1970, the U.S. economy would be just 75% of what it is today.
What is driving women into entrepreneurship?
There are a number of initiatives pushing women into business ownership. Women want to create something that is fulfilling and rewarding and something that brings in money for themselves and their families – but, is also flexible to their needs. Women want to be their own boss. Women want: fulfillment, money, family, flexibility, and independence.
What are the core challenges to business growth? Why are women’s revenues lagging?
The top challenge for women business owners is access to capital. Every day I hear from U.S. Women’s Chamber of Commerce members regarding the challenges they face seeking capital. They talk about the blatant discrimination they face in securing capital and how this impacts their ability to start their firms with the right type and size of capitalization and grow their firms to be competitive and secure market share growth. Women tell me how frustrated they are to be forced to use high interest credit cards, personal assets and even deplete their retirement savings as they start and grow their businesses while men secure access to better structured, more affordable capital.
Remarkably, women start their businesses with about 23% less capital than men. Just $1 out of every $23 in conventional small business lending goes to women-owned firms. Only 16% of Small Business Administration backed loans are awarded to women.
Other obstacles facing women entrepreneurs are: access to large markets – especially federal supplier opportunities; access to quality, mainstream education and resources where they can secure the same education and connections as male-owned firms; access to affordable childcare; and, the need to raise American incomes so as to drive greater consumer spending.
If you are a woman, you have experienced firsthand the realities. But, why should men care? Women contribute to their family income and to the economy in our communities and across the nation. Women who secure the tools and resources they need to start and grow their businesses are not only supporting themselves, they are providing for their families, their employees, their employees’ families and their community. As women provide for themselves and elevate employment, there is less reliance of government assistance programs.
What can be done to overcome these challenges in 2016?
Women are a major market force. We must change the conversation from the feel good headlines to the bottom-line challenges we face and influence our national leadership during this election season. Many of the issues women face are driven through government policies and programs. Women should support elected leaders who step up to assure women business owners may access the capital they need to start and grow businesses, access government supplier markets, access mainstream business education and resources and leaders who will take action to elevate American incomes and grow consumer spending.
About the Author
Margot Dorfman is the CEO and Co-Founder of the U.S. Women’s Chamber of Commerce, a 501c6 not-for-profit trade association based in Washington DC. Dorfman is a visionary leader who has dedicated herself to promoting the economic and leadership interest of women. Her extensive background in business, business ownership, publishing and nonprofit leadership has prepared Ms. Dorfman to set the vision for the U.S. Women’s Chamber of Commerce (uswcc.org).