Women play a key role in the American small business landscape, owning 1.2 million small employer firms employing 9.2 million people, with total payroll above $350 billion. To mark National Women’s Small Business Month, observed this month, here are five facts about women-owned small businesses.
1. Women are nearly half of the U.S. labor force—but one-fifth of small business owners.
Women account for 47% of the U.S. labor force.2 Their share of small business owners is less than half that: women own 21.7% of small businesses, those employer firms with fewer than 500 employees.
2. Women-owned small businesses tend to be smaller in terms of employment.
Compared to small businesses owned by men and those owned equally by men and women, women-owned small businesses, on average, employ fewer people per firm. Most small businesses in the United States are very small, irrespective of ownership. While 92% of women-owned small businesses have fewer than 20 employees, the share is similar for men: 89% of male-owned small businesses have fewer than 20 employees.
3. Women-owned businesses tend to be younger than those owned by men.
Six in 10 women-owned employer firms have been in operation for less than 10 years. That is higher than the same share for male-owned and equally male/female-owned firms. White men own the oldest business: 49% of white male-owned firms are older than 10 years. Black and Asian women have the youngest businesses: 69% and 70%, respectively, of businesses they own are younger than 10 years old.
4. There is diversity among women-owned businesses in sales, employment, and payroll.
Performance among women-owned businesses varies by the race and ethnicity of owners.
Women tend to own smaller firms: the highest share of women’s business ownership is among the smallest firms (those with one to four employees), at 23%. By contrast, women own just 13% of the largest small businesses, those with 250 to 499 employees. There are, however, over 9,000 women-owned small businesses with between 100 and 499 employees. Those companies have over $31 million in sales per firm, 184 employees per firm, and $7.8 million in payroll per firm, on average.
5. Women expressed more pessimism coming out of the pandemic.
With the COVID-19 pandemic’s effects still haunting small businesses in 2021, women small business owners were slightly more pessimistic about the near-term future of their business. Sixty-three percent of women business owners said they were somewhat or very concerned about the financial health of their businesses, compared to 59% of male business owners.
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