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2022 National Women's Business Council Report Reveals Substantial Growth Of Women Entrepreneurs

The 2022 Annual Report from the National Women’s Business Council (NWBC) concluded that women-owned businesses “contribute substantially to entrepreneurship in the United States.”

The latest stats from 2019 revealed that 1.2 million women-owned employer firms accounted for 20.9% of all businesses with employees– a figure that grew 16.7% between 2012 and 2019. This increase overrode the growth rate for male-owned firms at 5.2%.

NWBC is an independent, politically neutral governmental advisory group enclosed within the Small Business Administration of the United States (SBA). It is composed of 15 volunteers, all of whom are prominent female business owners and leaders of national women's business organizations. The Council's primary mission is to advise and make yearly policy suggestions to the President, Congress, and the SBA Administrator on matters impacting women business owners.

Revenue for women-owned companies also increased by 51.9% during this time frame, while proceeds for male-owned firms faced a 34.2% increase.

As for women of color, Guidant Financial’s 2022 Women in Business Trends report determined that only 22% of survey respondents were women. Of this group, 9% were Black, 2% were Hispanic, 2% were Asian, and 2% were Indigenous Americans.

Guidant stated the 2021 report had displayed a rise in the diversity of small business owners and was unsure of the reasoning for the decrease of women of color-owned businesses– suggesting this was possibly a result of the pandemic.

Deputy, a tech employee scheduling platform, evaluated 2021 data from the U.S. Census Bureau and the U.S. Small Business Administration Office of Advocacy to categorize the states with the most and least women business owners. North Dakota and Rhode Island were not included in the study as the Deputy explained those states had an absence of information for women-owned businesses. However, the data from the District of Columbia was recorded in the survey.

The top 10 states for women in entrepreneurship included Washington, D. C, Florida, Colorado, Vermont, Georgia, California, Wyoming, Louisiana, Maryland, and New York.

NWBC has continued to highlight a chronic shortage of dependable and affordable childcare, as well as paid family medical leave (PFML) choices, as significant hurdles to rural women's entrepreneurship. These variables are taken into consideration as they impose a disproportionate cost on economically distressed communities and childcare deserts– impacting rural women's participation in business, return to work and labor force participation, and the entire national economy.

Council Members serving on the policy subcommittee "Rural Women's Entrepreneurship" evaluated relevant research and held a policy meeting discussing policy trends and viable approaches for supporting the U.S. care economy—an industry critical to ensuring the well-being of children, the elderly, working parents, and women entrepreneurs.

To continue the demographic study further, Guidant analyzed if the average business owner typically is a Gen Xer or baby boomer, as women entrepreneurs are 23% more likely to be Gen Xers. The respondents to Guidant’s report were: Gen X: 69%, Boomers: 19%, Millennials: 11%

Guidant's report investigated the reasons behind women's motivation for starting their own businesses and found a majority wanted to be their own boss (58%). Accordingly, many women were dissatisfied with corporate America (38%), whether it was dissatisfaction with pay, treatment, or lifestyle that influenced their decision to leave.

On the other hand, 30% of women reported their motivation for starting a business was wanting to pursue their passion– which may be why there is such a wide age range of women entrepreneurs across America.

Parallel to this reason, 21% were either “bored,” financially insecure, or began a business due to the fact that they weren’t ready to retire completely.

According to Guidant, these were similar to the reasons male firms began, with the main difference being that women were 7% more inclined than the average business owner to explore an opportunity. According to the report, despite the challenges of business ownership, 74% of female entrepreneurs were relatively or very pleased after starting a business; meanwhile, 17% were rather unhappy, and 9% were neutral.

The Global Entrepreneurship Model (GEM) report showed different motivations for starting a business. 72% of women wanted to build wealth and form either a new or additional source of income. On the other hand, 71% had the desire to make a difference, and 46% were motivated by reasons such as job scarcity.

According to the GEM, approximately 40% of women started their businesses with 1-5 employees, and another 40% were solopreneurs. More than 10% of women-owned businesses employ 20 or more people, far exceeding the global average of 3%.

62.3% of women reportedly sought financing to cover operating expenditures, compared to 54.6% of males. Approximately 32% of men have pursued financing to expand their company, pursue new opportunities, or obtain commercial assets, compared to about 26% of women-owned businesses. These conclusions are consistent with prior research findings on access to capital and the expansion of women-owned businesses, which demonstrate that women are more hesitant to seek financial funding that could allow them to build their firms.

According to the World Economic Forum, closing the economic gender gap may require at least 150 years. Direct investment in female entrepreneurs via funding is one possible way to bridge this gap. According to the Boston Consulting Group, when women receive funding, they earn more than double the income per every dollar invested as their male counterparts and generate 10% more income over a five-year period.

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