How did women-owned businesses fare during the recent recession?
The National Women’s Business Council (NWBC) has released data suggesting that in spite of the challenging economic conditions of 2007-2010, many women-owned businesses performed as well as or better than those owned by men. NWBC is a non-partisan federal government council created to serve as an independent source of advice and counsel to the President, Congress, and the U.S. Small Business Administration on economic issues of importance to women entrepreneurs.
Anie Borja, executive director of NWBC, noted analysis of the data revealed several key factors contributed to which women-owned businesses fared the best. NWBC has released an infographic that summarizes and analyzes the results and will be releasing additional infographics and analysis in the coming months.
Among the factors common to the businesses performing better overall:
• Annual revenues of more than $100,000 is critical. The findings show that across all race and ethnicity groups, businesses earning less than $100,00 were more likely to fail than those earning higher annual revenues
• Four most common types of expansion capital are personal/family savings, business loans from banks, business profits, and personal or business credit cards. Both men- and women-owned businesses that used business loans or profits to fund expansion during the recession performed better than businesses using credit cards or personal savings.
• Higher levels of education do not appear to improve success in business for women. Overall, slightly fewer women-owned businesses had a bachelor’s degree than men-owned businesses. In many industries, fewer than 5 to 6 percent of business owners have a degree. Yet among the industries in which owners have the highest levels of education, the industries dominated by women-owned businesses rank in the top three (health care and social assistance; professional, scientific, and technical services; and educational services), with more than 80 percent of owners having at least a bachelor’s degree. However, despite the higher levels of education, women-owned firms do not have the same outcomes in higher revenue as men-owned firms across almost every industry.
• Women business owners are slightly younger, and the self-employed are younger than employers. Women business owners tend to be younger than male business owners, or the owners of firms that are equally owned by women. The owners of self-employed businesses also tend to be younger than the owners of employer firms, where fewer than 10 percent of owners are under the age of 35.