According to the “2015 State of Women-Owned Businesses Report” from American Express Open, the number of businesses owned by women increased 74 percent between 1997 and 2015—a growth rate that is 1.5 times the national average. It’s safe to say that female entrepreneurialism isn’t going away any time soon, despite the difficulties that women in business face.
Between statistics like this, more access to financing and, as Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce says, the continuing “lack of fair pay, fair promotion, and family-friendly policies found in corporate America,” it’s no surprise that women are carving out their own place in the business world.
As the number of female entrepreneurs, founders, and investors continues to grow, many economists suggest that 2016 will be the year that women rekindle economic expansion. Here’s why:
Women Are Hungry for Business Success
This is not to suggest that men don’t want success, but many women are highly motivated to see their ventures grow rather than return to male-dominated workplaces. Research shows that almost 90 percent of women business owners expect their company’s gross profits to increase or remain stable in the next year. And a majority (61 percent) expect profits to rise, which is 3 percent higher than the average forecast among all entrepreneurs.
Some female entrepreneurs, like Hawaiian-native Melialani James, aren’t content simply achieving personal success. James has a vision of transforming Hawaii from a place that people leave in order to become entrepreneurs into a thriving innovation sector. James is driven by the notion that by empowering entrepreneurs to “start companies and live the lives they want to live” in Hawaii, she will see the meager number of local entrepreneurs rise. And the more successful entrepreneurs there are, the more coaches, role models, and mentors are available to encourage others to pursue their own goals.
Expanding Opportunities for Government Contracts
A couple years ago, the federal government removed the barriers that limited women business owners to competing only for small contracts. The same updated law now affords women the opportunity to apply for no-bid (also known as single source) contracts which should expand opportunities for women to capture more lucrative government contracts that put more people to work.
According to Sen. Jeanne Shaheen of New Hampshire, single-source options afford women an opportunity to gain valuable experience necessary to compete for more and larger projects, which is critical to securing government contracts.
Why does it matter if federal, state, and local governments enact legislation that helps female business owners become active in government contracting? Forty-seven percent of small businesses that are active in government contracting reach or exceed the $1 million revenue mark—and if you’re a woman-run business, you are 23 times more likely to become a million-dollar business with feds on your client list.
Larger Businesses Don’t Drive the Economy
A 2010 study that took data from the Small Business Administration and the Bureau of Labor Statistics revealed that 60 to 80 percent of all jobs in the United States are created by small businesses. With access to more business capital via microenterprises, female angel investors, and crowdfunding sites like GoFundMe and Kickstarter, female entrepreneurs are in a unique position to fuel the economy with startups and small businesses.
Today there are more female angel investors willing to bankroll women-owned startups. Deals range from $10,000 to $1 million or more, depending on the nature of the business and the founders’ readiness. What is unique to many of these angel investors is they offer other services to help new business owners, like coaching, speaking, training, and product development advice.
Growing Demographics Are the Catalyst for Economic Growth
With access to more venture capital, fewer restrictions for entering government contracting, and an expanded number of female role models to emulate, it’s clear that 2016 is shaping up to be a great year to be a woman launching a new business.
There is another trend worth noting. According to the Center for American Progress, “Women of color are a principal force behind one of the most important components of America’s current marketplace and our nation’s future economy: entrepreneurship.” Entrepreneurship is helping women of color build wealth and create jobs across all demographics.
The CAP goes on to state that, “Entrepreneurial women of color are a critical part of our economy, and they have already demonstrated their ability to generate record amounts of revenue, employ people in their communities, and be a tool of economic mobility for women of color and their families.” There’s been an unprecedented growth in the number of businesses founded by women of color in recent years.
Consider these stats: between 1997 and 2015 Latina-owned businesses grew by 180 percent. African-American female-owned businesses shot up 258 percent, and businesses helmed by native Hawaiian and Pacific Islander women experienced a growth rate of 216 percent.
In Summary
Many factors are coming together to create an environment that supports female entrepreneurs in ways that traditional work structures can’t. The gap between the number of men launching a business and their female counterparts is shrinking. But even more importantly, female business owners, mentors, and investors are supporting each other with advice, funding, training, coaching, and encouragement.
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