Across the country, women are launching their own businesses at record-breaking rates, turning business plans into everything from self-supporting home-based ventures to multi-million dollar corporations.
In fact, according to American Express OPEN’s 2016 State of Women-Owned Business Report, the number of female-owned enterprises shot up by 45 percent between 2007 and 2016. That’s five times faster than all businesses.
But that growth didn’t come without some hustle. Women face an uphill battle when building their own businesses.
They are a third as likely as men to secure venture capital or angel investments for their businesses, according to a Kauffman Foundation report. They start their own companies with only half as much capital as men. Female founders typically rely on their own money or help from friends and family to build a business.
The times, however, are changing.
Online crowdfunding campaigns are removing funding barriers for female entrepreneurs. Nearly 50 percent of the successful campaigns on crowdfunding site Indiegogo.com are run by women. Other resources, including Plum Alley Investments, Female Funders, and iFundWomen, are helping female business owners kick-start their enterprises.
Meanwhile, as more women achieve success, they are forming communities – online and in real life – to seek advice, find support and turn plans into corporations.
Here are five facts that show why women-owned businesses won’t slow down in 2018 – and beyond.
- On an average day, about 850 net new women-owned businesses are launched.
That’s lower than the peak of 1,100 per day during the recession and recovery period from 2007 to 2012, according to the American Express Open State of Women-Owned Business 2017. But it’s higher than 714, the number of women-owned businesses launched per day before the recession.
In other words, when the going gets tough, women start relying on themselves and take risks to boost their income and make a better life for themselves and their families. What’s more, even now, with an improved economy, they continue to launch new enterprises at a faster rate.
- Despite long hours, nearly half of female business owners find their work “fulfilling,” “interesting” and “enjoyable.”
Bank of America’s 2017 Women Business Owner Spotlight also found that 30 percent of female founders have nightmares about their business failing.
But, let’s face it, building a business takes hard work. One survey found that more than 80 percent of entrepreneurs work 40 or more hours each week. It’s difficult to stay on task for long hours if you don’t find the work fulfilling, interesting or enjoyable.
The good news is this: Women are committed to their work for the long haul, bringing the passion and ambition required for success because they find their work truly satisfying.
- Companies with a female founder perform 63 percent better than those with all-male founding teams.
In its look back at 10 years of investments, First Round Capital found that female founders often do better than their male peers. The seed-stage venture firm says that these companies with a female founder are “meaningfully outperforming” its investments in all-male teams.
These female entrepreneurs are achieving because they are coming to the table fully prepared for the job with a first-class business plan, full knowledge of the industry they’re entering (or creating) and a solid team behind them.
They’ve also checked off all of the details that are required when any new venture is launched. That includes ensuring a business is properly formed, meeting every rule and regulation from the start and remaining in compliance once it’s up and running.
- Between 1997 and 2017, firms owned by women of color grew by a whopping 467 percent.
American Express Open’s 2017 report found that businesses launched by minority women often are started out of necessity. As a group, they are more likely to face long-term unemployment and a bigger pay gap than others in the workforce and are seeking alternative ways to support themselves.
But, despite these struggles and setbacks, they also are defying trends that show a lower growth rate for most business owner segments.
They’re finding success, in part, by networking with other entrepreneurs, building meaningful relationships with mentors and seeking out opportunities for women-owned businesses.
- Though male entrepreneurs outnumber female founders in every age group, young women under the age of 25 are catching up.
The National Women’s Business Council found that the difference between the number of male and female founders is smallest for those under the age of 25. Indeed, millennials are more likely to launch their own businesses and at a younger age, according to the 2016 BNP Paribas Global Entrepreneur Report. What’s more, the report found that women are more successful than their male counterparts.
That’s great news for the future. Thanks to women who have paved the trail ahead of them, young women appear ready and willing to take the lead and create something of their own.
In 2017, female business owners continued to prove that they are ready for the challenge of entrepreneurship, regardless of the work required to reach success. Likewise, new groups, including minority women and young women, demonstrated that they are eager to take control of their own reins.
All indicators point to 2018 becoming another big year for female business owners as they set their sights on growth, achievement and, just maybe someday, Forbes’ annual list of self-made billionaires. (It did, after all, list a record 56 women in 2017).
The post was contributed by Krista K Stein, Channel Director at Wolters Kluwer’s BizFilings.