Historically, women-owned small businesses have lagged behind other small businesses in terms of growth and hiring. However, recent data show that this gap is closing. In fact, women business owners are more optimistic about their growth and hiring than other businesses.
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Women are More Bullish
The 2019 Bank of America report showed that the 84% of women-owned businesses expect year-on-year sales growth. In addition, 73% of them expect to expand their businesses in the coming year. In comparison, 66% of all other business are as bullish on hiring. In other words, women are planning for growth in a big way.
Number of Women Owned Business are Growing
A report by American Express also showed very encouraging trends. From 2014 – 2019, the number of women owned businesses increased by over 20%. When we look at these numbers by ethnicity, it’s even more promising. In fact, the number of African American women-owned business grew by more than double this rate. They grew by 50%.
Barriers Remain – Primarily in Raising Capital
As we’ve mentioned before, gender bias in lending and raising capital is very real. The Bank of America report highlights this issue. Sadly, over 50% of women-owned ventures said that they do not have equal access to the best loans and capital. There are some efforts being discussed in Washington. For example, an angel investor tax credit is being explored as an incentive for investors to support local women-owned small businesses. It may be gaining momentum, but it’s a long hill to climb. In fact, only a bit more than 2% of the total venture capital investment went to women-owned ventures.
While these numbers are extremely encouraging, work still remains to close the gender gap. If you are woman-owned small business, it is important to ensure that you have the strongest pitch and plan together when raising capital. It is grossly unfair, but in order to win, your pitch will need to be superior to male-owned pitches. I wish it were different, and hopefully, soon, it will be. But, until then, it’s best to go in with your eyes wide open. Don’t be discouraged. If you have a great idea, it can be done.