This week preliminary data from the 2012 Survey of Business Owners was released by the U.S. Census Bureau and with that we released our analysis of the state of women-owned businesses. And, the numbers are good, even better than we expected, for women-owned businesses! As of 2012, there are 9.9 million women-owned businesses – a 27.5% rate of increase from the last time this survey was done in 2007. Women-owned businesses are bringing in $1.6 trillion in revenue and employing 8.9 million people. That’d be 2.1 million more women-owned businesses and almost 1.5 million more jobs since 2007
The Survey of Business Owners, also known by data nerds as the SBO, “provides the only comprehensive, regularly collected source of information on selected economic and demographic characteristics for businesses and business owners by gender, ethnicity, race, and veteran status.” The survey looks at all nonfarm businesses filing Internal Revenue Service tax forms as individual proprietorships, partnerships, or any type of corporation, and with receipts of $1,000 or more. The SBO covers both firms with paid employees and firms with no paid employees. This data provides the most accurate indicators of the growth in numbers of women-owned firms and their corresponding economic impact. It’s arguably the most comprehensive story of women’s business ownership and particularly interesting, since this data includes the time period of the great economic recession. This preliminary data release includes initial information on total receipts, employees and payroll, classifiable by ethnicity, gender, race and veteran-status, and then aggregated by industry sector and state-level geography.
Let me also note some important definitions before I dive into all of the stats. Women-owned businesses (WOBs), as defined by the US Census Bureau, are businesses in which women own 51 percent or more of the equity, interest, or stock of the business. Men-owned businesses (MOBs) are defined as men owning 51 percent or more of the equity, interest, or stock of the business. Equally men-/women-owned businesses those in which the equity, interest, or stock of the business is shared 50-50 among men and women owners. And a special note about the data that was released – they did not publish tables for publicly held, foreign-owned, and non-profit businesses; that information will come at the time of the final release.
Now, the numbers. We’ve been waiting with baited breath – since 2010 when the 2007 survey numbers were released. I both suspect and hope that if you are reading this post, you are as excited about this new data as we are.
Here’s an overview:
- As of 2012, there are 9.9 million women-owned businesses, reflecting a 27.5% rate of increase from 2007 to 2012.
- For context, men-owned businesses grew 5.43% between 2002 and 2007 (13,900,554 firms) and 7.87% between 2007 and 2012 (14,994,525).
- Women-owned firms account for 36.2% of all non-farm and non-publically-held businesses. That’s up from 29.6% in 2007!
- Women-owned businesses generated 1.6 trillion in total receipts, which is up from 1.2 trillion in 2007. An increase of 35%! For comparison, male-owned businesses saw an increase of 33%.
- Of all women-owned firms, 89.4% have no employees other than the owner. That’s an increase in percentage from 2007.
- Of all women-owned firms, 10.6% are employer firms. This is a slightly smaller proportion than it was in 2007, but still an increase in 143,000 women-owned employer firms in the 5 year period.
- These women-owned employer firms employ 8.9 million people. The increase in employees of women-owned firms is an increase of 19.5%; the increase in men-owned businesses was only 11.5%.
The story of increasing economic impact of women is embedded in these numbers too. While the Census only made public information about the total number of receipts for businesses in this release, we’re eager to see what’s happening for women-owned businesses that make less than $24,999, between $100K and $999,999, and then over the $1 million mark. That will be a conversation for later; I’m sure of it.
Some of the most notable trends in growth that we can see within the published data are happening with women of color. Let me share.
- There are 1,526,699 African American women-owned businesses in the United States – that is an increase of 67.5% from 2007. The increase for African American WOBs from 2007-2012 is slightly higher than 2002-2007 (67.5% compared to 66.7%). There is a notable increase in the proportion of African American WOBs to all WOBs – up from 11.7% in 2007 to 15.4% in 2012. We also learned there has been a significant decrease in growth in receipts for African American WOBs – which increased 78.1% from 2002-2007 compared to just 19.7% from 2007-2012.
- There are 1.48 million Hispanic women-owned businesses in the United States. This reflects an incredible 87.31% increase since 2007. For some context: Hispanic men-owned business grew 39.34% since 2007; and Hispanic women-owned businesses grew 45.7% from 2002 to 2007. And, for even greater context, non-minority women-owned businesses increased by 10.1 between 2007 and 2012. There was nearly a 10% increase in the proportion of Hispanic WOBs to all Hispanic nonfarm and publicly-held businesses. This is the fastest growing segment of women-owned businesses! Also, the total receipts of Hispanic women-owned firms grew 50.28%. For employer Hispanic WOBS, the average receipts increased from $745,729 in 2007 to $824,301 in 2012.
- There are 754,874 Asian American women-owned businesses in the United States – that is an increase of 44.34% from 2007, but a notably lower increase than the 54% it was from 2002 to 2007. There is a significant increase in receipts for Asian American WOBs in 2012 though, up $75.8 billion in 2012. And like other minority women-owned businesses, there are fewer employer Asian American WOBs in 2012, but Asian American WOBs made significant gains in the number of employees (up 300K!) and their average receipts (up to $1.1 million in 2012 from $794,657 in 2007).
Another tremendous area of growth was in veteran WOBs. Per the 2012 survey, there are 384, 548 veteran women-owned businesses; in 2007, there were 97,111. The proportion of veteran WOBs to total WOBS increased from 1.2% in 2007 to 3.8% in 2012. And the proportion of veteran WOBs to all veteran nonfarm and publicly-held businesses increased by 10% percentage points – from 3.97% in 2007 to 15.14% in 2012. Like the minority women, there are fewer employer veteran WOBs too, but they employ significantly more people than they did in 2007. The number of employees jumped from 69,875 in 2007 to 107,542 in 2012.
There is a ton of speculation to be done about this new data – about the growth in number and increasing impact, and also the continuing struggle to achieve parity with men-owned businesses. There are interesting surprises and trends, like: the rate of growth for women-owned employer firms is 3 times that of men-owned employer firms, or the rate of growth for total women-owned businesses is almost 4 times the rate of men-owned businesses – thanksto the increasing supports and resources for women entrepreneurs as they start, scale, and grow their businesses. Or the increases for minority women-owned businesses, particularly the huge increases for Hispanic women-owned businesses – who are responding to the needs of a diversifying consumer base and jumping at opportunities to create goods and services of value. Or even the rise in sole proprietorship (nod to the affordable health care act and the gig economy)
To be sure, the areas of growth are considerable: Women own 36.2 % of all non-farm and non-publicly held businesses / 20% of all employer firms, but yet receive less than 5% of venture capital funding and less than 5% of government spend on small businesses. And even with 1.6 trillion in revenue, women-owned businesses only account for 4.82% of all firm revenues – which is notably still up from 3.95% in 2007.
Again, we can hypothesize about all of these numbers – and spin them in many ways. But what is definitely clear is this: These numbers are calls to action for…
- More data, and more timely data! (We’re excited about the new partnership between the Kauffman Foundation and the Census Bureau for an annual SBO.)
- Further research into the industry differences of men and women, and pipelines into the high-growth and high-revenue industries
- Our continued commitment to increase women’s access to the essential business assets – like capital or market opportunities – and tools and resources to support women in pursuit of their business dreams.
As an advisory council on issues of economic impact and importance to women business owners, the Council is certainly excited about this new data and the final data release on the horizon. We’ve been crunching all of the numbers to turn out helpful fact sheets. Please be sure to check out for www.nwbc.gov for all of the latest information. And, just so you know, we’ll also be working with the final dataset, upon its future release by the Census Bureau, to do more of a longitudinal study of changes between 2002 and 2012 later this fall.
And thank you – for your work, your innovative ideas, for creating jobs, for supporting women in business and for making our economy stronger and our communities better. At the Council, we believe data is the foundation – and with that, together we can build towards a more equitable future.