Between 2007 and 2016, women entrepreneurship has grown dramatically with women-owned firms now numbering 11.3 million (11,313,900), employing 9 million (8,976,100) and generating more than $1.6 trillion ($1,622,763,800,000) in revenue. That’s according to the 2016 State of Women-Owned Business Report commissioned by American Express OPEN. The report also noted that it is minority women–namely Black women–who are spearheading this explosion in female-owned enterprise.
Over the course of the nine years studied, there was an increase of 3.5 million women-owned firms. Of these new businesses, 78% (approximately 2.8 million) are owned by women of color. That equated to a launch of 842 new minority women-owned firms each day with a racial breakdown of 327 Latina-owned, 311 African-American-owned, 122 Asian American-owned, 17 Native American/Alaska Native-owned and 5 Native Hawaiian/Pacific Islander-owned firms.
For African American women-owned firms, the report found that these businesses are most likely to fall under personal care services (as in hair and nail salons), health care and social assistance (as in child day care and home health care) sectors as opposed to typically higher paying professional, technical or scientific service sectors. However, as Forbes reported in March and earlier this week, Black women are quickly emerging as trailblazers in all industries including academia, government and non-profit organizations.
What is especially positive about Black female entrepreneurship is the desire of Black women business owners to encourage other Black women to follow their own business ownership pursuits. For example, as Forbes reported, the first Black Women Tech Talk in February of this year was launched with the specific intent “to inspire and support Black women in building the next billion-dollar tech industry.” Organizers of the event also chose six tech entrepreneurs to compete in a 60-second pitch contest.
The American Express OPEN report specifically highlighted that Black female-owned businesses account for the highest number of businesses among minority women-owned businesses. An estimated 1.9 million firms are owned by Black women while just under 1.9 million and approximately 922,700 are owned by Latinx women and Asian American women respectively. Rounding out the pack are Native American/Alaska Native women owners with 153,400 and Native Hawaiian/Pacific Islander women owners with 31,100 businesses.
The top ten states for women-owned business are California, Texas, Florida, New York, Georgia, Illinois, Michigan, Ohio, North Carolina and Pennsylvania. The top ten metropolitan regions for women-owned businesses are New York City, Los Angeles, Miami, Chicago, Atlanta, Dallas, Houston, Detroit, Washington DC, and San Francisco.
In general, women-owned businesses are outpacing national businesses in terms of new establishments, hiring and revenue. While the national number of firms have increased at a rate of 9% between 2007 and 2016, the number of women-owned firms have increased by a whopping 45%. As hiring across national firms has seen a decline of -1%, women-owned firms have experienced a hiring increase of 18%. And women-owned firms are beating the national revenue rates of +27% by 8 points with a revenue rate of +35%.
In particular, women of color have increased their rate of new establishments by 126%, making up nearly half of all current women-owned firms. Minority women-owned firms employ approximately 2 million workers and generate $344 billion in annual revenue.
What are your thoughts on these findings? Are you surprised?