The Impact of women-led businesses

The considerable economic impact of women-led business in the USA has been illustrated in a new infographic released by the National Women’s Business Council.

The National Women’s Business Council (NWBC) argues that the term “women-led” is a more accurate measure of economic activities than “women-owned”.

NWBC Research and Policy Director, Emily K. Bruno, said:

“Successful women-led businesses have a variety of trajectories and strategies for growth, and there is no one right way to grow a business. We’ve seen that in many cases, successful women entrepreneurs running high-growth companies have chosen to give up equity in order to raise capital.”

She added that “while women-led businesses are less than 51% owned by women, women still have a significant leadership position and ownership within the company, and this matters.”

Highlighted information from the infographic

Women’s economic impact is greater than people realize – 36% of employer companies are either women-led or women-owned – 17.5% of business that have employees are 51% owned by at least one woman. However, 18.8% of employer companies are at least 30% owned by women and have a female in a leadership role.

Women’s impact on the American economy is much clearer when those two numbers are added together.

The total becomes 36%, i.e. employer firms that are women-owned or led.

The NWBC wrote “When not focusing on women’s leadership role within a company, the numbers look even better.  42.4% of businesses are at least 30% owned by women.  These firms capture 26.1% or $2.6 trillion in receipts.”

There is no one right way to go – according to the NWBC, companies make more money when there are more owners. Companies owned by both genders generally perform better than firms owned by either just men or just women.

However, women tend to take on business partners much less than men do.

The vast majority (89%) of companies owned entirely by women belong to just one person.

“Women in business” requires a broader definition – many women have founded companies that have grown into multi- million or billion enterprises. In the majority of cases they have entered partnerships with investors and now own less than 51% of their firm.

If women’s impact on the economy only includes those with a majority stake (51%+), these women would be excluded.

In another study, the NWBC reported that during the Great Recession (2007-2010), women-owned businesses performed just as well as men-owned businesses.

The National Women’s Business Council (NWBC) is a non-partisan federal advisory council created to serve as an independent source of advice and counsel to the President, Congress, and the U.S. Small Business Administration on economic issues of importance to women business owners.