The State of Women's Entrepreneurship Today
The Center for Women’s Business Research released its biennial update on the state of women’s entrepreneurship today showing that women own a 50% or greater stake in nearly half of all privately-held businesses in the United States and that these businesses spend more than half a trillion dollars on payroll and benefits. The report ocuments the increasingly vital contribution of women-owned firms to the economy by delineating the growth in number, revenues and employment as well as providing, for the first time, estimates of these firm’s business-related expenditures.
As of 2004, there are an estimated 10.6 million privately-held firms in the U.S. that are 50% or more women-owned, accounting for nearly half (48%) of all privately-held firms. These firms generate $2.46 trillion in sales and employ 19.1 million people nationwide.
“We estimate that women-owned firms (50% or greater ownership share) are growing at close to twice the rate of all privately-held firms, 17% vs. 9%. These businesses are a critical component of the economy, not only in terms of their influence, but also in terms of their economic impact,” said Myra M. Hart, Chair, Center for Women’s Business Research and Professor, Harvard Business School.
Health benefits comprise the largest share of benefit expenditures, with 2004 spending estimated at $38 billion. Estimated spending on retirement benefits ($14 billion), life insurance ($1 billion), and disability insurance ($1 billion) comprises $16 billion, for a total of $54 billion in benefit expenditures. Payroll expenditures are estimated at $492 billion per year.
Women entrepreneurs also are major consumers of business products and services. The Center analyzed annual spending in the four areas for which there is publicly available data, and estimated that women-owned firms spend a total of $103 billion annually on the following categories: information technology ($38 billion); telecommunications ($25 billion); human resource services ($23 billion); and shipping ($17 billion).
Release Date: April 28, 2004
Center for Women’s Business Research
Trends In Home-Based Small Businessses
In today's economy, home-based businesses are a growth industry to watch.
Nearly two-thirds (63 percent) of home-based women-owned businesses employ people in addition to the owner. Full-time employment, including the owner, numbers 5.6 million people. Part-time or contract income is provided for an additional 8.4 million people.
Demographically, home-based women business owners are very similar to non home-based women business owners. While their education level is somewhat higher, their age distribution and racial composition is the same as non home-based women business owners.
Home-based businesses owned by women are much more likely to be newer, smaller firms or in the field of business services.
The average age of a home-based woman-owned business is 6.1 years. These businesses stand the test of time.
Key issues for women-owned businesses, regardless of location, include maintaining business profitability, managing and maintaining business growth, managing cash flow, and keeping up with technology.
Information technology is making it all possible. Information technology is opening doors for all kinds of new businesses by allowing for greater freedom of choice. Women entrepreneurs have taken advantage of these choices and created home-based businesses to better fit their lifestyle needs.
Home-based women business owners are technologically savvy. In fact, home-based women-owned businesses are just as technologically savvy as other businesses with over half (56 percent) having at least one computer and nearly 4 in 10 (39 percent) owning more than one. Two-thirds (66 percent) have a computer fax/modem, 55 percent use a cellular phone, 30 percent have CD/ROM capability, and 32 percent use an on-line information service.
Home-based women business owners are much more likely than other businesses to use private sources and credit cards to finance their businesses than they are to depend on business loans, leased equipment, or vendor credit. Only 12 percent of home-based women-owned businesses used a commercial loan during 1994, compared to 40 percent of non home-based women-owned firms.
National Foundation of Women Business Owners 4/97
Home-Based Businesses
Home-based businesses, which make up roughly half of all U.S. businesses, are a wellspring of economic activity. Homes are, in effect, do-it-yourself business incubators, which collectively provide start-ups with an entry point into the business world.
CHARACTERISTICS OF HOME-BASED BUSINESSES
Home-based businesses are the predominant form of small business. Over two-thirds of all sole proprietorships, partnerships, and S corporations are home-based. Home-based businesses are concentrated in relatively few industries. Over 60 percent of home-based businesses are in the service and construction sectors.
Over 90 percent of home-based businesses are sole proprietorships. Home-based businesses are also quite small. At the time data were last collected (1992):
In terms of employment:
- Over 90 percent of home-based businesses had no employees,
- 7.2 percent of all home-based businesses reported fewer than five employees,
- Just over 1 percent reported 5 to 19 employees, and
- About 0.2 percent reported 20 or more employees.
In terms of income:
- Over three quarters (77 percent) had gross receipts of less than $25,000,
- 96 percent had gross receipts of less than $50,000,
- 3.5 percent had gross receipts of $100,000 or more, and
- Less than 1.0 percent had gross receipts of $500,000 or more.
Small Business Administration, February 2004
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