Here’s a quick snapshot of women-owned businesses. The U.S. has 12.3 million women-owned businesses that generate a combined $1.8 trillion a year in the economy.1 This is a staggering increase from having only 402,000 women-owned businesses in 1972, thanks in large part to a 114% increase in women entrepreneurs over the last 20+ years.2 However, women-owned businesses still only account for 40% of the overall U.S. businesses — and when it comes to small businesses specifically, women own only 31%.3
What does this mean for you? Well, the point is that women-owned businesses are on the rise, and it’s for several very good reasons — all of which point to better returns, happier employees and greater diversity in the workforce.
Below are some of the main reasons you should consider working with or for women-owned businesses.
Women leaders have the characteristics for positive change
Being a leader isn’t just a title, it’s a continual challenge to those in charge, testing their ability to motivate and guide others in the company — and women are shown to exhibit greater overall leadership traits.
According to a Harvard Business Review study, women are thought to be more effective in 84% of the capabilities that differentiate excellent leaders from average or poor ones. These capabilities included “takes initiative,” “practices self-development,” “drives for results,” “collaboration and teamwork,” “inspires and motivates others,” “champions change” and others.4
Interestingly and disturbingly, the data shows women tend not to be as generous when rating themselves. The authors of the study hypothesized that this could be due to a confidence gap where some women leaders are likely more competent than they believe they are, whereas some male leaders are overconfident in their abilities.
Women create healthy workplace cultures
Exhibiting good leadership characteristics, as noted in the last section, has far-reaching impacts, some of which are positive effects on how employees view their job opportunities and workplace culture.
A study conducted by The Harris Poll revealed half of Americans would prefer to work for a female-led organization over a male one. The reasons for this are multi-faceted. 71% of both men and women polled felt that having a woman in a leadership position makes them believe they too can achieve a leadership position. Essentially, this is diversity in action. Many companies can speak to promoting diversity, but ones that have the evidence to back it up help employees believe equal opportunity is a principle and practice of the company.
Other reasons revealed in the poll were that female-led companies were more purpose-driven, more likely to include access to childcare and more likely to offer equal pay.5 Though equal pay has been a benefit sought for decades, the others have become much more vital in the last couple of years due to the pandemic.
“Access to childcare” can also be exhibited as more flexible work hours and locations so parents can work remotely around their childrens’ needs rather than the other way around. Likewise, the pandemic encouraged many workers to choose jobs based as much on emotional fulfillment as financial security. Thus, having a leader who is more purpose-driven is even more important today.
Women-led companies outperform those led by men
From big companies to small businesses, women-led organizations tend to deliver a greater return than those led by men. S&P’s “When Women Lead, Firms Win” report found that female CEOs and CFOs result in financial gains for the company. The report showed that “in the 24 months post-appointment, female CEOs saw a 20% increase in stock price momentum, while female CFOs saw a 6% increase in profitability and 8% larger stock returns.”6 If you’re wondering why this occurs, see the sections above! Collaborative leadership that creates an environment where people are both driven and inspired is likely to lead to better employee performance and greater bottom-line results.
When you work with a woman-owned business, it benefits yours
Diversity is incredibly important and valuable. When you choose to partner with a woman-owned business, it shows your employees and customers that you value different perspectives, and it could potentially help you expand into more diverse markets. These different perspectives are also more likely to lead to innovative ideas that could, in turn, lead to more opportunities for growth and positive change. Additionally, you can receive tax incentives. The federal government offers several tax incentives to companies that work with certified women-owned businesses. Check with your accountant to see what’s available.
How can you find a women-owned business?
There are several ways to find and identify a women-owned business.
First, if there’s a company you’re considering working with or for, go to its website and look at the leadership team or “about” section. If you don’t have a specific company in mind, you can visit online directories for your city or state that identify women-owned businesses. Another option is to follow community, chamber of commerce, and state awards recognizing female-owned businesses.
LimeLight Marketing, as an example, was recently named the 2021 woman-owned business professional service firm of the year by the Kansas Department of Commerce, Office of Minority & Women Business Development. These awards cover multiple industries, shining spotlights on many types of businesses throughout the state.
Does this mean you should stop working for or with companies that are led by men? Of course not. However, if you’re unhappy with said company, the data is overwhelming that it’s worth looking at the leadership and considering working with or for a female-owned company to promote greater diversity and see better results.
Sources:
1 WBENC.org, “Behind the Numbers: The State of Women-Owned Businesses in 2018,” October 10, 2018
2 Inc., “There are 114 Percent More Women Entrepreneurs Than 20 Years Ago and It’s Not Necessarily a Good Thing,” Shana Lebowitz, August 13, 2018
3 Guidant, “Women in Business – 2021 Trends”
4 Harvard Business Review, “Research: Women Score Higher Than Men in Most Leadership Skills,” Jack Zenger & Joseph Folkman, June 25, 2019
5 GlobeNewswire, “Research Reveals Half of Americans Want to Work for a Female Leader,” January 25, 2018
6 Nasdaq, “S&P Global Releases ‘When Women Lead, Firms Win’,” October 16, 2019
Questioning is at the core of Cody Cash’s approach to branding, marketing and life in general. Asking why and trying to uncover answers has been a driving force in his education and career, leading down a path that has helped a wide range of brands and products in B2B and B2C channels.
Cody earned his bachelor’s degree in philosophy from Missouri State University and Ph.D. in philosophy from the University of Arkansas, specializing in philosophy of mind. Though not necessarily the norm for a career in copywriting and creative direction, philosophy and a philosophical approach has proven to be a valuable asset when working in advertising.
After almost two decades spent primarily in food marketing with major brands, Cody moved to LimeLight Marketing in the role of creative director.
Connect with Cody: cody.cash@limelightmarketing.com or on LinkedIn.
