In honor of National Small Business Week, let’s celebrate some great news about U.S. entrepreneurship: More and more women are starting their own companies, at a rate that outpaces the national average.
According to the National Women’s Business Council, the number of women-owned companies grew by 52 percent between 2002 and 2012, compared to the 20 percent increase in all companies. Women-owned businesses employed 8 million people and generated $1.4 trillion in revenue in 2012.
You can see echoes of the trend locally. Missouri experienced 24.4 percent growth in women-owned businesses between 2007 and 2012. Kansas had an 18.4 percent gain.
Nationally, there also are many more minority women who have started their own companies. Between 2002 and 2012, there was a 315 percent increase in the number of companies owned by minority women.
Rosana Privitera Biondo has been the president of local contractor Mark One Electric since 1994, and women entrepreneurs have made a great deal of progress since then, she said. Biondo can name a string of Kansas City women who are doing well in carpentry, roofing, HVAC and other construction-related fields.
“I would say that those ladies are soaring, and their companies are prospering,” said Biondo, who sits on the National Women’s Business Council. The council is an official nonpartisan board that advises the White House, Congress and the U.S. Small Business Administration on issues important to women entrepreneurs.
Despite the progress, Biondo noted, there are still obstacles that are keeping women entrepreneurs from flourishing.
At the top of the list is access to capital. Male entrepreneurs typically find it easier to access funding for their businesses than women do, and that can limit their ability to hire employees and scale up operations.
According to the National Women’s Business Council, women entrepreneurs start their companies with an average of $75,000 in startup capital compared to $135,000 for men. Men are twice as likely to use a bank loan to buy or start a business.
Also, the federal government’s contracting programs—which are supposed to encourage women- and minority-owned companies—don’t always work as intended, Biondo said.
For example, let’s say a certified MBE or WBE company has a single year of exceptionally high sales. That one year might have been a one-time occurrence. But it could cause the company to lose access to government contracting programs that it needs to continue growing.
One possible solution, Biondo said, would be a new “medium-size business” certification for companies that grow out of procurement programs for small companies.
The good news is that government leaders do want to see women entrepreneurs succeed. While there’s more to be done, “I know that we have their ear and they are very much listening,” Biondo said.
