Since October is National Women's Small Business Month, it’s a fitting time to recognize the critical role women-owned small businesses play. As more and more women enter the entrepreneurial ranks, their contribution to the economy is impressive. This growth in numbers is crucial to the nation’s overall economic health.
What Constitutes a Small Business?
People are often surprised to learn just how big a small business can be. The Small Business Administration (SBA) sets size standards based on a company’s industry. In general, however, an enterprise with fewer than 1500 employees and less than $38.5 million in revenue falls under the small business category.
Many small businesses are so small that they are considered micro-businesses. This designation typically applies to companies that have ten or fewer employees. Many freelancers, creatives, and consultants fall into this category.
Women own and operate 39% of all small businesses in the US, up from less than 5% in 1972. With that growth in mind, here are seven reasons women-owned small businesses are crucial.
1. Women-Owned Small Businesses Provide Millions of Jobs
Women-owned companies employ more than nine million people, and a large percentage of those employees are other women. Since women start hundreds of new businesses every day, their ability to hire even more people is growing by leaps and bounds.
Many of these jobs are in professional services and healthcare, but the variety is increasing each year. In particular, the number of women-owned construction and trade companies is escalating rapidly.
2. They Create Healthy Work Environments
Women who own companies tend to establish a collaborative and supportive work culture for their employees. Some consistent hallmarks in women-owned businesses include:
Flexible Work Schedules
Adequate Time Off To Care For Children
Remote Work Options
Encouraging Vacations and Self-Care
More and more frequently, job seekers purposely look for companies with women at the helm because of these attractive opportunities.
3. Women-Owned Companies Are Transformational
Despite being kept out of leadership roles for centuries, women are tremendous leaders. And they are particularly excellent at heading up transformations for organizations.
Women often begin their businesses from a desire to transform their lives and the lives of others. This goal lets them create an intuitive workplace that allows change and revolution in the world. Leadership in the hands of women creates transformation.
4. Women Guide Most Household Spending
Globally, women determine nearly 90% of how their households spend and purchase. This number represents a tremendous amount of power in the economy. And when women start businesses, they have that much more influence over how money moves.
Small businesses, in general, are essential to the marketplace. And 48% of the money spent at small businesses stays in the local economy. Combining that stat with the financial decision-making of women creates powerful opportunities.
5. Women Entrepreneurs Place Mission First
Research shows us that employees who connect with their employer’s mission are more engaged and productive. Studies also show that women business owners are better at helping develop this connection to the company’s vision and mission.
With effective, heartfelt communication, women-owned small businesses can help their employees feel valued and nurtured. They foster connectedness and pride in the values of the company.
6. Women-Owned Businesses Embrace Diversity
BIPOC women make up 50% of women-owned businesses, helping to bring diverse voices, experiences, and expertise to the marketplace. Women also tend to be more aware of diversity and inclusion in their hiring decisions and seek out a diverse group of candidates when building their teams.
7. They Create Success
Although women-owned companies do not seek funding at high rates, they are successful when they do it. They have nearly a 70% success rate with crowdfunding, compared to just over 60% for men.
Some studies indicate that, compared to those led by men, companies led by women are more likely to:
Hit their financial targets.
Create a loyal and engaged team of employees.
Women-owned businesses generate $1.8 trillion in revenue each year. Yes, that’s trillion with a “t.” This level of success may have been unimaginable for previous generations, but it’s a clear reality now. And that number will only continue to grow.
Women-Owned Small Business (WOSB) Certification
Many women who own companies seek WOSB certification through the SBA. This designation allows eligible companies to apply for certain federal contracts. The aim is to have at least 5% of federal contracts going to women-owned small businesses.
To be eligible for this certification, a company must meet the following requirements:
Women who are US citizens must own at least 51% of the company.
Women must be responsible for day-to-day operations and long-term decisions.
The company must qualify as a small business.
Achieving WOSB certification allows business owners to take advantage of education and mentorship. It also provides owners with leads for proposals and bids and connects them with contractors looking for WOSB-certified companies. Many women find that the certification opens doors to lucrative opportunities.
Changing the Face of Business
As more and more women start companies, traditional networking and collaboration are changing, too. One national organization, The MOB Nation, created a unique networking space specifically for Mom-Owned Businesses (hence, the MOB).
Founded in Portland, OR, by Aria Leighty, The MOB Nation is a group that values community over competition as it seeks to empower its members. They aim to get more money into the hands of women who are running businesses.
Another organization, The Southern Coterie, supports creative entrepreneurs in the South through inspiration, masterminds, membership, and ongoing training. Founders Cheri Leavy and Whitney Long created TSC as a “virtual front porch” for business owners. They also offer an annual conference for live, in-person networking and community building.
The New England Coastal Creative also seeks to elevate women makers and creators through community and business development. Its members represent a wide range of entrepreneurs and industries. Founder Kim Thomas cherishes the opportunity to energize, excite, and engage creatives in their business journey. The first in-person conference for this community will take place in Newport, Rhode Island, at the end of September.
More and more groups are popping up with the express purpose of nurturing and strengthening women-owned businesses. The traditional schmoozing of networking is giving way to a more intuitive relationship-based atmosphere.
Protect Your Small Business
No matter where you are in your business journey, it’s crucial to protect what you create. From contracts to trademarks and everything in between, guarding your work is essential.
If you’d like help working through any of these processes, schedule your time with me today. We will dig into the legal side of your business so that you understand the right next step to take. Let’s get started!