While women-owned businesses are on the rise (and that is great news), most of these businesses have no employees other than the owner.  As of 2012, 89.4% of women-owned businesses fit this category.(a)  This is not necessarily a bad thing, but we can draw both positive and negative implications from this data.

A few questions I have…

Why do these businesses not have employees? Is it perhaps the type of business that wouldn’t need employees such as a professional service business?

Or, is it possible that some women fear the “big ideas” will require money that they don’t have/think they can’t get.

Of course, there is nothing wrong with being a solopreneur (after all, I am one), and I love what I do, as I’m sure many others do as well.  But when I see that nearly 90% of all women-owned businesses have no employees, it makes me wonder if some of these women stopped short of fulfilling bigger dreams due to fear of financing them.

The reality though, is that there are many places where women can get financing for their business.  In fact, there are investors who are seeking you out.  Why?

1.  WOMEN-OWNED BUSINESSES STRENGTHEN THE ECONOMY.

Despite most women-owned businesses being solopreneurial, they still create jobs and significant revenue.  From 1997 to 2012, women-owned businesses added over 510,000 jobs. In 2007, the total sales/receipts from privately held women-owned businesses increased by 46% since 2002.  Growth among men-owned businesses was 28% in the same time period.  And the number of women-owned firms between 1997 and 2012 rose by almost 3.5 million.

2.  WOMEN-OWNED BUSINESSES SHOW GREATER FINANCIAL PERFORMANCE.

According to Catalyst in The Bottom Line: Corporate Performance and Women’s Representation on Boards (2004–2008), “…Fortune 500 companies, firms that had at least three women board directors (WBDs) for at least five years, outperformed those with zero WBDs by 84% on return on sales (ROS), 60% return on invested capital (ROIC) and 46% on return on equity (ROE).” (b)

Companies that have a greater percentage of women at senior executive level, exhibit higher margins in EBIT.(c)  Venture-backed companies are also more likely to be profitable or go public, if there is a higher percentage of female executives.  According to Dow Jones Venture Source, Women at the Wheel: Do Female Executives Drive Start-Up Success?, (2012), “The overall median proportion of female executives is 7.1% at successful companies and 3.1% at unsuccessful companies.”(d)

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