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Women Are Owning More and More Small Businesses
Owning your
own business is often touted as the ultimate coup in the working world. You set
your own hours, pursue projects you’re interested in, and maybe work in your
pajamas.
About 29%
of America’s business owners are women, that’s up from 26% in 1997. The number
of women-owned firms has grown 68% since 2007, compared with 47% for all
businesses.
The
progress for minority women has been particularly swift, with business
ownership skyrocketing by 265% since 1997, the report says. And minorities now
make up one in three female-owned businesses, up from only one in six less than
two decades ago.
Why have
minority women had such an apparent breakthrough in the world of
entrepreneurship? It’s partially a numbers game – in 1997 minority women
represented such a small number of owners – less than one million – that even
moderate growth would have likely helped them outpace the growth of the broader
field of women-owners. But Jessica Milli, a senior research associate at IWPR,
says that the characteristics of minority women who opt to open businesses may
also play a role in the runaway growth.
“Women of
colour are more likely to be younger when they first found their business,”
says Milli. “Given today’s climate – when a lot of purchasing occurs online and
social-media usage can really make or break a business this can mean that those
businesses might have a competitive advantage.”
The growing
prevalence of female entrepreneurs of all races didn’t happen by accident.
Instead, it may be proof that legislation targeted at women and minority
small-business owners are having an effect.
Women
business owners still face a significant wage gap and continually have smaller
amounts of start-up capital than their male peers.
For one,
women-owner businesses make only about 25 cents for every dollar their male
counterparts earn. That’s a much larger gap than the one that exists in the
overall labour market, where the median earnings of women were about 83% of
men’s.
Although
challenges like access to capital and wage equality persist having more women
entrepreneurs may be helpful in and of itself when it comes to boosting the
successfulness of female owners. Researchers who studied the effect of peer
relationships on female entrepreneurs in India found that women who received
business training with a friend were more likely to take out business loans,
and more likely to report higher business activity and household income than
peers who received training without a peer. And though equality on all fronts
is still a long way off, the field of entrepreneurship is “moving toward
equality in terms of representation, which is a great thing,” Milli says.
“Overall, the picture is optimistic.”
Source:
theatlantic.com
