New Report Finds Growth of Women Business Owners Outpaces the Market

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Wells Fargo & Company (WFC) - Women-Owned Businesses Drive Economic Growth, According to 2024 Wells Fargo Impact of Women-Owned Business Report

Insights

Economist

The substantial growth in women-owned businesses, as reported, has significant implications for economic development and labor markets. The reported increase in the number of women-owned businesses at a rate nearly double that of male-owned businesses indicates a shift in the entrepreneurial landscape. This trend suggests a diversification of business ownership that could lead to more inclusive economic growth and resilience.

Women entrepreneurs appear to be contributing substantially to job creation, with a reported addition of 1.4 million jobs during the pandemic. This figure is particularly noteworthy given the broader economic context of job losses in many sectors during the same period. The growth in employment within women-owned businesses may have helped to mitigate the negative impact of the pandemic on employment levels.

Furthermore, the increase in revenue by $579.6 billion among women-owned businesses highlights their growing economic influence. This revenue growth could indicate an expansion in consumer markets, as businesses owned by women may be more likely to address market gaps or serve niche demographics. Additionally, the reported revenue growth among businesses with revenues between $250,000 and $999,999 suggests that not only are small and medium-sized enterprises (SMEs) thriving, but they are also scaling up, which is critical for sustained economic growth.

Market Research Analyst

The data on the growth of women-owned businesses can offer valuable insights for market strategists and investors. The reported outpacing of men's business growth in terms of the number of firms, employment and revenue indicates a shift in market dynamics. This trend may reflect changing consumer preferences, possibly towards businesses that are perceived as more community-oriented or innovative in their approach to problem-solving.

Investors might see this as an opportunity to diversify their portfolios by investing in companies that support or are led by women. As these businesses grow, they could open new market segments or enhance competition in existing ones, potentially leading to higher returns on investment. Additionally, the resilience displayed by women-owned businesses during challenging economic times suggests that these enterprises might be less volatile and more sustainable in the long term.

The significant growth of businesses in the $250,000 to $999,999 revenue range indicates a maturation of women-owned businesses that may have started as micro-enterprises. This progression into higher revenue brackets could signal the potential for these businesses to contribute more significantly to GDP and to become influential players in their respective industries.

Financial Analyst

The reported performance of women-owned businesses has several financial implications. The robust growth in the number of women-owned businesses, combined with their ability to add jobs and increase revenue, suggests that these businesses are not only starting strong but also scaling effectively. This scaling is a positive sign for investors and creditors, as it implies good management and the potential for sustainable growth.

The data also suggests that women-owned businesses may be more resilient in the face of economic adversity, which could make them attractive to investors looking for stability. The ability of these businesses to grow during the pandemic, when many others were struggling, could be indicative of strong operational efficiencies, agile business models, or effective crisis management strategies.

Lastly, the growth in revenue among women-owned businesses with annual revenues between $250,000 and $999,999 may attract more interest from institutional investors and larger financial institutions. This could lead to increased access to capital for women entrepreneurs, further fueling growth and innovation in this segment.

The number of women-owned businesses increased at nearly double the rate of their male counterparts

Black women and Latina entrepreneurs emerged from the pandemic stronger than all women-owned employers

SAN FRANCISCO--(BUSINESS WIRE)-- Women-owned businesses continue to fuel the economy, representing 39.1% of all businesses – over 14 million – employing 12.2 million workers, and generating $2.7 trillion in revenue. According to the 2024 Wells Fargo Impact of Women-Owned Business Report, in partnership with Ventureneer, CoreWoman, and Women Impacting Public Policy (WIPP), the number of women-owned businesses between 2019 and 2023 increased at nearly double the rate of those owned by men; and from 2022 to 2023, the rate of growth increased to 4.5 times.

2024 Wells Fargo Impact of Women-Owned Business Report (Photo: Wells Fargo)

Whether it was during COVID-19 lockdowns in 2020 or supply chain disruptions throughout the pandemic, women business owners are driving economic growth:

• During the onset of the pandemic in 2020, despite business closures, women launched more businesses than they closed, while the number of men-owned businesses declined. Women-owned businesses also grew their workforces and increased their revenue while men’s numbers shrank.
• From 2019 to 2023, women-owned businesses’ growth rate outpaced the rate of men’s 94.3% for number of firms, 252.8% for employment, and 82.0% for revenue.
• During the pandemic, women-owned businesses added 1.4 million jobs and $579.6 billion in revenue to the economy.
• Nearly half a million women-owned businesses with revenues between $250,000 and $999,999 grew their aggregate revenues by about 30%, illustrating their ambition, grit, and readiness to cross the $1 million revenue threshold.

“The impact that women-owned businesses make on the economy is undeniable. Even more impressive is that growth in women entrepreneurship – whether it was their workforce or revenue – grew during an extremely difficult time,” said Wells Fargo Women’s Segment Lead for Small Business, Val Jones. “From the trillions in revenue they contribute to the economy to the millions in jobs, women-owned businesses are coming out of the pandemic stronger than they went into the pandemic and many are thriving. It’s a testament to their resiliency and the breadth and depth of support they’ve received from government entities, banks, corporations, and philanthropic organizations that must be sustained.”

Also, during the COVID-19 pandemic and the transition to the post-pandemic period, Black/African American and Hispanic/Latino women-owned businesses increased at a much higher rate than all women-owned businesses. Between 2019 and 2023, Black/African American women-owned businesses saw average revenues increase 32.7% and Hispanic/Latino women-owned businesses 17.1% compared to all women-owned businesses' 12.1% rise.

Further, women-owned businesses with 50 or more employees account for nearly half of women-owned businesses’ employment and revenues. Currently, women-owned businesses with 50 or more employees average $31.8 million in revenue generating $1.3 trillion in aggregate revenue. If they achieved the average revenue of men-owned businesses with 50 or more employees, they would add $1.2 trillion in revenue to the U.S. economy.

“The surge in growth rates of women-owned firms with more than 50 employees proves their strength and adaptability during and post the pandemic era,” said Wells Fargo Women's Segment Lead for Commercial Banking, Judith Goldkrand. “To sustain the growth and close the gaps, it’s important that we continue to create opportunities that help these businesses flourish, including removing barriers to capital, providing technical assistance, and offering support with business certification.”

Industry trends

More than a decade ago, women-owned businesses were concentrated in just three industries. Now, half of all women-owned businesses (50%) are concentrated in these four industries:

• Other services (hair and nail salons, pet care, laundries, and dry cleaners): In 2023, women owned 2,267,000 other services companies, accounting for 16.2% of all women-owned businesses.
• Professional, scientific, and technical services (legal, bookkeeping, and consulting businesses): In 2023, women owned 2,017,000 businesses in this category, accounting for 14.4% of all women-owned businesses.
• Administrative, support and waste management, and remediation services (office administration, staffing agencies, and security and surveillance services): In 2023, women owned 1,671,000 businesses of this type, accounting for 11.9% of all women-owned businesses.
• Healthcare and social assistance (child day care and homecare providers, mental health practitioners, and physicians): In 2023, women owned 1,588,000 healthcare and social assistance companies, accounting for 11.3% of all women-owned businesses.

While these industries have the most women-owned businesses, between 2019 and 2023, the sectors that saw the most significant growth (50%) were in finance, insurance firms, real estate, transportation, and the warehouse industry.

Women-owned businesses show growth across the country

The impact of women-owned businesses diverges significantly across the U.S., influenced by varying economic conditions and programs that support their advancement. The report details how their growth plays out across the country, ranking the top and bottom states and Metropolitan Statistical Areas (MSAs) between 2019 and 2023. The states with the highest economic clout for women-owned businesses had strong economies during the pandemic with supportive environments for women-owned businesses:

1. New York
2. North Carolina
3. Georgia
4. Florida
5. California

The top five MSAs had strong economies with a mix of industries, a strong job market, and entrepreneurial cultures in which there was access to capital, government contracting opportunities, training, mentorship, and networking opportunities:

1. Miami, Fort Lauderdale, West Palm Beach – Florida
2. Dallas, Fort Worth, Arlington – Texas
3. Boston, Cambridge, Newton – Massachusetts, New Hampshire
4. Los Angeles, Long Beach, Anaheim – California
5. Phoenix, Mesa, Scottsdale – Arizona

Women-owned businesses could make a greater impact

While women business owners represent 39.1% of U.S. firms, they only account for 9.2% of the workforce and 5.8% of revenue. Closing the gap in average revenues for those ethnically or racially diverse has the potential to generate $667 billion in additional revenue, while closing the gap in average revenues between women- and men-owned businesses has the potential of generating $7.9 trillion in additional revenue to the nation’s economy.

“It’s incredible to see how women are strengthening the post-COVID economy, but their impact can be even greater with additional support, tailored to the needs of specific demographic segments,” said President and CEO of Women Impacting Public Policy, Angela Dingle. “While we’ve seen new mentorship and networking programs emerge, specialized grants, and other services to help support the growth of women-owned businesses, we must continue to do more. By working together, we can create an environment where women can make an even greater impact on the economy and for themselves.”

Explore the 2024 Wells Fargo Impact of Women-Owned Business Report here.

About the Wells Fargo Impact of Women-Owned Business report

The Wells Fargo Impact of Women-Owned Business report – an inaugural report – chronicles the impact of COVID-19 on U.S. businesses and how it opened opportunities for women. It highlights the growth of women-owned businesses from 2019 to 2023, especially those owned by women of color, and explores the intersection of gender with race, business size, industry, and geography. The report was done in collaboration with Ventureneer, CoreWoman, and Women Impacting Public Policy.

Several demographic backgrounders were also created in alignment with the Wells Fargo Impact of Women-Owned Business report:

• Asian American women-owned businesses
• Black/African American women-owned businesses
• Employer/non-employer women-owned businesses
• Hispanic/Latino women-owned businesses
• Women-owned businesses by geography

Methodology

Projected numbers for employer and non-employer firms are based on the U.S. Census Bureau data.

• Employer firm numbers are based on Annual Business Survey (ABS) and Annual Survey of Entrepreneurs (ASE) data.
• Non-employer firm numbers use the Non-employer Statistics by Demographics series (NES-D) data, which is sourced from administrative records.

Projections rely on multiple statistical models and are adjusted using the Gross Domestic Product (GDP) and level of consumption data from the U.S. Bureau of Economic Analysis (BEA), as well as data from the U.S. Bureau of Labor Statistics (BLS) and the Current Population Survey (CPS).

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets, proudly serves one in three U.S. households and more than 10% of small businesses in the U.S., and is a leading middle market banking provider in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 47 on Fortune’s 2023 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.

Additional information may be found at www.wellsfargo.com
LinkedIn: https://www.linkedin.com/company/wellsfargo

News Release Category: WF-SB

View source version on businesswire.com: https://www.businesswire.com/news/home/20240109113716/en/

Media

Brittany Anthony, Wells Fargo

Brittany.Anthony@wellsfargo.com

Source: Wells Fargo & Company

FAQ

What is the 2024 Wells Fargo Impact of Women-Owned Business Report about?

The report highlights the significant impact of women-owned businesses on the economy, showcasing their growth rate, employment numbers, and revenue generation.

How many women-owned businesses are there in the US?

There are over 14 million women-owned businesses in the US, representing 39.1% of all businesses.

What is the employment rate of women-owned businesses compared to men's businesses?

From 2019 to 2023, women-owned businesses' growth rate outpaced the rate of men's by 252.8% for employment.

How much revenue do women-owned businesses generate?

Women-owned businesses generate $2.7 trillion in revenue, contributing significantly to the economy.

Did women-owned businesses perform well during the pandemic?

Despite business closures, women-owned businesses launched more businesses than they closed, grew their workforces, and increased their revenue.