The 2018 State of Women-Owned Businesses report is out and women have been making tremendous leaps. According to the study conducted by American Express, the number of women-owned business have increased from 402,000 in 1972 to 12.3 million in 2018. On average that equals about 1,821 new businesses created per day in the U.S. Revenues for these businesses also rose from $8.1 billion to $1.8 trillion. American Express Research Advisor, Geri Stengel says “a lot of the new growth comes from entrepreneurs who see a need in the marketplace and want to help out.” Some of the most interesting finds in the report include geographic trends for businesses, the growth rate of minority-owned firms, and ages of owners.
Southern states top the list of firms with the fastest growth rates. 1. Florida, 2. Georgia, 3. Michigan, and tied for 4. Tennessee and South Carolina. Stengel attributes this to more people moving to the South because of affordability and better weather. The top five metropolitan areas where women-owned businesses increased their economic clout were mainly in the south as well. 1. Charlotte-Concord-Gastonia metro area, NC/SC, 2. San Antonio, TX, 3. Austin, TX, 4. Indianapolis, IN, and 5. Miami, FL rounded out the top five.
Which may come as a surprise to some is the age trend among business owners. About two thirds or 67% of women business owners are aged 45 or older. Millennials are the next largest age group which account for 31%. “Millennials are by nature entrepreneurial but not by deed,” says Stengel. “High student loan debt is a factor for this,” she continued. Among the 45 and older group, Stengel says “successful owners don’t usually start their businesses until around mid-30s to 40s.” “By then you have a better network and experiences that you can leverage when starting a business.”
Among the 31% of millennial business owners, African-American women led with 39% of newly created businesses. Native Hawaiian/ Pacific Island women came in second at 21%. The report cites higher barriers to advancement in the traditional workforce as a leading factor. Another factor for millennials seeking entrepreneurship is the lack of finding meaningful work. For Kyshira Moffett, CEO of the KSM Group, that is one of the reasons she started her own brand strategy and consulting business. Working in corporate HR for a few years, Moffett was working full-time during the day and then coming home at night and sacrificing her weekends to build her company.
“Helping people with career coaching and then brand strategy brought me joy and purpose,” she says. Being able to have some flexibility with whom Moffett worked with and making an impact on people’s lives were also factors in starting her own company.
For millennial women starting businesses, Moffett offers these three tips, 1. Spend time researching and analyzing what you want to do, 2. Don’t rush quitting your full-time job, keep your health insurance and paying into that 401K for as long as you can, 3. Branding is important, every market is saturated but you have to figure out what makes you stand out from the rest.
Another surprise is the industries that saw the most growth of women-owned firms since 2007. These industries included utilities, services, construction and accommodations, and food services. Check out the full report here