Jul. 16—Small businesses are a major engine of growth in the U.S. economy, and women are playing an increasingly large role in the country's entrepreneurial ecosystem.
According to recent data from the U.S. Census Bureau, women-owned firms now represent more than one in five businesses with employees in the U.S., a figure that has trended upward in recent years. These enterprises report over $1.8 trillion in annual revenue and employ nearly 11 million workers.
While women-owned businesses are becoming a more significant part of the economy, the Census Bureau's data also shows that women's experiences of entrepreneurship frequently look different than men's. Notably, the industries that women tend to start businesses in are different from the most common industries for men. In particular, fields like health care and social assistance or accommodation and food service tend to have higher proportions of women-owned businesses. And in part due to these differences in industry, women-owned firms tend to pay less per employee (-30.1%) than the national average.
However, these differences also extend to women's reasons for getting into business in the first place. Women are more likely than men to report that flexible hours or balancing work and family obligations were very important when deciding to start a business. Meanwhile, men are more likely to say that the possibility of earning greater income or wanting to be their own boss motivated their decision to start a business.
It is most common for both female and male business owners to still be with their first business, but more female business owners (55%) are involved with their first business than their male counterparts (47.5%). In contrast, men are more likely to have moved on from a previous business in some form. Men more frequently respond that they still operate a previous business, that their business was sold to another company or individual, or that a previous business is no longer in operation.
Women-owned businesses are also distributed unevenly across the U.S. Hawaii stands out as having the highest share of women-owned businesses at 24.5%, with Virginia (23.9%) and Colorado (23.8%) not far behind. At the other end of the spectrum, many of the states with the lowest share of female-owned businesses are found in the central U.S., including South Dakota (13.6%), North Dakota (14.2%) and Iowa (15.9%). At the metro level, many of the top states are well-represented, with locations like Honolulu, Denver and the Washington, D.C. metro having especially high concentrations of female enterprises.