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Why Are Women-Owned Businesses’ Sales Slumping?

November 3rd, 2010 ::

For years, we have heard how women are starting more small businesses than men are. But a recent report from the U.S. Women’s Chamber of Commerce has some not-so-positive news: Although the number of women-owned businesses is growing in number, those businesses’ sales are actually declining.

Women’s Businesses Struggle for Market Share looked at data from the Census Bureau’s 2007 Survey of Business Owners. The report shows that, while the number of women-owned businesses increased 44 percent between 1997 and 2007, those companies’ share of total business revenue shrunk from 4.4 percent to 3.95 percent.

Why aren’t the companies growing? (Note that the data used were pre-recession, so that’s not a factor.) According to the report, continuing lack of access to capital and difficulties claiming their share of government contracts are key reasons for the dwindling sales. In addition, the report noted, competition from big business is pushing many women-owned firms out of private-sector contracting.

“The media hype about the growth of women’s businesses continues to emphasize the number of women-owned firms, rather than our grossly stunted financial success,” Chamber CEO Margot Dorfman said. “This report highlights the growth challenges women business owners face and the opportunity loss our country experiences as we fail to support women as entrepreneurs and business leaders.”

The recent release of the official Women Owned Small Business (WOSB) rule, which I’ve blogged about previously on Grow Smart Business, should help address some of the contracting issues. But with the country’s 7.8 million women-owned businesses accounting for almost 29 percent of all businesses in the U.S., it’s crucially important their sales rise so they can create new jobs and opportunities. As the report warns, “If women-owned firms do not achieve strong revenue growth, women’s financial condition may continue to falter impacting families, communities, the vitality and competitiveness of our marketplace, and society as a whole.”

Image by Flickr user Kevin Dooley (Creative Commons)

The views expressed here are the author's alone and not those of Network Solutions or its partners.

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Posted in Business Development | 3 Comments »

This entry was posted on Wednesday, November 3rd, 2010 at 10:30 am and is filed under Business Development. You can follow any responses to this entry through the RSS 2.0 feed.

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  • C.

    As a small business owner (female) I believe MANY small business owner are suffering from the exact same issue. The value of their homes is “in the toilet” so to speak, and with the home value used as equity toward any loan, they can not qualify for a loan even though they are in good standing with all debt payments and have healthy credit scores. The housing market took away our credit worthiness even though we as home owners and business owners did nothing to devalue ourselves to the banks. The devaluing was done TO US. The market devalued their homes equity and in turn the business owners ability to break free of this stagnate market. TAX CREDITS are of very little help to my business. How about a “new” way to funnel cash directly to small business in form of loans without insane interest rates with better qualifying regulations by the banks, or better yet grants so we can afford to both hire help and continue to build our business and in turn the economy? Mr. Obama are you listening?

  • C.

    As a small business owner (female) I believe MANY small business owner are suffering from the exact same issue. The value of their homes is “in the toilet” so to speak, and with the home value used as equity toward any loan, they can not qualify for a loan even though they are in good standing with all debt payments and have healthy credit scores. The housing market took away our credit worthiness even though we as home owners and business owners did nothing to devalue ourselves to the banks. The devaluing was done TO US. The market devalued their homes equity and in turn the business owners ability to break free of this stagnate market. TAX CREDITS are of very little help to my business. How about a “new” way to funnel cash directly to small business in form of loans without insane interest rates with better qualifying regulations by the banks, or better yet grants so we can afford to both hire help and continue to build our business and in turn the economy? Mr. Obama are you listening?

  • gore24

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