Center Publication

Completing the Picture:

Center for Women’s Business Research

Equally-Owned Firms

in 2002

Underwritten by:

Pitney Bowes Inc.

Wells Fargo

April 2003

Introduction

Center for Women’s Business Research has a longstanding commitment to assessing and documenting the economic impact of women business owners.

Women-owned businesses have consistently been a dynamic and fast growing segment of the economy. In this research brief, the Center presents the most up-to-date and complete data available on women-owned businesses.

In December 2001, Center for Women’s Business Research published 2002 estimates for majority-owned, privately held women-owned firms in the United States. These estimates reflect the definition of women-owned businesses currently used by the U.S. Bureau of the Census – which is narrower than that used in previous Census data collections. More importantly, the current definition excludes many businesses in which women play a major ownership and management role, including many of the largest women-owned and led firms, thus seriously understating the economic impact of women’s entrepreneurship.

Center for Women’s Business Research is committed to “completing the picture” of women’s business ownership by developing and disseminating up-to-date information on these currently-excluded groups. These groups include privately held businesses equally owned by women and men; privately held businesses in which women own controlling or substantial minority interest; and publicly-traded companies with majority or substantial women’s ownership. In order to complete the picture of the economic impact of women business owners, the Center has established the collection and dissemination of information on these groups as a critical priority. This research brief begins to fill the gap by profiling one of these critical segments of the women-owned business community – privately held firms equally owned by women and men.

The Center’s previously-released estimates indicate that in 2002, there were 6.2 million privately held, majority women-owned businesses, employing 9.2 million workers and generating $1.15 trillion in sales. (See Center for Women’s Business Research: Women-Owned Businesses in 2002: Trends in the U.S. and 50 States, December 2001, for more details.) When firms which are 50% owned by women are added to the picture, we find:

• As of 2002, there are an estimated 10.1 million privately held majority or 50% women-owned businesses. These firms represent nearly half (46%) of all privately held firms in the United States.
• Taken together, these firms employ 18.2 million people, and generate $2.32 trillion in sales.
• Approximately one in seven U.S. employees is employed by privately held majority or 50% women-owned firms.
• These businesses are growing and expanding faster than the economy in general. Between 1997 and 2002, the Center estimates that the number of privately held majority or 50% women-owned businesses grew by 11% or more than 1 ½ times the rate of all privately held firms (6%).
• Employment growth, at 18% was about twice the average (8%), and sales growth was also considerably stronger (32% vs. 24%). Nearly Half of All Privately-Held U.S. Firms are Majority or 50% Women-Owned

Equally-Owned Firms: Highlights

• As of 2002, there are an estimated 3.9 million privately held equally owned firms in the United States. These firms represent 18% of all privately held firms.
• Privately held equally-owned firms employ 9.0 million workers and generate over $1.17 trillion in sales.
• Using conservative assumptions, the Center estimates that between 1997 and 2002, the number of privately held equally-owned firms increased by 6%, employment grew by 8%, and sales increased by 24%. (See methodology note for more detail).

In 2002, there are 166,212 privately held equally-owned firms with revenues of at least $1 million and 6,902 with 100 or more employees.

• The largest share of privately held equally-owned firms is in the service sector, with 35% of firms. Retail trade (19%), finance, insurance and real estate (10%), construction (10%) and industries not classified (10%) are the next largest industry segments.
• When we consider the presence of privately held equally owned firms within industry segments, a somewhat different picture emerges. While equally-owned firms comprise 18% of all privately held firms, they are much more prevalent in industries such as retail (26%), mining (25%), wholesale trade (21%), and manufacturing (21%).

Interestingly, while more equally-owned firms are in services than any other industry, within the service industry, equally-owned firms are relatively under-represented, comprising only 15% of the total.

Methodology

National estimates for privately held equally-owned firms and all privately held firms are derived from the Census Bureau’s “1997 Survey of Women-Owned Business Enterprises” (SWOBE). This report includes data on businesses whose owners reported that they were equally male-female owned. (This methodology for identifying equally-owned firms differs from that used by Census prior to 1997. Previous Census analyses used IRS data to identify equally-owned firms, an approach which yielded fewer such firms.) The 2002 national estimates are based on growth rates for 1992-1997 for all privately held firms as reported by Census. Industry level estimates for privately held equally- owned firms and all privately held firms between (1992-1997) are derived using growth rates from unpublished SWOBE data.

This analysis also uses Center for Women’s Business Research’s 2002 estimates of women-owned firms, which were derived using unpublished data from the SWOBE (see Center for Women’s Business Research: Women-Owned Businesses in 2002: Trends in the U.S. and 50 States, December 2001, for more details.)

Center for Women’s Business Research Center for Women’s Business Research is the premiere source of knowledge about women business owners and their enterprises worldwide. The Center’s mission is to unleash the economic potential of women entrepreneurs by conducting research, sharing information and increasing knowledge about this fast growing sector of the economy.

Wells Fargo & Company Wells Fargo & Company is a diversified financial services company with $349 billion in assets, providing banking, insurance, investments, mortgage, and consumer finance from more than 5,600 stores and the Internet (wellsfargo.com) across North America and elsewhere internationally.

Wells Fargo provides capital and financial services to more than one million businesses with annual sales up to $10 million in all 50 states, Puerto Rico, and Canada, and is the #1 lender in total dollar volume to small businesses nationwide. Wells Fargo is among the top four SBA lenders nationally, and a SBA Preferred Lender in 28 states and the District of Columbia, and originated 2,256 SBA loans totaling $469 million for the twelve months ending September 30, 2002. The wellsfargo.com small business site was rated the best online banking site for small business customers by Speer & Associates (http://www.wellsfargo.com/biz).

Pitney Bowes Inc. Pitney Bowes is the world’s leading provider of integrated mail and document management systems, services and solutions. The $4.4 billion company helps organizations of all sizes engineer the flow of communication to reduce costs and increase impact, and enhance customer relationships. The company’s 80-plus years of technological leadership has produced many major innovations in the mailing industry and more than 3,500 active patents with applications in a variety of markets, including printing, shipping, encryption, and financial services. With approximately 33,000 employees worldwide, Pitney Bowes serves more than 2 million businesses through direct and dealer operations. More information on the company is available at www.pb.com.

National Association of Women Business Owners The National Association of Women Business Owners (NAWBO), headquartered in the Washington, DC metropolitan area, is the only dues-based national organization representing the interests of all women entrepreneurs in all types of businesses. The organization currently has over 75 chapters. It is affiliated with Les Femmes Chefs d’Entreprises Mondiales (World Association of Women Entrepreneurs) represented in 35 countries.

Fact Sheet on Women-Owned Businesses

Center for Women’s Business Research has a longstanding commitment to assessing and documenting the economic impact of women business owners. For the past three decades, women-owned businesses have been a dynamic and fast-growing segment of the economy. The following analysis is from Center for Women’s Business Research’s “Completing the Picture” project. This project looks at the total number of privately-held 50% or more women-owned firms in the United States as of 2002.

I. Total Privately-Held 50% or more Women-Owned Businesses The new figures show the number and growth of women-owned businesses when privately-held 50% women-owned businesses are added to previous figures reflecting publicly-held majority women-owned firms.

• Total Number: 10.1 million
• Employment: 18.2 million
• Revenues: $2.32 trillion in sales
• Growth Rates 1997-2002: 11% growth in number of firms, 18% in employment and 32% in sales.

II. Privately-Held Majority Women-Owned Businesses These figures, previously published from Center for Women’s Business Research, 2002 show the number and growth of privately-held majority (51% or more) women-owned businesses.

• Total Number: 6.2 million
• Employment: 9.2 million
• Revenues: $1.15 trillion
• Growth Rates 1997-2002: 14% growth in number of firms, 30% in employment and 40% in sales.

III. Privately-Held 50% Women-Owned Businesses These new figures are specifically for the privately-held 50% women-owned businesses.

• Total Number: 3.9 million
• Employment: 9 million
• Revenues: $1.17 trillion
• Growth Rates 1997-2002 : 6% growth in number of firms, 8% employment and 24% in sales.

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