Press Release
Biennial Update on Women-Owned Businesses Documents Substantial Economic Impact
Washington, DC – The Center for Women’s Business Research released its biennial update on the state of women’s entrepreneurship today showing that women own a 50% or greater stake in nearly half of all privately-held businesses in the United States and that these businesses spend more than half a trillion dollars on payroll and benefits. Wells Fargo continues its long-standing exclusive underwriting of this biennial report. The report documents the increasingly vital contribution of women-owned firms to the economy by delineating the growth in number, revenues and employment as well as providing, for the first time, estimates of these firm’s business-related expenditures.
Most Comprehensive Report in Twelve Years
As of 2004, there are an estimated 10.6 million privately-held firms in the U.S. that are 50% or more women-owned, accounting for nearly half (48%) of all privately-held firms. These firms generate $2.46 trillion in sales and employ 19.1 million people nationwide.
“We estimate that women-owned firms (50% or greater ownership share) are growing at close to twice the rate of all privately-held firms, 17% vs. 9%. These businesses are a critical component of the economy, not only in terms of their influence, but also in terms of their economic impact,” said Myra M. Hart, Chair, Center for Women’s Business Research and Professor, Harvard Business School. “Employers of millions, the women who lead these firms spend an estimated $546 billion annually on payroll and benefits.”
Health benefits comprise the largest share of benefit expenditures, with 2004 spending estimated at $38 billion. Estimated spending on retirement benefits ($14 billion), life insurance ($1 billion), and disability insurance ($1 billion) comprises $16 billion, for a total of $54 billion in benefit expenditures. Payroll expenditures are estimated at $492 billion per year.
Women entrepreneurs also are major consumers of business products and services. The Center analyzed annual spending in the four areas for which there is publicly available data, and estimated that women-owned firms spend a total of $103 billion annually on the following categories: information technology ($38 billion); telecommunications ($25 billion); human resource services ($23 billion); and shipping ($17 billion).
Moreover, privately-held firms 50% or more women-owned are not only growing in number, but in size. Between 1997 and 2004, estimated employment in these firms grew at twice the rate (24% vs. 12%) of all privately-held firms and estimated revenues of 50% or more women-owned firms increased at 39% compared to 34% for all privately-held firms.
“Women-owned firms are growing and increasing their employment faster than the general market,” said Joy Ott, Regional President for Wells Fargo in Montana and National Spokesperson for Wells Fargo’s Women’s Business Services program. “These firms are driving growth in the American workplace, while generating revenues at a similar rate to all firms. This is a powerful statement about this fast-growing segment of American small business owners.”
Nearly a quarter (23%) of privately-held firms in which women hold at least a 50% share have employees other than the owner. This is very similar to the 25% of all U.S. firms that have employees. Over the past seven years, the number of women-owned firms with employees has grown an estimated 28%, three times the rate of growth for all firms.
Women-owned businesses are expanding into all industries. Nearly half (45%) of these privately-held, women-owned firms are in the service sector; 16% in retail; 9% in finance, insurance or real estate; and 6% in construction. The fastest growth is in the industries considered non-traditional for women. Between 1997 and 2004, the Center estimates the number of women-owned firms in construction businesses grew 30%; transportation, communications, and public utilities grew 28%; and agricultural services grew 24%.
“Women-Owned Businesses in 2004: Trends in the U.S. and 50 States” is the most comprehensive report on the state of women’s entrepreneurship since the Center began releasing this data twelve years ago. The report provides the profile of all privately-held firms which are 50% or more women-owned as well as segment breakouts of the 50-50 women-owned firms and the majority (51% or more) women-owned firms.
“This segmentation is important,” said Myra M. Hart. “The number of 50% or more women-owned firms is a major step in capturing the full impact of women on business ownership.
However, it is also vital to have the profile of firms in which women are the majority owners (51% or more). The Center is committed to providing the most comprehensive data available on the state of women’s entrepreneurship.”
In 2004, almost two-thirds (63%) of all women-owned businesses are majority women-owned firms (51% or more) for a total of 6.7 million. These firms account for 30% of all privately-held U.S. firms. Majority ownership by a woman or women is necessary for third-party certification which is used by corporations and governments to determine eligibility for their supplier diversity initiatives. The Center estimates that majority women-owned firms employ 9.8 million people nationwide and generate $1.19 trillion in sales. Between 1997 and 2004 they grew at nearly two and a half times the rate of all U.S. privately-held firms (23% vs. 9%).
The Center will be releasing 2004 data on women-owned businesses located in the major metropolitan areas in September of this year.
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Center for Women’s Business Research Center for Women’s Business Research is the premier 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.
Since 1989, the Center has generated research-based intelligence that has helped public- and private-sector leaders, advocates, and individual women business owners make informed strategic decisions for generating greater business opportunities.
About Wells Fargo Wells Fargo & Company is a diversified financial services company with $388 billion in assets, providing banking, insurance, investments, mortgage and consumer finance from more than 5,900 stores, the internet (www.wellsfargo.com), and other distribution channels across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only “Aaa”- rated bank in the United States.
Providing financial products and services to more than one million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada, Wells Fargo is the #1 lender to small businesses in the United States in total dollar volume according to 2001 CRA data.
The second largest SBA lender in dollars and third largest in loans, Wells Fargo is an SBA Preferred Lender in 28 states, and originated 3,181 loans for $473 million in 2003. Speer & Associates rated Wells Fargo’s online services #1 for small business and for consumers (2003). Its targeted business services programs provide outreach and education to women, African American, Latino, and Asian business owners about financial services. Since 1995, Wells Fargo has loaned more than $18 billion to women and minority business owners.
Citation
Center for Women’s Business Research. “Biennial Update on Women-Owned Businesses Documents Substantial Economic Impact.” Press Release. April 28, 2004. Washington, DC.