Research Summary

Home-Based Women-Owned Businesses Number and Employ Millions

Center for Women’s Business Research  ·  November 16, 1995

“Women continue to be leaders in capitalizing on non-traditional ways of doing business,” says Susan Peterson, Chair of the National Foundation for Women Business Owners and President of Washington, DC-based Susan Peterson Productions. “Home-based women business owners are a significant economic force, contributing both employment and revenue to the nation’s growth.”

Other key findings of “The Characteristics and Contributions of Home-Based Women-Owned Businesses in the U.S.” include:

Nearly two-thirds (63%) of home-based women-owned businesses employ people in addition to the owner. Full-time employment, including the owner, numbers 5.6 million people. Part-time or contract income is provided for an additional 8.4 million people.

Demographically, home-based women business owners are very similar to non home-based women business owners. They are no more likely to have children at home, which contradicts the supposition that women base careers from home to balance the needs of work and a young family. While their education level is somewhat higher, their age distribution and racial composition is the same as non home-based women business owners.

What differentiates home-based businesses from non home-based businesses are not the personal characteristics of the owner, but the characteristics of the business. Home-based businesses owned by women are much more likely to be newer, smaller firms or in the field of business services.

Basing a business at home is not just a temporary decision for start-up ventures however. The average age of a home-based woman-owned business is 6.1 years.

The top concerns of women business owners are the same regardless of their business location. Key issues include maintaining business profitability, managing and maintaining business growth, managing cash flow, and keeping up with technology.

“The rapid acceleration of information technology has opened doors for new businesses. It has helped change the way America conducts business today--by offering more choices. Many women entrepreneurs have taken advantage of these choices and created home-based businesses, which have proven to be more practical, effective, and convenient for their lifestyle,” says Dick Falcone, AT&T Vice President of Sales for the Small Business Markets.

In fact, home-based women-owned businesses are just as technologically savvy as other businesses with over half (56%) having at least one computer and nearly 4 in 10 (39%) owning more than one. Two-thirds (66%) have a computer fax/modem, 55% use a cellular phone, 30% have CD/ROM capability, and 32% use an on-line information service.

Jim Rollero, MetLife Small Business Center’s Vice President of Marketing notes, “Women are expanding their role in the economy on all fronts. And wherever their business is based, they have the same needs for both business and personal financial planning, including retirement plans, life insurance, disability income insurance, and life insurance plans to protect their businesses.”

Home-based women-owned businesses were just as likely as those located elsewhere to use business earnings to finance their business’ growth. However, they are more likely to use private sources and credit cards and far less likely to use a business loan, to lease equipment, or to use vendor credit. Only 12% of home-based women-owned businesses used a commercial loan during 1994, compared to 40% of non home-based women-owned firms.

The National Foundation for Women Business Owners (NFWBO) is a non-profit research and leadership development foundation affiliated with the National Association of Women Business Owners. NFWBO supports the growth of women business owners and their organizations through the gathering and sharing of knowledge.

This report is the fifth in a six-part series of Research Monographs prepared by NFWBO with support from AT&T and the MetLife Small Business Center. Other titles in this series include: “Going Global: Women-Owned Businesses in the International Marketplace”; “The Use of Computer Technology in Women-Owned Businesses”; “Credibility, Creativity and Independence: The Greatest Challenges and Biggest Rewards of Business Ownership Among Women”; “Employee Benefits Offered by Women-Owned Businesses: A Framework for Compassion”. Individual reports are available for $40.00 and a subscription to the entire series is available for $190.00.

Note: This report utilized data gathered from the 1994 membership survey of the National Association of Women Business Owners (NAWBO), conducted in the winter of 1994/95. The survey garnered 1,435 responses from a questionnaire mailed to nearly 5,000 members of NAWBO. The sampling error for a survey of N=1,435 is 2.4% at the 95% confidence level. Additional data cited is from the Bureau of the Census’ 1987 Characteristics of Business Owners survey, released in 1992.

Charts

Home-Based Women Business Owners Personally Similar to Other Women Business Owners

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