Research Summary

Women are Seizing Entrepreneurial Opportunities Propelled by Public and Private Sector Programs

Center for Women’s Business Research  ·  June 24, 2003

The growth of women’s entrepreneurship is one of the defining economic and social trends in the U.S. over the past decade. “Women continue to be motivated to start a business by the desire for independence (56%) and the attraction of an entrepreneurial idea (46%),” said Myra M. Hart, co-chair of the Entrepreneurship Program, Harvard Business School and Chair, Center for Women’s Business Research. “For many (42%), business ownership is the realization of a lifelong dream while 23% said they left job situations in which they were limited by a ‘glass ceiling’.”

Women business owners mirror the overall trend of women moving into business leadership. Over the past twenty years, the number of women in professional and managerial positions has more than doubled to almost 21 million in 2002. The trend of women moving into entrepreneurship is equally strong. The forces and factors contributing to this pace of growth in women’s entrepreneurship include a higher level of education of today’s women, more extensive work experience, and greater access to capital, markets and networks.

The newer women business owners – those who started their businesses within the past ten years – are more likely than those who came before them to bring managerial or professional experience to business ownership (65% compared to44%) and to have at least a bachelor’s degree (45% compared to 26%).

“Year after year, women business owners consistently prove themselves to be a significant force driving overall small business growth,” said Rebecca Macieira-Kaufmann, Wells Fargo executive vice president of Business Banking. “One of the major results of this report is to help illuminate the factors inspiring that success. Wells Fargo remains committed to help all women entrepreneurs achieve their business dreams and succeed financially.”

While access to capital remains a challenge for many women business owners, women today have greater access to capital than ever before. As women advanced into entrepreneurship in unprecedented numbers, both the private and public sectors responded with expanded loan programs specifically targeted towards women business owners. Women are moving into the equity markets and, as of 2002, 40% of women-owned businesses with equity investments received these investments from corporate investors or venture capital firms.

Also contributing to the growth of women-owned firms has been the expansion of programs offering coaching, technical expertise and networking. Today there are more than 80 women’s business development centers as well as numerous other local programs that cover the entire range of business life cycle from start up through growth and sell-out. As women business owners have gained economic clout, access to markets has been a key focus. Both the federal government and large corporations have implemented goals and programs to include these fast growing businesses in purchasing. Women’s share of the business in both sectors, while still small, is growing.

High-growth women-owned businesses show some significant differences from those that are not fast-growing. “High growth companies are characterized by greater access to capital and greater use of technology in conducting business,” said Macieira-Kaufmann. “The companies experiencing fast growth are more likely to have a line of credit (52% compared to 37%), use a business credit card (56% compared to 40%) and have a greater number of sources of capital (4.2 sources compared to 3.4 sources). They also are more likely to have a web site (47% compared to 29%) and more likely to consider the Internet and e-commerce to be an important part of their business growth strategy (45% compared to 30%).”

“Women are transforming the economy – as well as their own lives – by establishing and expanding businesses at a tremendous pace. This trend shows no sign of abating,” concluded Hart. “It is vital that in all sectors – public, private and non-profit – we continue to provide the knowledge and programs that have demonstrated their importance in unleashing the economic power and business potential of all women.”

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, Center for Women’s Business Research has “painted the picture” of the women-owned business landscape by providing original research documenting the economic and social contributions of women-owned firms. This knowledge transforms entrepreneurial opportunities for women worldwide and is changing the face of the global business environment.

Wells Fargo & Company Wells Fargo & Company is a diversified financial services company with $370 billion in assets, providing banking, insurance, wealth management and estate planning, investments, mortgage and consumer finance from 5,800 stores and the Internet (www.wellsfargo.com) across North America and elsewhere internationally.

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. 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. Speer & Associates rated the Wellsfargo.com small business site the best online banking site for small business customers in 2002 (wellsfargo.com/biz). 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 $17 billion to women and minority business owners.

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