WBE’s (Women-owned business) and MBE’s (Minority-owned business) established within the past decade are making substantial contributions to the economy and are poised for continued growth in the future. They have reached the same level of business achievement as women-owned firms started in the past, and are more likely to be oriented toward future growth than their predecessors, according to a new analysis from Center for Women’s Business Research (founded as the National Foundation for Women Business Owners).
The new generation of women entrepreneurs appears to be better equipped for success than their predecessors of two decades earlier. Women who started or acquired their firms within the past ten years are more highly educated than women who have owned their firms for 20 or more years, and have higher levels of pre-entrepreneurial management experience. Approximately 45% of women who have become business owners in the past decade have at least a bachelor’s degree, compared to just 26% of those who have been in business for 20 years or more. Thirty-eight percent (38%) of the new generation of women business owners held an executive, senior or middle management position in their pre-entrepreneurial career, compared to just 20% of women who have owned their firms for 20 years or more.
The great news here is that the new generation of women entrepreneurs is more likely to have started a business that is related to their previous career. Over half (51%) of those who started their companies within the past 10 years indicate their business is closely related to their previous career, compared to 33% of those who started their firms 20 or more years ago according to statistics from the Center for Women’s Business Research Vice Chair and Harvard Business School Professor Group. This is positive because we know that the more closely related the business is to the owner’s previous work experience, the greater the likelihood of success.
Thirty-eight percent (38%) of women business owners who have started their firms within the past decade have already achieved at least $500,000 in annual revenues. Furthermore, 42% of the new generation women business owners indicated that they are striving for continued growth over the next five years as they expand their businesses. This compares to 25% of women owners of firms that have been in business two decades or more. In this respect, the new generation female business owners are similar to their male counterparts (49% of new generation men business owners have growth-related future goals.)
Women who founded their businesses in the 2000’s are more like their male cohorts than previous generations of women business owners in several other ways. The new generation of women entrepreneurs appears to be narrowing the business revenue gap, according to the Center for Women’s Business Research.
Women-owned businesses established in the last decade are making significant economic contributions, at the same overall level as their predecessors. This study found that one-quarter (24%) of women-owned firms started less than 10 years ago now have at least 20 employees. That compares with 23% of firms aged 10 to 19 years, and 29% of firms aged 20 years or older. Similarly, 38% of these new generation businesses have revenues of $500,000 or more, compared to 39% of firms started 10 to 19 years ago, and 34% of those in business for 20 or more years. While this analysis cannot directly compare businesses at a similar period in their growth cycle, the fact that the new generation of women business owners has reached this sales level at an early stage in their business development – along with their outlook on growth and their appetite for capital – may indicate that the new generation of women-owned firms is poised to make an even greater economic contribution in coming years.
Many women entrepreneurs in the new generation are actively seeking capital for their businesses (41% of women who started their businesses in the past 10 years compared to 25% of women with businesses 20 or more years old have sought capital during the past year), and are more likely to be concerned about access to capital than their more established counterparts.
Among those who have started or acquired their firms within the past decade, 43% of the women used less than $10,000, compared with 29% of the men. This shows a tremendous amount of hope on the horizon for future women business owners.
Article written by Cathy Holloway Hill
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