How Women-Owned Businesses Boost Local Economies
Women-owned businesses, for example, play an integral role in the growth of local economies. Simply in terms of money, women-led businesses generate 10% more revenue over five years than businesses owned by men. Unfortunately, there are still more male entrepreneurs than there are women.
Though the gender gap is slowly closing, consumers, the government, and other organizations need to continue supporting women and women-owned businesses to further improve the economy. The more we support young girls and women, the faster we can close the gender gap and see more women-led businesses doing good for local communities and economies. Already, female entrepreneurs are on the rise, and we must continue to support this forward momentum to ensure a brighter and better future for everyone.
The Rise of Women-Owned Businesses The number of women-led businesses has been slowly increasing over the past several years, but the numbers have particularly spiked since 2018. In 2018, only 19.9% of businesses were women-owned , but now, women-owned businesses account for more than 40% of all businesses in the United States.
While there are likely numerous factors that have played a part in this recent growth, conscious consumers have been a key component. Consumers today are more mindful of their purchases and the brands they support.
The majority of today’s consumers prefer to support brands with good values and ethics, and women-owned businesses tend to fall in this category more often than not. With this continued support for women-owned businesses, the gender gap between female and male entrepreneurs is at an all-time low. Though there is still a ways to go, it’s clear that female entrepreneurs are on the rise, with 3 out of 10 American entrepreneurs being women-and these numbers will only continue to grow.
Overall, women-led businesses are primarily classified within the professional, scientific, and technical sectors. According to research conducted by Washington State University, 26% are wholesale and retail brands, 21% make up health, education, government, and social services, 18% are in administrative services, and 9% are in manufacturing. This is likely because compared to male entrepreneurs, more women are interested in running businesses that make a difference in the world.
Why is It Essential to Support Women and Women-Owned Businesses?
Not just in the U.S. but globally, women suffer more than men from a lack of economic opportunity as a result of inadequate education, pressure to marry early, disparities in health care, sexual violence, and an overall higher rate of discrimination. Thus, individuals, governments, and organizations must find ways to support and empower girls and women to help them improve their lives and become entrepreneurs. Simply by closing the gender gap in education, you can improve a country’s economic output. Additionally, when women work, they are more likely to invest their income back into their families by 90%, compared to only 35% for men.
Furthermore, recent studies have shown that women are more likely to help their teams and boost productivity levels at work by taking on more emotional labor than men. While taking on too much emotional labor can take a toll on women as it has historically in the past with positions women held in communities, it is overall an essential skill to have. People who are capable of taking on emotional labor tend to be better helpers, which is essential for positions in healthcare, education, social work, customer service, and law enforcement. As leaders and entrepreneurs, women are 60% more likely to provide emotional support for their teams , 26% more likely to help employees navigate work/life challenges, and 24% more likely to ensure their employees have manageable workloads.
How Women-Owned Businesses Are Benefiting the Economy
From an economic viewpoint, women-owned businesses are incredibly beneficial. Overall, there are nearly 13 million women-owned businesses just in the U.S., generating around $1.9 trillion in revenue annually and employing over 9 million people. And in addition to those numbers, numerous other ways of supporting women and women-owned businesses can benefit local communities and economies.
1. Because women are more likely to invest their money back into their families, investing in women and women-owned businesses can help fight poverty.
2. Supporting women-owned businesses and investing in better education for women helps keep young girls in school and increases their potential to one day run their own business and make a difference.
3. Investing in women and supporting female entrepreneurs can help improve access to sexual reproductive health, which overall can reduce unintended pregnancies, newborn deaths, and unsafe abortions.
4. Women-owned businesses tend to have happier, more productive employees, which improves the success of more businesses, further benefitting the economy.
5. Women-owned businesses tend to be more diverse, which creates more equal employment opportunities and helps them expand their reach and outperform less diverse businesses.
6. Women-owned agricultural businesses can provide more food security and reduce poverty and hunger.
7. Supporting women and women-led businesses can help combat gender-based violence by helping to reduce disparities and discrimination.
How to Support Women-Led Businesses
Despite recent growth in women-led businesses, it is still essential to continue supporting women to further decrease the gender gap and remove roadblocks that keep women from succeeding and starting their own businesses. Those who work in marketing are particularly essential because marketing is an incredibly powerful tool that can influence markets and consumers. Word-of-mouth marketing , for example, and advertising across social media platforms can help women-owned businesses expand their reach and can influence consumers to support more women-led businesses.
Investors can also help by hiring more women to diversify their boardrooms, putting more capital towards women support networks, and overall being more supportive of women in the workforce and listening to their ideas and their pitches. Other businesses and organizations can help by partnering with women-owned businesses and showing their support for small, female-led businesses to help them grow. Individuals can also do their part by buying more of their products and services from women-owned businesses and spreading mention of these businesses by word-of-mouth and talking about them on their social media pages.
Final Thoughts Based on so many studies and statistics, it is clear that women-owned businesses are an essential part of the economy, and we must continue to support them and help them grow to further improve local communities across the globe. All businesses are vital, but women-led companies and female entrepreneurs are especially important as they help close the gender gap and build more equal, conscientious, and prosperous economies. Article written by Noah Rue Photo by Emmy E from Pexels