The 2018 Megaphone of Main Street: Women’s Entrepreneurship Report from SCORE reveals women in different demographics start businesses for a variety of reasons.
When it comes to millennial women, the report says 27.8% of them do so because they see an opportunity. An almost identical number of baby boomers, 28.2% said they started a business out of necessity. For 25.8% of Generation Xers, family consideration was the biggest reason for starting a business.
The report from SCORE highlights the great diversity which exists in the small business community and the entrepreneurs who thrive across different types of industries. And with women representing 39% of all small businesses, understanding how this group performs and identifying their needs makes it possible to increase the number of women who go into business for themselves.
The data for the report was collected from SCORE’s ninth annual Client Engagement Survey issued by PricewaterhouseCoopers. Women entrepreneurs ages 18 to 65+ from diverse ethnicities, geographic areas and industries were asked about the challenges and successes they face in running a small business.
This was an online survey given out to 280,956 SCORE clients from Oct. 30 to Dec. 1, 2017. A total of 25,117 clients responded to the survey, with female entrepreneurs making up 12,091 and male entrepreneurs 8,416 of the respondents.
The geographic representation of the respondents comes from all 50 states plus Washington D.C.
The research questions centered around how women-owned businesses compare with their male counterparts when it comes to success. Do they face more obstacles when it comes to financing, does mentoring have an impact on the success of the business and does it look different to female then to male entrepreneurs?
More Women Owned Business Statistics
Women are more likely to launch business professional services (29.4%), healthcare and assistance services (14.1%), retail selling trade businesses (12.5%), educational services (8.9%), and hospitality, travel, restaurant and food services (8.2%).
As to the success of their businesses, women are just as likely to be successful as men. About an equal number of women and men are struggling in their businesses, 34% and 33% respectively, which is almost the same. An equal number of women and men owned businesses are maintaining current size (32%) moderately expanding in size or revenue (29% ad 28% respectively) or aggressively expanding (5% and 7% respectively.)
When it comes to financing, 31% of women sought financing in the past year compared to 38% of men. But overall male and female entrepreneurs looked for financing to start or grow their businesses.
The impact of mentoring has the same influence on business owners regardless of gender. Getting a mentor for five or more hours improves the success of a business and increases the likelihood of a business opening and staying open.
However, even if entrepreneurs get half the number of hours of mentoring, SCORE says 41% of these businesses report an expansion in size or revenue, but it goes up to 47% for five or more hours.
Conclusion
The SCORE report concludes by stating small businesses owned by women are a fast-growing force in the US economy. It goes on to say this research has dispelled previous data which showed women-owned businesses are still at a disadvantage in terms of performance, contribution and growth.
The report says woman-owned businesses are just as successful compared to male-owned businesses across all independent measures.
This includes equal levels of business success and anticipated revenue growth, slightly higher levels of business startups and slightly lower levels of employee hiring and business longevity — with the exception of very established businesses of 20 years or older.
Even though the data from the report is hopeful, challenges still remain to close the gap with their male counterparts in financing, revenue and hiring practices.
You can look at four different infographics with additional data points from SCORE below.
Photo via Shutterstock
This article, “Opportunity Drives Nearly 28% of Millennial Women to Start a Business, Report Says” was first published on Small Business Trends