Number of Women-Owned Businesses Expected To Reach 6.2 Million in 2002
Sales to surpass $1 trillion, growth rates continue to exceed national averages
Sales to surpass $1 trillion, growth rates continue to exceed national averages
Washington — December 4, 2001
The number of women-owned businesses continues to grow at twice the rate of all U.S. firms, and those businesses show significantly greater increases in employment and revenues, according to a new report from the Center for Women's Business Research (founded as the National Foundation for Women business Owners), which was underwritten by Wells Fargo. Between 1997 and 2002, the Center estimates that the number of majority-owned, privately-held women-owned firms will have grown by 14%, compared to 7% for all U.S. firms, and will stand at 6.2 million in 2002.
Sales generated by women-owned firms increased by 40% nationwide during the period, nearing $1.15 trillion. These firms will employ nearly 9.2 million workers in 2002, up 30% from 1997, which reflects a growth rate that is one-and one-half times the national average.
Sponsored by Wells Fargo, the Center's two most recent reports, "Women-Owned Businesses in 2002: Trends in the U.S. and 50 States" and "Women-Owned Businesses in 2002: Trends in the Top 50 Metropolitan Areas," analyze both published and unpublished data provided by the U.S. Bureau of the Census and present the most up-to-date information currently available on majority-owned, privately-held women-owned businesses in the United States.
"Women entrepreneurs are active in the business marketplace throughout the country," said Colleen Anderson, Executive Vice President of California Business Banking and spokesperson for the Women's Loan Program for Wells Fargo, "demonstrated by the fact that some of the fastest growing states are smaller and lack a major metropolitan area."
"The fact that sales and employment are increasing at more than twice the rate of overall growth in the number of women-owned firms reveals the growing economic impact of women-owned firms," said Nina McLemore, Chair of Center for Women's Business Research and President of Regent Capital. "The number of women who own larger businesses has reached substantial levels. And at present growth rates, there will be 112,700 women-owned firms with revenues of $1 million or more, and almost 8,500 with 100 or more employees, in 2002."
Women-owned firms in the top 50 metropolitan areas in the U.S. number nearly 3.2 million, employ more than 4.9 million people and generate more than $661 billion in sales. More than half of the number of firms, employment and sales of women-owned firms in the U.S. are located in the top 50 metropolitan areas.
"The analysis shows that the rate of growth in the number of women-owned firms exceeds the overall rate in all 50 states," added Anderson. "The share of women-owned firms is particularly strong in the West and Northwest. The Sacramento-San Francisco-Oakland corridor in California is among the top 10 metropolitan areas in the country with the greatest share of women-owned firms, ranging from an impressive 32.5% in Oakland to 30.8% in Sacramento and San Francisco. Portland, Oregon leads this category with almost 35% of all firms being women-owned and the Seattle, Washington area has 32.5%."
The ten fastest growing states based on 1997 to 2002 growth in the number of firms, employment and sales are: 1) Idaho and Wyoming; 3) Utah; 4) Nevada; 5) Arizona; 6) South Dakota; 7) New Mexico; 8) Montana and Oregon; and 10) Alaska.
The fastest growing metropolitan areas during the same period are: 1) Salt-Lake City-Ogden, UT; 2) Las Vegas, NV-AZ; 3) Phoenix-Mesa, AZ; 4) Kansas City, MO-KS and St. Louis, MO-IL; 6) Portland-Vancouver, OR-WA; 7) Nashville, TN; and 8) Austin-San Marcos, Dallas, Fort Worth-Arlington, Houston, and San Antonio, TX (all tied).
The top ten ranked states based on an average of number of firms, employment, and sales are: 1) California; 2) Texas; 3) Florida, Illinois, and New York; 6) Ohio; 7) Michigan and Pennsylvania; 9) North Carolina; and 10) New Jersey. The ten largest metropolitan areas for women-owned firms, based on the same average ranking of number, sales and employment, are: 1) Los Angeles-Long Beach, CA; 2) Chicago, IL; 3) New York, NY; 4) Washington, DC-MD-VA-WV; 5) Houston, TX; 6) Detroit, MI; 7) Philadelphia, PA-NJ; 8) Dallas, TX; 9) Atlanta, GA; and 10) Orange County, CA.
The new analysis also shows that women are continuing to diversify into non-traditional industries. The greatest growth in the number of women-owned firms is seen in construction (36%); agricultural services (27%); transportation, communications and public utilities (24%) and finance, insurance and real estate (14%). Sales for women-owned firms in agricultural services increased by more than 100%, while sales in construction increased by 94%. Employment in these two industries increased by 74.8% and 69.9%, respectively.
The largest share of women-owned firms remains in the service sector (53% or 3.3 million), which include business services, engineering services, and professionals such as lawyers, doctors and accountants.
The 2002 estimates are derived from growth rates specially provided by the U.S. Bureau of the Census. The Census Bureau changed its definition of a woman-owned business to a more restrictive and "procurement-focused" definition, not including businesses in which a woman owns 50%, or publicly traded women-owned firms. Due to this change, the "1997 Survey of Women-Owned Business Enterprises" does not count those firms, which were included in the past.
"This illustrates even more strikingly the impact of women-owned firms," explained McLemore. "Although the Census Bureau narrowed the definition of ownership and eliminated perhaps one of the biggest categories of women-owned businesses (where women own 50%), the numbers still showed major growth.
"Because the Census Bureau is now counting only privately-held, majority-owned firms, the data was not directly comparable to data previously gathered. We do, however, want to thank the Census Bureau for providing special tabulations so that we could conduct this analysis and publish these reports. Corporations, funding institutions, policy makers, the media and women entrepreneurs have come to rely on this data from the Center and we appreciate that the Census Bureau understands the importance of providing up-to-date, relevant information in its proper historical context."
Editor's Note: When referring to the reports, they should be called "Women-Owned Businesses in 2002: Trends in the U.S. and the 50 States" and "Women-Owned Businesses in 2002: Trends in the Top 50 Metropolitan Areas," published by Center for Women's Business Research (founded as the National Foundation for Women Business Owners).
The two reports, " Women-Owned Businesses in 2002: Trends in the U.S. and 50 States" and "Women-Owned Businesses in 2002: Trends in the Top 50 Metropolitan Areas," are available for $130 each. Individual state and MSA reports are available free of charge on the Center's Web site. For further information, contact: Center for Women's Business Research, 1411 K Street, NW, Suite 1350, Washington, DC 20005-3407, phone 202-638-3060, fax 202-638-3064, e-mail firstname.lastname@example.org. (Discounts are available for Center corporate partners and NAWBO members.)
Center for Women's Business Research, founded as the National Foundation for Women Business Owners, is the premier source of knowledge about women business owners and their enterprises worldwide. The Center provides original, groundbreaking research to document the economic and social contributions of women-owned firms. To maximize the benefits of this knowledge, the Center has a comprehensive strategy to disseminate its research through the media, publications, seminars and consulting. Corporations, government policy makers, educators, organizations, the media, and individuals rely on the Center's leading-edge knowledge to strengthen their support of women business owners.
Wells Fargo & Company, a member of Center for Women's Business Research's Corporate Advisory Council and Corporate Circle, is a $298 billion diversified financial services company providing banking, insurance, investments, mortgage and consumer finance through about 5,400 banking stores, the Internet and other distribution channels across North America, including all 50 states, and elsewhere internationally. Wells Fargo Bank leads the industry in improving access to capital for women business owners and offers a full range of financial services. Through its Women's Loan Program - the first of its kind -- Wells Fargo Bank has loaned nearly $9 billion to women-owned businesses nationwide. To help entrepreneurs build and grow their businesses, Wells offers an online resource center at www.wellsfargo.com/biz . The site provides Internet banking and bill payment, and links small businesses with products and services.
Methodology Note: The 2002 estimates are derived by using growth rates specially provided by the U.S. Bureau of the Census. Due to changes in the way the Census Bureau defined a woman-owned business, the "1997 Survey of Women-Owned Business Enterprises" does not count some firms that were included in the past - those in which a woman owns 50% of the business and publicly traded women-owned firms. Since the agency is now counting only privately-held, majority-owned firms, the data was not directly comparable to data gathered previously. Thus, the Census Bureau reconfigured the 1992 data based on the 1997 definition, and provided growth rates during that span of time for women-owned firms and all firms (including sole proprietorships, partnerships, and subchapter S corporations).
Center for Women's Business Research projects these trends forward into 2002, using the following general assumptions: 1) the growth rates between 1992 and 1997 would continue at similar rates through 2002 (growth rates in the number of firms, employment, and sales are projected linearly); 2) the growth rates in the number, employment and sales of C corporations would equal the growth rates of other firms; 3) the growth rates in the number, employment and sales of publicly-traded firms would equal those of other firms; 4) the growth rates at the metropolitan level would equal the growth rates at the state level; 5) the growth rates of MSAs within multiple states would equal the growth rates of the state with the majority of the population; 6) the growth rates for the Washington, DC metropolitan area are an average of the growth in DC, MD, and VA; 7) the proportion of publicly owned firms at the MSA level would equal the proportion at the state level.
There were some instances in which the Census Bureau could not report a 1992-1997 growth rate, since the confidence interval for the rate included 0 and could have been slightly positive or slightly negative. In these cases, as noted, the assumption was made that the growth rate was 0. Comparisons between women-owned and all firms are made to all privately-owned firms, except in the instances noted.