American women make up 45% of the entrepreneurial landscape in 2020

New report published ahead of this year’s International Women’s Day explores women’s changing role in the American entrepreneurial landscape.

This month, UENI has launched a country-wide study revisiting the state of female entrepreneurship in 2020.

The last 50 years have undoubtedly seen a revolution when it comes to women in business. From Oprah, to Martha Stewart and Melinda Gates, there is no shortage of female entrepreneurs that have made it big. 

This seems incredible in light of the fact that back in 1972, women owned just 4.6% of all US businesses.

By 2018, new reports put the number of women-owned businesses at 40%. Some estimates put the total number of women’s businesses in the US last year at 13 million, suggesting a growth of 21% in the period between 2014-2019.

Given UENI’s dedication to helping small businesses everywhere succeed, we set out to investigate the current role women play in business, and track the specific areas and locations where female entrepreneurship is now active.

The following research is based on a sample size of 39008 American based businesses. 

Women in business: A new force to be reckoned with

From the 39008 businesses surveyed in this study, we found that approximately 17560 are women-owned. 

This finding indicates that in 2020, 45.02% of American businesses are owned by women, a statistic that implies a 5% growth in just three years.

By comparison, 54.98% of US businesses are currently owned by men, signalling a significant drop from 60% in 2018. 

According to this data, the number of women in business is steadily growing, with the gender gap continuing to close. 

A glimpse over the Atlantic 

According to a previous study conducted by UENI published in late January, American women have significantly higher chances of opening a business than their counterparts in Great Britain. 

By comparison, women in this popular European location for starting up own just 32.77% of all businesses.

As such, women in the US are currently 40% more likely than British women to open a business of their own. 

It’s arguable that by many measurements, America’s entrepreneurial landscape has become increasingly more gender equal.  

Insights on sole proprietorship and company size

Next, we looked into company size, analysing how gender intersects with the scale of American businesses.  

Data from a sample of 13461 business owners revealed that women are currently more likely to run a business as sole proprietors than have four or more employees. 

Women notably surpass men when it comes to running sole proprietorship, making up 52.34% of these enterprises. 

However, whilst the number of women in business is rising, female founders are considerably less represented when it comes to bigger companies. 

Crucially, they own 32.59% of businesses with four or more employees.

According to this data, the bigger the company, the less likely it is that a woman is running it. 

What kinds of companies are women running? 

When considering the gender split by industry, a number of patterns for women in business emerge. 

Looking at the figures depicted below, women currently account for the majority of business owners in the Consumable, Hair and Beauty, Gifts and Occasions, as well as Domestic Services sector. 

These categories exhibited the highest levels of female entrepreneurship, with women running over 70% of businesses in these industry sectors.

Next, General Health & Medical and School & Education stand out as two of the sectors with the strongest balance of women and men in leadership positions in 2020. 

Lastly, this study found that women are statistically less likely to own companies in areas such as Construction, Building Maintenance and Car Services, where they make up under 20% of all business owners.  

It’s relevant to note that OECD previously reported that due to women’s work life-balance, their businesses worldwide tend to be ‘smaller scale’ and in a ‘limited range’ of sectors, despite contributing to economic growth.

Theories also posit that the cost of childcare, child-rearing and difficulty reentering the workforce post-pregnancy have contributed to this phenomenon, with past reports claiming that women are prioritising job flexibility over potential for money-making

Considering UENI’s new findings, this trend could continue to hold true in the USA in 2020.

Where are women starting up? 

The final stage of this study focuses on the role of location when it comes to women-owned businesses. 

Overall, this data reflects that in 2020, the percentage of companies owned by men and women respectively can vary starkly depending on both city and state. 

Crossing state lines

A cross-state analysis (including the federal district of Columbia) reveals that several areas in the American Deep South have some of the highest numbers of female entrepreneurs. 

According to our data, business owners in Mississippi, South Carolina and Georgia are over 50% female. 

This is a noticeable difference from states like California, Utah and Wyoming, previously considered some of the best states for launching a business, where levels were just above 40%. 

Finally, the worst-performing states for women in business were notably New York, Rhode Island and Massachusetts. 

Women in the city

According to our research on over 39,000 businesses, Columbia is leading the charge as the US city with the smallest gender gap for entrepreneurs. 

Business owners in Columbia are, on average, 61.94% female. Other cities making the top 20 include Memphis, where 54.97% of businesses surveyed and owned by women, as well as Jacksonville (53.73%) and Richmond (51.45%).

On the other end of the spectrum, Las Vegas, New York and Miami have some of the lowest proportions of women-owned businesses. The number of female entrepreneurs dropped between 36.28%-39.20% in these cities.

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