Women in the U.S. were starting an average of 1,821 new businesses a day over the past year.
Heading into the 2018 midterm elections, we’ve heard a lot of talk that this is the “Year of the Woman,” referring to a greater number of women seeking political office.
But there is another reason this could be the Year of the Women: the number of women starting their own businesses in the U.S. is rapidly growing.
A report issued last week by American Express on the state of women-owned businesses found that women in the U.S. were starting an average of 1,821 new businesses a day over the past year.
That’s up from an average of 1,118 in the full period from the beginning of the last recession in 2007 through 2018.
The study showed women in the Jacksonville area started nine new businesses every day for the past year, up from six in the 2007-18 period.
“This new data demonstrates not only the remarkable impact women entrepreneurs have on our economy when it comes to creating jobs and generating revenue, but also the growing role of women-owned businesses in our communities,” said Julie Tomich, senior vice president for American Express Global Commercial Services, in a news release.
The report said “a combination of necessity entrepreneurship and opportunity entrepreneurship” is driving the recent growth in women-owned businesses.
Necessity entrepreneurs start their businesses because they can’t find the job they want and creating a business is their best option.
Opportunity entrepreneurs obviously see a market opportunity.
The study, based on census data and American Express estimates, found the total number of women-owned businesses in Jacksonville has grown from 32,392 in 2007 to an estimated 57,000 this year, a 76 percent growth rate.
The number grew by 6.3 percent this year.
That’s higher than the national growth rate for women-owned firms of 57.6 percent from 2007 through 2018 and 5.7 percent in the past year.
Florida had the highest growth rate of any state from 2007 through 2018 at 87.8 percent, but growth in the state has fallen below the national average at 4.8 percent in the past year.
Although the number of firms is rising significantly, sales have been slower to recover from the recession.
Total sales at women-owned businesses in the Jacksonville area of $5.38 billion this year are only 4.6 percent higher than the total sales – with fewer businesses – in 2007. However, sales have grown 5.7 percent in the past year.
Most of the women-owned businesses in Jacksonville, and nationally, are sole proprietor enterprises with no other employees, and the owner is not counted as an employee. So, the number of employees at women-owned businesses is lower than the total number of businesses.
But the number of employees of women-owned businesses in Jacksonville is growing, rising 23.6 percent from 2007 through 2018 and 5.4 percent in the past year.
The national data on women-owned businesses showed other interesting trends, including a big increase in businesses started by minorities.
“Higher unemployment rates, long-term unemployment and a much greater gender and racial pay gap led women of color to start businesses at a higher rate out of necessity and the need to survive, rather than a desire to seize a market opportunity,” the American Express report said.
The number of businesses started by women of color jumped by 163 percent from 2007 through 2018.
The study also found two-thirds of women business owners are age 45 or older.
“Common perception suggests entrepreneurs start their companies in their 20s. The reality is that successful entrepreneurs generally start their businesses later, once they have accumulated business experience, connections, and financial capital,” the report said.