Over the last nine years, women have been starting new businesses at a much more rapid clip than the previous two decades, according to a survey by American Express.
The 2016 State of Women-Owned Business Report said the number of women-owned businesses have increased by 42% between 2007 and 2016. Women start 1,072 new businesses each day. Those women-owned businesses now employ nearly 9 million and have generated nearly $1.6 trillion in revenue during that same nine-year span.
On top of that, businesses owned by women are outpacing the national average in both job creation and revenue generation postrecession, according to American Express. Full-time employment in businesses owned by women has jumped 18% since 2007 as hiring dropped 1% with all other businesses during the same time.
Susan Sobbott, president of American Express Global Commercial Payments, said it is good to see a rise in “the vital role that women-owned businesses play in our country’s postrecession recovery.”
“We are inspired by these women who are continuing to pursue their entrepreneurial passions and are strengthening our communities and economy even further,” Sobbott said in a statement.
In addition to hiring at a higher pace, businesses owned by women have produced more revenue over the last nine years than other businesses, increasing sales 35% since 2007, compared with 27% among other U.S. firms. The report said women are now the majority owners of 38% of the nation’s businesses, up from 27% in 2007.
In the Upstate, Pam Evette, owner of Travelers Rest-based Quality Business Solutions Inc., has started a business — with a base in human resources, benefits administration and payroll — that has seen nearly $300 million in increased revenue over the last three years, making it a nearly $1 billion company.
The hurdles of getting started
Evette said that, after 20 years of experience in financial management and compliance, it was time for her to start working for herself.
“When I was starting my business, I was so busy starting it, I never really took the time to pick my head up,” Evette said. “But I was raised in a male environment, and I never really thought that being a woman would hold me back from starting a business.”
But, over the years, she said she has heard stories about other women starting businesses and facing challenges. Challenges like being taken seriously as a business. Jennifer Sutton, president and CEO of Greenville-based Bright & Co. Marketers, said there was one particular stigma she faced when she started her company three years ago.
“As I was trying to develop the model and develop the brand of Bright & Co. I was getting the ‘oh, are you just another stay-at-home mom just trying to fill your time?’ and I was like not at all,” Sutton said.
Evette and Sutton had struck out in similar fashion. Both worked for other companies, and both started to think, “Why am I not doing this for myself?” While Sutton said she encountered some resistance when she first started Bright & Co., Evette said she was fortunate that she “really didn’t experience a lot of that, but it is more prominent than you might think.”
Sutton sent out a survey to her contacts before officially starting her business. She wanted to take the temperature of those that would benefit most from her marketing services to see if there even was an interest. She said the results were staggering. Businesses loved her business model but expressed concern and even doubt over the stability of such an enterprise.
But, then one thing changed everyone’s mind.
“It really wasn’t until we bought our building in downtown Greenville and when we put that sign up that people knew we were for real,” Sutton said.
Location, location, location
Studies, like the one done by American Express, suggest the South has experienced the largest growth of businesses owned by women since 2007. Nearly eight of every 10 businesses owned by women were located in Florida, Georgia, Texas, Mississippi, South Carolina, Tennessee and Louisiana. Other prominent locations for businesses owned by women were Michigan, the District of Columbia and South Dakota.
Evette said while the South may have the better numbers as far as women starting businesses, the trend is in a lot of places.
American Express reported the states with the most women-owned businesses were California, Texas, Florida, New York and Georgia, in that order. It is worth noting that, in the report, South Carolina had a 53% increase in businesses owned by women over the nine-year span placing it sixth best in the country, according to the report.
But, there is one drawback to the location, according to the National Partnership for Women and Families. In a recent report from that group, the Palmetto State had a gender wage gap of $8,272 every year. That means, for every dollar earned by a man, only 80 cents is earned by a women for the same job. The group said the wage gap means women in South Carolina lose nearly $5.5 billion every year “which is money that could strengthen the state economy and financial security of South Carolina.”
“This analysis is a sobering reminder of the serious harm the wage gap causes women and families all across the country,” said Debra L. Ness, president of the National Partnership.
Evette said the wage gap could be a reason why more and more women are branching out and starting their own business.
“I worked in public accounting and then in the private sector, but I never really experienced it, or maybe I did and just didn’t see it,” Evette said. “I think, if I would have, I mean why not get out and start on my own?”
But, one factor could be the actual cost of living in the South. Evette said living in an expensive location like New York City would see the impact of a wage gap more apparent. However, because the cost of living in the South is significantly lower, the wage gap may not be as prominent.
Regardless, Evette said this region of the country still has strong roots for women seeking to venture into business for themselves.
“I think the South is a breeding ground for women to succeed and it will continue to be that way,” Evette said.
Reach Matthew Clark at 864-520-9530, ext. 107, or @matthewclark76 on Twitter.