Black/African American women-owned businesses and Hispanic/Latino women-owned businesses have made significant strides
Women-owned businesses continue to build a track record of ambition, performance, and perseverance as seen in the 2024 Wells Fargo Impact of Women-Owned Business Report prepared in partnership with Ventureneer, CoreWoman, and Women Impacting Public Policy (WIPP). The study showed the astounding pace of growth of women-owned businesses compared to those owned by men.
Between 2019 and 2023 women-owned businesses grew at nearly double the rate of those owned by men. This growth gap was further exceeded from 2022 to 2023, reaching 4.5 times.
Most notable was the difference between how the pandemic impacted women business owners versus men. While the number of men-owned businesses declined, women launched more businesses than they closed. This difference continues with women-owned businesses growing their workforces and increasing their revenue while men’s numbers shrank during the same period of the pandemic.
Approximately 500,000 women-owned businesses, earning revenues ranging from $250,000 to $999,999, demonstrated remarkable ambition and resilience by collectively increasing their revenues by around 30%. This growth underscores their determination and preparedness to surpass the $1 million revenue threshold.
“The impact that women-owned businesses make on the economy is undeniable. Even more impressive is that growth in women entrepreneurship – whether it was their workforce or revenue – grew during an extremely difficult time,” said Wells Fargo Women’s Segment Lead for Small Business, Val Jones.
Minority Women Business Owners are Leading the Charts
While the pandemic stressed many underserved communities, the pandemic and the post-pandemic transition overall was a boost to Black/African American and Hispanic/Latino women-owned businesses. Both increased at a much higher rate than all women-owned businesses.
In the four years between 2019 and 2023, Black/African American women-owned businesses saw average revenues increase by 32.7% and Hispanic/Latino women-owned businesses by 17.1% versus all women-owned businesses’ which saw a 12.1% rise.
Key factors impacting Overall Growth
In addition to the growing contribution of minority-owned businesses to the economy, four other factors led to the ongoing acceleration of growth in women-run businesses:
- Women received significant support during the pandemic, notably through programs like the Paycheck Protection Program (PPP), where banks and community development financial institutions (CDFIs) played a key role in providing crucial assistance.
- Women were very much compelled to launch start-up businesses due to necessity.
- Women-owned businesses diversified into more industries. While previously over half concentrated in professional services, administrative and support services, healthcare, and personal care, inroads were seen in finance, insurance, and real estate sectors.
- The gender gap in business ownership is narrowing, with women-owned businesses constituting almost 40% of U.S. businesses but contributing only 5.8% to total national firm revenue in 2023. This disparity is attributed to women-owned businesses being more prevalent in lower-revenue industries and women often engaging in part-time or necessity entrepreneurship.
Women-owned businesses could make a greater impact
While women business owners represent 39.1% of U.S. firms, they only account for 9.2% of the workforce and 5.8% of revenue. When the revenue gap is closed by ethnicity or race, women have the potential to generate $667 billion in additional revenue for the economy. Similarly, when the gap is closed for women versus men-owned businesses, the additional revenue potential dramatically increases to $7.9 trillion.
“To sustain the growth and close the gaps, it’s important that we continue to create opportunities that help these businesses flourish, including removing barriers to capital, providing technical assistance, and offering support with business certification,” said Wells Fargo Women’s Segment Lead for Commercial Banking, Judith Goldkrand.
To learn more, visit 2024 Wells Fargo Impact of Women-Owned Business Report
