Women-owned business: tough competition
The State of Oregon ranks in the bottom 10 for growth of women-owned businesses.
That's according to the seventh annual State of Women-Owned Businesses Report, commissioned by American Express, which found that Oregon has an estimated 128,100 women-owned businesses, employing 115,400 and generated $17.5 billion in 2017.
The comprehensive report released Nov. 8 analyzes data from the U.S. Census Bureau Survey of business owners and factors in relative changes in gross domestic product (GDP).
Nationally, the number of women-owned firms increased by 114 percent from 1997 to 2017, compared to just a 44 percent increase among all businesses. Therefore, during the past 20 years, the number of women-owned firms has grown at a rate of 2.5 times faster than the national average.
Reported by industry, revenue and employment size at the national, state and top 50 metro levels, the analysis uncovers a new and nuanced investigation
into growth trends over the past 20 years among the 11.6 million women-owned enterprises that employ nearly 9 million people and generate more than $1.7 trillion in revenues.
The Business Tribune spoke with Geri Stengel, the SheEO of Activato, longtime entrepreneur and is a mentor at Women Entrepreneurs in New York (WE NYC), who also attends programs including training, networking and conferences.
"I took over the tracking of the survey, but I've been part of the women's entrepreneurship circuit since the 1990s," Stengel said. "It's something I've been actively researching for 20 years."
Oregon is ranked 40th in growth of number of women-owned firms over the past 20 years with a 59 percent increase, 26th in growth of jobs created with a 26.3 percent increase and 42nd in growth of firm revenues with a 69.3 percent increase.
Portland is ranked 41st in growth of number of women-owned firms among the top 50 U.S. metropolitan areas with a 49.6 percent increase over the past 15 years, 24th in growth of jobs created with a 33.1 percent increase and 28th in growth of firm revenues with a 62.7 percent increase.
Overall, Oregon's ratings here are low compared to the rest of the nation.
"You are — and I'm not quite sure why — your overall employment vitality is 23rd in Oregon, and I took a look at Portland — very similar in its ratings as well," Stengel said.
Oregon's economic clout
The number of women-owned business in Oregon has grown 59 percent over the last 20 years, compared to the U.S. average of 114 percent, ranking Oregon at #40 in terms of overall growth rate.
"I pulled those numbers and Oregon and Portland don't fare that well: it's sort of mid- to bottom of the list," Stengel said.
Employment is at 115,000, and that growth rate in Oregon is 26 percent compared to the U.S. average of 27 percent.
"Portland does a little better on number of employees," Stengel said. Oregon ranks number 26.
Oregon's women-owned businesses generated $17 billion this year. Over the past two decades those firms have grown by 69 percent, compared to the U.S. average of 103 percent, ranking Oregon #42.
Together, the above three categories are labeled economic clout. Oregon's combined economic clout rating is #38.
"It's that ranking of growth rate, number of firms, gross number of employment and revenue generated," Stengel said. "Then we came up with another term called employment vitality that looks at employment growth and average business size, and here Oregon does a little better — Oregon is far above average in terms of its size."
Oregon has 0.9 employees per woman-owned business, compared to the national average of 0.77, ranking Oregon at #23.
"States like North Dakota did well in terms of employment vitality and economic clout," Stengel said. "The coasts may be surging in numbers of women becoming entrepreneurs, but when there's a surge it actually brings down the numbers in terms of employment size and revenue."
States like California and Texas have the largest populations and the largest numbers of women-owned businesses, but in terms of economic clout, rural states are actually higher: the top five places that increased their economic clout from 1997-2017 are Nevada, the District of Columbia, South Dakota, North Dakota and Georgia. The five states with the highest employment vitality are North Dakota, Minnesota, Maine, Alaska and Virginia.
"Actually, that's the most interesting: it's the middle that does better, it's rural that does better," Stengel said. I was not aware of it until I started digging into the numbers this year."
The good news is that they are growing in terms of the number of firms, but a large part of that growth has been because of necessity entrepreneurship," Stengel told the Business Tribune. "During the Recession, women and especially women of color were not able to find employment, and they turned to entrepreneurship whether it was to be the only job they had, or to supplement the existing job they had."
Over the past two decades, women of color have turned to entrepreneurship at an astounding rate. While the number of women-owned businesses grew 114 percent from 1997 to 2017, firms owned by women of color grew at more than four times that rate (467 percent). The 5.4 million businesses owned by minority women make up almost half of all women-owned firms (46 percent). These businesses employ more than 2 million workers and generate $361 billion in annual revenue.
"Women of color, yes their businesses are growing really astronomically, and whereas overall growth in the number of women starting these businesses is slowing, it's not slowing for women of color," Stengel said. "I think there's frustration with the corporate world and women of
color are exiting to start their own businesses as a result of it, or to supplement what they're making in the corporate world."
While the number of women-owned firms has doubled in the past 20 years, the number of firms owned by women of color has grown by 467 percent. According to the study, in 2017 there are an estimated 2.2 million African American women-owned firms, 2 million Latina-owned businesses, 1 million Asian American women-owned companies, 161,500 Native American/Alaskan Native women-owned enterprises and 34,200 Native Hawaiian/Pacific Islander women-owned firms. Since it's based on census data, those are the only included categories.
"Yes, coming out of the Recession the growth rate for women-owned businesses was much, much higher, but again it was primarily driven by women of color and that overall number has not followed for women of color: Black women have the next-highest rate, followed by Hispanic women," Stengel said.
The report estimates that if revenues generated by minority, women-owned firms matched those currently generated by other women-owned businesses, they would add $1.1 trillion in revenues and 3.8 million new jobs to the U.S. economy.
"Two decades ago, a game plan was laid out for what would help women entrepreneurs improve, and training is probably the most important," Stengel said. "Other research shows that 3.9 jobs are created after a micro-business goes through training."
That study was from Aspen Institute, using the software microTracker, which empowers microenterprises and small business development organizations to assess, compare and improve effectiveness and communicate the value of their work to funders and stakeholders.
"Other initiatives both at national, state and local levels help grow businesses: so, if you have large companies and government agencies as your clients, you are more likely to be a large business than a tiny business," Stengel said. "So, whether it's a city program or state program or even a federal program — American Express is supportive of certification programs at federal levels — and the last which is equally important, access to capital."
Stengel is based in New York City, and has a background as the president of Stengel Solutions (a current position), was a board member of Praxis Housing Initiatives and was an adjunct professor at The New School for four years teaching entrepreneurship and social enterprise.
"There are a ton of resources in New York City, so there are different resources that might be available for an urbanite versus somebody in rural America," Stengel said. "If you were in a rural area, you would be relying more on SBA (small business association) resources."
There are also women's business centers. New York has one now, which didn't exist when Stengel visited an SBA when she started her business. Oregon's only SBA Women's Business Center is operated by the Mercy Corps Northwest.
"At that point in time New York would not have very active programming aimed at women-owned businesses," Stengel said. "They now are probably the most aggressive in their support for women entrepreneurs."
Her firm is certified as women-owned with New York City, and the City is actually a client of hers.
"They were actually a client even before I was certified, but then I realized I could grow my business even more if I became certified," Stengel said. She became certified one year ago, and will also be going for a WBENC certification.
Founded in 1997, the nonprofit Women's Business Enterprise National Council (WBENC) is the largest third-party certifier of businesses owned, controlled and operated by women in the U.S.
"My clients tend to be corporations, government agencies, foundations and that certification can be very important," Stengel said. "It's not that it gets me the business, it's that the door is opened at these procurement fairs. I get to meet people who'll make the introduction to potential clients."
Another good resource is Alice, a personalized business advisor tool at helloalice.com, that searches for loans, grants and alternative funding and partners with the U.S. Small Business Association.
But all these conferences, organizations and networking events do exist in these industries already, and all over the nation and globe. So why can't women entrepreneurs just waltz into those and start taking names and business cards? Why start from scratch in building up these networks, support, events and organizations?
"Women need a safe space, and right now is a perfect example of why women need a safe space," Stengel said. "There is sexual harassment."
"You need a place where you can talk about it and figure out what the solution is moving forward," Stengel said. "I'm
not saying you should always only work with women — you need male allies, you need male clients — but when you hit a
certain type of ceiling in a certain way,
it's very comforting to be able to let your hair down with a group of people who
have been there, and experienced first-
hand the same frustration you have, and have figured out strategies for moving forward."
By Jules Rogers
Reporter, The Business Tribune
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