By Kevin McKenzie
The Commercial Appeal, Memphis, Tenn.
WWR Article Summary (tl;dr) A new study points out Memphis had the highest growth in female-owned businesses among the nation’s 25 largest cities from 2007 to 2012. The Center for an Urban Future, a New York City think tank, points to a 116 percent increase in the number of female-owned businesses in Memphis as the fastest growth from 2007 to 2012. Women Entrepreneurship on the rise!!!!!!!!
Neely Draughon started Off The Square Catering in Midtown in 2008. Formerly an accountant in Nashville, Draughon decided to go to pastry school and open her own business.
Today the successful catering company serves a variety of pastries and entrees ranging from shrimp and grits to tomato tomato basil soup to wedding cakes.
The decision to switch careers and start a business was unconventional but it worked, Draughon, chef and owner said.
“You should not just jump into a business and fly by the seat of your pants with no business plan, but that’s pretty much how I did it,” Draughon said. “So I made every mistake and figured it out but then you learn from your mistakes and keep going.”
She’s not alone. Memphis had the highest growth in female-owned businesses among the nation’s 25 largest cities from 2007 to 2012, a new study points out.
The Center for an Urban Future, a New York City think tank, points to a 116 percent increase in the number of female-owned businesses in Memphis as the fastest growth from 2007 to 2012.
The ranking is in a report titled “Breaking Through: Harnessing the Economic Potential of Women Entrepreneurs.”
Fort Worth was second, with 78 percent, followed by Atlanta with 65 percent, Houston with 62 percent, Dallas with 58 percent, Detroit with 54 percent, Indianapolis with 52 percent, Austin with 51 percent, Jacksonville and Charlotte with 50 percent, and New York with 36 percent.
The statistics from the Census Survey of Business Owners found 35,710 female-owned firms in the city of Memphis, more than double the 16,556 found in the city in a 2007 survey.
The surveys also found that:
* The number of black-owned firms in Memphis grew 100 percent. African American-owned firms grew to 39,864 in 2012 from 19,895 in 2007.
* The number of white-owned firms in the city saw a 5 percent decline, with 26,285 in 2012 and 27,695 in 2007.
* Hispanic-owned businesses rose to 1,933 in 2012 from 909 in 2007, a 113 percent increase.
* There were 1,933 Asian-owned firms in the city in 2012, a 23 percent increase from 1,574 in 2007.
Publicly held firms and those not classified by race, gender or other categories were not included in the counts. In 2012, there were 2,045 of those firms in Memphis. They generated $92 billion in sales, or more than 70 percent of the total for all firms, and employed about 60 percent of workers at firms with employees.
A number of factors are likely to have fueled the high growth of women-owned, as well as minority-owned firms, said Rory Thomas, executive director of the Tennessee Small Business Development Center at Southwest Tennessee Community College.
Thomas estimated that about 60 percent of about 900 clients served in an average year by the center are women.
“Quite a few clients we’ve picked up have been professional women who may have hit a ceiling or found a niche and want to start a business on their own,” Thomas said.
Some may want to grasp opportunities in government contracting for women and others may be stay-at-home mothers or looking for additional income for their families.
Layoffs during the Great Recession drove professional people to become consultants and other workers to become entrepreneurs in industries that don’t require a large investment, such as landscaping or janitorial services.
“If they lost their position and jobs were even harder to find to replace income, a lot of them started a business,” Thomas said.
Ninety-five percent of the female-owned businesses and 98 percent of the black-owned firms had no paid employees in 2012.
About 73 percent of white-owned firms have no employees.
Thomas said the statistics aren’t accounting for one-person firms that hire or contract with another firm, creating work without creating an employee.
Moving single-employee firms to become multi-employee firms “is probably the number one thing those of us in economic development talk about,” said Leslie Smith, president of EPIcenter, a Greater Memphis Chamber Chairman’s Circle initiative to create 500 companies and 1,000 entrepreneurs by 2024.
Historically, one-person firms have been viewed as counterproductive or less valuable to the economy, but increasing numbers of millennials are participating that way, Smith said.
The New York think tank’s report does not provide details, but Smith said understanding the age of the women business owners rising in Memphis will be telling data.
Ages will help reveal whether the female business owners are mature entrepreneurs, starting an encore in retirement, or whether the growth is heavily influenced by the millennial movement to be self-employed and “sort of driving their own economic opportunities,” Smith said.
Lured to Memphis from Detroit, which ranked No. 6 with a 54 percent increase in women-owned businesses, Smith said both cities have an extraordinarily high number. She said she’s not surprised by the trend, with conditions including the Great Recession, employment and employability issues and the fact that folks are creating their own jobs through consulting or other means.
She and Thomas said that resources to start and grow small businesses, including those owned by women, are gaining ground in Memphis. They range from a women’s business accelerator offered by the National Association of Women Business Owners-Memphis to training, counseling and micro-lending.
“I definitely think the environment has really improved,” Thomas said. “Now you have a lot more collaboration between agencies as well.”
For Draughon being her own boss has given her flexibility with her schedule, she said. In 2014 she gave birth prematurely to twins, and four days later one of them passed away.
“It’s been one of those years where it was kind of good that I owned my own business because if I couldn’t work, at least everyone understood and my people came around me and they filled in and took care of everything,” she said.
A downfall of running her own business was no maternity leave, she said. The same week she gave birth, Draughon was back in the kitchen to prepare a wedding cake. Now Draughon often brings her 19-month-old daughter Elizabeth to work with her. “I’m a single mom…,” Draughon said, “so trying to do this is very hard but if you own your own business, especially something like this, I can set my own hours.”
Other snapshots of female-owned businesses in Memphis offered by the Census surveys included: Total sales for the firms grew to more than $3.5 billion in 2012 from less than $2.1 billion in 2007.
* Most female-owned firms in the city did not have paid employees. In 2012, about 4.5 percent, or 1,632, had paid employees. That was down from about 8 percent in 2007, when 1,385 had paid workers.
* The number of female-owned firms in Memphis in 2012 surpassed the number owned by men. The latest survey found 30,568 male-owned firms, a 12 percent increase from 27,286 in 2007.
* Total sales by male-owned firms were far larger, nearly $31.5 billion in 2012 and about $22.6 billion in 2007.
* In 2012, about 20 percent of male-owned firms, 6,268 of them, had paid employees. That was a dip from more than 23 percent in 2007, when 6,439 firms owned by men had paid workers.
* The survey supplies a third gender-based category for firms equally female- and male-owned. It counted 2,567 of those in 2012, a 55 percent drop from 5,822 in 2007.
The New York think tank’s study, supported by Capital One’s Future Edge initiative, advocated for more support for women entrepreneurs in that city.
“Fueled by advances in technology, lowered barriers to entry and recession-era layoffs, women throughout the city — from stay-at-home moms to fashion designers and finance pros — are starting and growing new businesses at a remarkable clip,” it said.