Women Fueling Post-Recession Business Startup Activity

By John Lovett Times Record, Fort Smith, Ark.

WWR Article Summary (tl;dr) According to the sixth annual State of Women-Owned Businesses Report by Womanable and American Express OPEN, the total number of businesses in the U.S. increased by 9 percent from 2007-2016, while female business ownership increased 45 percent. "Entrepreneurship is the next frontier for many women," said Julie Weeks, American Express Research director and author of the study. "They want to administer their own fate. It's not a political statement, they just want to pursue their vision."

Times Record, Fort Smith, Ark.

Statistics show that U.S. businesses owned by women grew at a rate five times the overall national average of business growth since 2007, fueling much of the post-recession business startup activity.

According to the sixth annual State of Women-Owned Businesses Report by Womanable and American Express OPEN, the total number of businesses in the U.S. increased by 9 percent from 2007-2016 while the number of women-owned firms increased 45 percent.

"Entrepreneurship is the next frontier for many women," said Julie Weeks, American Express Research director and author of the study. "They want to administer their own fate. It's not a political statement, they just want to pursue their vision."

Weeks said a generation of women's business support networks, along with more education and managerial work experiences, have helped women feed the spirit of a long-standing movement for professional female empowerment.

There are now 11.3 million women-owned businesses in the U.S., employing 9 million people and generating $1.6 trillion, according to the report.

Economics also play a factor. Out of necessity, families often need a second income, Weeks added. The days of only the man going out to work and the women staying at home to tend the family are long gone. Some women who may have the option of staying home also simply may be "bored," Weeks said, and want to put their ideas, skills and education to work.

Michelle Cernak, owner of Westark Plumbing in Fort Smith, is among many local business owners who have made it through the Great Recession and come out on the other side smiling. She bought the firm in 2007 from a master plumber, just before the crash, because she "saw a need for better management" in the industry. The plumbers might be great at what they do, she said, but they needed help with customer service.

"It needed a woman's touch," Cernak said. "I saw something where the technical side was being done well, but the management and the business side was not."

The advantage of being a woman in a traditionally male dominated industry, she added, is being able to see the "big picture" and pay attention to the details in contracts. Many males are simply eager to put their grittiness to work and get the job done, she said. Cernak and her office team keep their hands clean and everything working in good order.

Cernak's team includes Chelsi Johnson, office coordinator; Robyn Barker, dispatcher and "back-up O.C."; Ginny Reeves, bookkeeper in Prescott, Ariz.; and Bryan Cernak, service manager. There are 15 employees with Westark Plumbing.

"I'm lucky to work with people who show respect no matter the gender," Cernak wrote in a text. "Although I do appreciate a hard-working man, my theory is the support for a team is measured by the success of the team."

Westark Plumbing's leader also said she had strong female role models who ran businesses in her hometown of Phoenix.

"It was nice having women mentors, and I think that female mentors are increasingly giving girls the strength to create and maintain greatness," Cernak added.

Arkansas ranks low Arkansas is ranked 46th among the 50 states and District of Columbia for "growth in number and economic clout" of women-owned firms from 2007-16. Although Arkansas is just under the national average of growth in women-owned firms and comes in with a decent ranking at 14th place, the state was dead last in the nation for revenue growth and employment growth, according to the report.

Arkansas was one of just five other states that saw a minus sign in the women-owned firms' "employment growth" box.

Employment among women-owned businesses in Arkansas fell from 62,129 in 2007 to 55,800 in 2016. Sales are just above 2007 numbers at $9.9 million. They were $9.75 million in 2007.

The other negative "employment growth" states for women-owned businesses were Illinois, Mississippi, Nebraska and New Hampshire.

Although the seven Arkansas Small Business and Technical Development Centers (ASBTDC) have programs to help women start businesses, including one next week in Russellville, there is only one Women's Business Center in the state. It is located at El Dorado and funded in part by the Small Businesses Administration and a matching grant from Winrock International.

Michael Singlton at the ASBTDC said the agency is "committed to serving the needs of Arkansas entrepreneurs from all constituencies." The Russellville office at Arkansas Tech University will host the next Women in Business Conference. They hosted another one previously in Jonesboro.

"We have several success stories about women-owned small businesses on our blog," Singleton added. A few examples, he said, are Real Life Apparel, Superior Bathhouse Brewery & Distillery in Hot Springs and Myrtle Event Center in Magnolia.

Across the nation, there have been 1,072 net new women-owned businesses launched each and every day, the American Express and Womanable study adds. These businesses now comprise 38 percent of the business population, employ 8 percent of the country's private sector workforce and contribute 4 percent of the nation's business revenues. The share of women-owned firms was 28 percent in 2002.

While the share of women-owned firms keeps climbing, the report adds, their share of employment and revenues remains "essentially unchanged." Since the Great Recession, the industries with the greatest share of new women-owned firms have been in some of the most historically traditional sectors for women, the study states.

Hair and nail salons, administrative support, landscaping and food services were mentioned as those sectors that saw the largest increases.

In terms of economic clout, the top 10 fastest growing states for women-owned business owners since 2007 are North Dakota, South Dakota, Texas (all tied for first), Iowa, Indiana and Wyoming (ties for fifth), Georgia and Tennessee (tied for seventh), Utah and Maine.

Oklahoma was ranked in 20th place overall for combined economic clout among women-owned businesses. The Sooner State saw growth in women-owned firms of 32.5 percent, which was under the national average of 45 percent. But it had 42.5 percent growth in revenues (ranked 14) and 14.9 percent growth in employment (ranked 26.)

Government goal met In early March, Maria Contreras-Sweet, administrator for the U.S. Small Business Administration, announced the federal government reached its goal of government contracts to women-owned businesses for the first time in fiscal year 2015. There was 5.05 percent, or $17.8 billion, of all federal small business eligible contracting dollars awarded to women-owned small businesses.

"Meeting this goal means 5 percent is no longer our ceiling but our foundation upon which to build," Contreras-Sweet said at the time.

When it comes to receiving contracts and capital, women are still "under-represented," the SBA leader added. The SBA also has added 36 new industry categories where women can now compete for set-aside contracts and sole-source awards, Contreras-Sweet stated. This "dramatically expands" contracting opportunities for women-owned businesses and "paves the way for new jobs and industries to be created."

Related News

Leave a Reply

Your email address will not be published. Required fields are marked *