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National Business Women's Week Is Here — Let's Celebrate!

A heartbreaking number of businesses, 200,000 more than usual,1 shut their doors during the first year of the pandemic.

But a surprising number of new ones launched in their stead.

For many of them, women were at the helm. And there's no better time to celebrate these businesses — and their founders — than National Business Women's Week, which runs from October 18 to October 22.

 

The State of Female-Owned Businesses

In the U.S., the share of female-owned businesses has risen astronomically over the past several decades — from 4.6% in 1972 to 42% in 2019.2 Between 2014 and 2019 alone, the number of women-owned businesses jumped 21%2 — more than double the rate of growth (9%) of businesses overall.

And, though the pandemic slowed much of the economy, it didn't seem to slow the growth of female entrepreneurship. In some cases, it even prompted women into finally taking the leap and becoming their own boss.

In 2020, more than 4 million3 new business applications were filed — an increase of nearly 25% over 2019. Data from LinkedIn4 suggests that the number of female founders, in particular, grew 5% year-over-year during the period of March 2020 through November 2020. That's more than twice the pre-pandemic average.

Furthermore, a global report from Mastercard5 found that the "female entrepreneurial activity rate" in the U.S. — which it defines as the percent of working age women who are about to start a business or have established one in the past 3.5 years — rose from 10.7% in 2018 to 16.6% in 2020.

That group of new business owners counts a sizable number of minority women, too. Minorities were behind 47% of last year's new women-owned businesses, according to a survey from Gusto6 and the National Association of Women Business Owners.

 

Why Women Are Launching Businesses

Though the rise in female businesses is exciting, the reasons behind it aren't always as positive. One huge factor driving women to start businesses during the pandemic: because they had to.

Since February 2020, the National Women's Law Center7 reports that women have lost a net total of 3 million jobs. Even today, the female unemployment rate remains more than 1.5 times as high (4.8% vs. 3.1%) as it was before the pandemic.

The numbers are even more striking for women of color. Among Black and Latina women ages 20 and over, 7.9% and 6.0% were unemployed in August, respectively. If that percentage included Black and Latina women who left the workforce entirely, those rates would rise to 10.1% and 9.3%.

This data gives new context to Gusto's report, which notes that minority women were twice as likely (35% vs. 17%) “to start a new business because of financial imperative." Almost one-third of these women (29%) also said they are their family's sole breadwinner.

In addition to financial necessity, many women started businesses out of a desire for greater flexibility. “More control over their work schedule" was the No. 1 motivator for women in Gusto's survey, capturing nearly six in 10 responses (58%).

This is undoubtedly tied to the fact that women took on more responsibilities at home during the pandemic. One study conducted by LeanIn and McKinsey,8 for instance, found that “mothers are more than three times as likely as fathers to be responsible for most of the housework and caregiving."

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Out of all the women-owned businesses launched over the past year, how many were started by minorities? 47%.

The Power of Working Women

Though these statistics underscore how far we have to go in terms of equality, it's worth taking a look back to see how far we've come, as well.

In 1950, only 34% of women9 worked outside the home; by 2019, that number had risen to 57%.10 Over the decades, these working women have changed the world for themselves — and for those around them.

Take credit cards, for example: As recently as the 1970s,11 many banks required women to have a male cosigner, such as their husband or father, in order to obtain a credit card.

Compare that to the 2020s, when 75% of women under 4512 say they manage their money on their own, and more than 4 in 10 mothers13 are the sole or primary breadwinners in their families.

The bottom line: Today's women are a financial force. Whether they're caring for their children, launching businesses, making important monetary decisions — or, in some cases, all three! — it's time for governments, financial institutions, and everyday citizens to recognize their power.

And it's time for us all to commit to lifting women up, however we can. There's no telling what we'll achieve if we do.

Important disclosure information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. Ruth Simon, "Covid-19's Toll on U.S. Business? 200,000 Extra Closures in Pandemic's First Year," The Wall Street Journal. Published April 16, 2021, accessed October 7, 2021. Back
  2. Andrew Soergel, "Georgia and Nevada Are Tops for Women-Owned Business Growth," U. S. News & World Report. Published September 24, 2019, accessed October 7, 2021. Back
  3. Jimmy O'Donnell, Daniel Newman, and Kenan Fikri, "The Startup Surge? Unpacking 2020 Trends in Business Formation," Economic Innovation Group. Published February 8, 2021, accessed October 7, 2021. Back
  4. Eileen Zimmerman, "Female Entrepreneurs Seek a New Path During the Pandemic," The Washington Post. Published January 21, 2021, accessed October 7, 2021. Back
  5. Mastercard, "The Mastercard Index of Women Entrepreneurs 2020," accessed August 20, 2021. Back
  6. Luke Pardue, "Who Started Businesses During the Pandemic? A Survey of Women Starting Businesses During COVID," Gusto. Published March 17, 2021, accessed October 7, 2021. Back
  7. Jasmine Tucker, "At August's Rate, It Will Take Women 9 Years to Regain The Jobs They Lost In the Pandemic," The National Women's Law Center. Published September 1, 2021, accessed October 7, 2021. Back
  8. LeanIn and McKinsey, "Women in the Workplace 2020," accessed August 20, 2021. Back
  9. Institute for Women's Policy Research, "Women's Labor Force Participation," accessed October 4, 2021. Back
  10. U. S. Bureau of Labor Statistics, "Women in the labor force: a databook," published April 2021, accessed October 7, 2021. Back
  11. Cecilia Nowell, "What We Can Learn From Feminist Federal Credit Unions," The Nation. Published July 23, 2020, accessed October 7, 2021. Back
  12. Alicia Adamczyk, "Younger women are twice as likely to make their families' financial decisions as in previous generations," CNBC. Published August 26, 2020, accessed October 7, 2021. Back
  13. Sarah Jane Glynn, "Breadwinning Mothers Are Critical to Families' Economic Security," Center for American Progress. Published March 29, 2021, accessed October 7, 2021. Back