Women’s Business Often Flourishes Women-Owned Firms Succeed Despite Obstacles, Study Shows
Contrary to the image of women-owned businesses as small and struggling, a study released Tuesday shows that they are not only flourishing, but are more likely to succeed than the average American company.
Altogether, according to the study, conducted by the National Foundation for Women Business Owners, women employ about a third more workers in the United States than the Fortune 500 companies do worldwide - 15.5 million compared to 11.4 million.
The foundation found 7.7 million women-owned businesses in America, which generate nearly $1.4 trillion in sales.
Owners of businesses of all sizes reported to the foundation that they faced extra obstacles.
On her way to becoming number 23 of the top 100 women business owners in America, Kavelle Bajaj says she found it hard to be taken seriously.
“I can’t tell you how many times I beat my head against the wall dealing with banks,” said Bajaj, who owns a suburban Maryland computer networking company that grosses nearly a quarter billion dollars yearly. “To this day, people think my husband must REALLY be running things.”
Among the more surprising statistics, said David T. Kresge, senior vice president at Dun & Bradstreet Information Services, which helped develop the study, was the stability of women-owned businesses.
The study analyzed millions of Census Bureau, Small Business Administration and Internal Revenue Service records from 1991 to 1994. During that time, Kresge said, women-owned firms were more likely to have remained in business than the average U.S. firm.
According to statistics, 72.2 percent of women-owned businesses open in 1991 are still operating, he said, compared to 66.6 percent of all businesses nationwide.
Women-owned businesses “have shown above-average staying power and solid performance in financial credibility and stability,” Kresge said. He said women-owned firms have better credit risk ratings than the average firm and are as financially sound and as likely to pay bills on time.
While women mirror national statistics by owning mostly retail and service-related companies, the study found surprising areas of growth for them.
Women-owned construction companies, while still a relatively small percentage of the total market, grew by 19 percent, compared to an 8 percent decrease in such companies nationwide from 1991 to 1994. On the other hand, women-owned finance, insurance and real estate companies grew by 21 percent, versus a 14 percent growth rate overall.
Such statistics can help women business owners clear one of their biggest hurdles: gaining access to credit.
“Women are three times more likely to use credit cards to secure short-term loans, or to report discrimination by banks,” said Laura Henderson, head of the foundation and president and chief executive officer of a Washington-area health communications firm. In a recent foundation survey, she said, a third of women business owners said they had had problems with banks.
In fact, when Henderson moved her business, with assets of $5 million, from Washington to suburban Maryland, she was told by a local banker.
“We’re not interested in doing business with a company like yours.”
“I’m happy to report that after a few years, when that same banker came to my company to solicit business, I told him we weren’t interested in doing business with a bank like his,” Henderson said.
Bajaj, owner of the computer networking company, which has 2,700 employees. She thinks the study will enlighten not only skeptical lenders, but women who are eager to take the entrepreneurial plunge.
MEMO: This sidebar appeared with the story: THE REPORT “Women-Owned Businesses: Breaking the Boundaries,” costs $29.95 for one to four copies, and $24.95 for five or more, plus postage. For more information, call the National Foundation for Women Business Owners, 1100 Wayne Avenue, Suite 830, Silver Spring, MD 20910 (301) 495-4975.
This sidebar appeared with the story: THE REPORT “Women-Owned Businesses: Breaking the Boundaries,” costs $29.95 for one to four copies, and $24.95 for five or more, plus postage. For more information, call the National Foundation for Women Business Owners, 1100 Wayne Avenue, Suite 830, Silver Spring, MD 20910 (301) 495-4975.