TSE Quick Take: New U.S. Stats on Entrepreneurs

The U.S. Census Bureau has released its first-ever Annual Survey of Entrepreneurs. It shows women own 20% of firms with paid employees — but contribute only 4% of employer-firm sales.

The Story Exchange By The Story Exchange

Credit: #WOCinTech Chat

Credit: #WOCinTech Chat

The U.S. Census Bureau today unveiled its inaugural Annual Survey of Entrepreneurs, offering a snapshot of American business with paid employees in the year 2014. It estimates that women owned nearly 20 percent, or 1.1 million, of the country’s 5.4 million employer firms, according to a bureau press release.

Sales from women-owned employer firms totaled $1.3 trillion, which accounted for only 4 percent of all employer firms’ sales — numbers that show the size of women’s firms continues to lag.

The new survey is part of in an effort to provide more frequent portraits of America’s business owners and was carried out in partnership with the Ewing Marion Kauffman Foundation and the Minority Business Development Agency. Up to now, the bureau has only offered a comprehensive dataset known as the Survey of Business Owners and Self-Employed Persons (SBO) that comes out every five years and covers a somewhat distant year.

The 2014 survey, described by the bureau as a supplement to the SBO, used a sample about 290,000 business owners to create its estimates. By contrast, the most recent SBO, which covered 2012 and was released at the end of 2015, examined 1.75 million of America’s small businesses.

The 2012 SBO estimated there were a total of 9.9 million majority women-owned firms that year, up a strong 27 percent from 2007, when there were 7.8 million. Women increased their share of the overall ownership pie to 35.8 percent of U.S. businesses, up from 28.7 in 2007.

Female-owned firms also lag in job creation. A very large proportion of women’s firms — 89.5 percent — were solo enterprises with no employees, compared to 80.4 percent for all firms, according to the 2012 SBO.

The Census Bureau said the new survey findings and the SBO data cannot be directly compared. However, the number of women-owned employer firms in the two studies look roughly the same at about 1.1 million.

In 2014, minorities owned 24 percent of women-owned employer firms, compared to 17.5 percent of all firms, the new survey showed.

The Story Exchange has been collecting its own data about women business owners in a global, multiyear research effort called the 1,000+ Stories campaign. Roughly 42 percent of the first 1,000 female entrepreneurs who chose to take part were the heads of small employer firms  with 2 to 5 employees.

Scaling up is no easy feat — it takes time, effort and often courage to grow a venture, as our ongoing series has shown (read Part 1 and Part 2 of the series). Women have been starting new companies at a rapid pace, as our breakdown of SBO data over the years shows, but getting them to scale remains a significant challenge.

Of course, women are not strangers to the slow-and-steady approach. It seems only a matter of time before the big new crop of women who opened businesses in recent years manage to grow their companies and add to the number of jobs they bring to the economy.

Posted: September 1, 2016

The Story ExchangeTSE Quick Take: New U.S. Stats on Entrepreneurs