According to a recent McKinsey study, female entrepreneurs could contribute as much as $12 trillion to global GDP by 2025. So what’s the shape of women’s entrepreneurship today? The American Express OPEN Small Business Growth Pulse, based on a survey of 1,001 small businesses with $250,000 or more in annual revenues and fewer than 100 employees, seeks to find out. Here are their latest results:
Women Business Owners’ Outlook for Growth
|Growth is the Top Priority for Their Business||79%||78%||80%|
|Plan to Make Capital Investments in the Next Six Months||71%||64%||77%|
|Plan to Hire Employees in the Next Six Months||59%||58%||61%|
|Invest Significant Amount of Personal Time in Their Business||89%||89%||88%|
|Invest a Substantial Portion of Personal Finances to Grow Their Business||68%||62%||72%|
|Sacrifice Time Spent with Family to Grow Their Business||71%||69%||73%|
|Spend a Larger Percentage of Time Working ON Their Business to Drive Growth Rather Than IN the Business Managing Details||60%||57%||63%|
|Have Cash Flow Issues||64%||65%||63%|
|Confident They Can Access Funding to
Grow Their Business
|Say Credit/Charge Cards Are An Important
Tool to Fund and Grow Their Business
|Say Credit Card Rewards are Very Important
to Their Business
Female entrepreneurs: confident, growth focused, financially savvy
As you can see, the basic data lines up regardless of gender.
Nearly 8 in 10 women businesses owners (78%) state growth is the top priority for their business, on par with men (80%) and small business owners overall (79%).
Those planning capital investments will invest in computer and systems software/additional software licenses (37%), office furnishings and equipment (22%), manufacturing/production equipment (21%), and real estate (16%).
Women business owners are slightly less likely to say they invest a substantial amount of personal finances to grow their business (62%) when compared to male business owners (72%). Fifty-seven percent of women business owners say they spend a larger percentage of time working ON their business to drive growth rather than IN their business managing details—almost an equal split with those who manage details.
On average, women business owners have been in business 17 years, employ 12 employees, have experienced 19.8% revenue growth over the last three years and in 2014 had yearly revenues of $1,130,000.
Challenges for female entrepreneurs
The biggest challenge faced by women business owners as they grow their business is the same as for all businesses— uncertain economic conditions (24%).
The greatest cash flow concerns for women business owners include having enough cash on hand to win new business (18%), the ability to accurately track cash flow (15%), accounts receivable (14%), the ability to pay bills on time (12%) and the ability to meet payroll (7%). More than 3 out of 4 of women business owners (78%) who use credit cards for business expenses say credit card rewards are important to their business; 45% say they are ‘very important’ to their business. The rewards that they see as most valuable include cash back (76%), airline miles (31%) and travel discounts and gift cards (each, 27%). (Listen up, Amex!)
Entrepreneur Survey Methodology
The American Express OPEN Small Business Growth Pulse is based on an online sample of 1,001 US small business owners/managers of companies with $250,000 or more in revenues and fewer than 100 employees. The anonymous survey was conducted via the Internet by Ebiquity December 9-18, 2015. The poll has a margin of error of +/- 3.1% at the 95% level of confidence.