By Rieva Lesonsky
Recently we celebrated Women’s History Month, and women business owners continue to make history. The inaugural 2024 Impact of Women-Owned Businesses from Wells Fargo shows that women own 39.1% (about 14 million) of all U.S. businesses, a 13.6% increase from 2019 to 2023.
American Women Are Prospering
A new report Women and Wealth: Growing the pie, creating opportunities from the Bank of America Institute shows women are positioned to be “key drivers of economic growth” due to “increased wage gains, coupled with the ‘Great Wealth Transfer.’”
The report stresses these gains are not at the expense of men but likely driven by the fact that the gap between male and female labor force participation rate (LFPR) and the employment ratio is narrowing in the United States. According to the report, “This suggests the emergence of a job market that is providing more employment opportunities for working women.” According to the U.S. Bureau of Labor Statistics (BLS), women now make up nearly 47% of the total workforce.
This means “women’s prosperity will help ‘grow the pie’ of total affluence, expanding opportunities across the board. And Bank of America’s internal data shows, “the difference in median annual income growth between men and women has fallen to around 4% at the end of 2024 from 6.5% in 2022.
The Gender Gap
The Women and Wealth report shows there’s still a significant gender/wage gap in America. But the younger the women, the smaller the gap. Women aged 16 to 24 earned 90.6% as much as men in the same age group. However, as women reach their peak earning potential (ages 35 to 54), the gap widens to about 81%. And the gap becomes a gorge when women aged 55 to 64 earn 76% of what men in that age group make.
The Great Wealth Transfer
The Women to Wealth report says, “Wealth is tilting female even without pay parity.” This “Great Wealth Transfer” refers to “an estimated $124 trillion that’s expected to be transferred to women through 2048” via inheritance. This means American women will “soon control more money than ever before.”
Combine this with the fact that women today are more educated, enter the workforce at higher levels, have greater career aspirations with the expectations of higher pay, have fewer children, and stay in the workforce longer. The result is that “women are in control of their finances earlier in their lives.” Plus, they’re more financially literate and know how to grow their wealth from an earlier stage in their lives.
Best U.S. States for Women Entrepreneurs
Not all women in America face the same level of challenges. Research by Printful, reveals that some states offer women better access to funding, mentorship, and business-friendly policies. For details, check out Printful’s post.
The top 10 states for women business owners:
- California
- New York
- Maryland
- Florida
- Colorado
- Illinois
- Massachusetts
- Alaska
- Oregon
- Vermont
Women Entrepreneurs Are Optimistic
Women small business owners are reaping the rewards as well. The 2024 Women and Minority Business Owner Spotlight, released by Bank of America last fall, shows that 57% of women business owners said they planned to expand their businesses in 2025 by:
- Growing their customer base (65%)
- Creating an online presence (48%)
- Utilizing professional services (35%)
However, raising money has been an issue for these business owners. While 60% said they think women entrepreneurs currently have equal access to capital as men entrepreneurs, 22% believe they’ll gain equal access sometime in the future, and 18% don’t think women will ever get it. In addition, 25% of the women entrepreneurs say they’ve already experienced “challenges” accessing capital for their companies.
The financial struggle was underscored in the 2024 State of Women’s Small Business Report from Block Advisors, which revealed that 42% of the women small business owners surveyed who had applied for a bank loan had never been approved. And 15% were never told why they were rejected. This resulted in 89% of the women self-funding using personal savings and credit cards.
Like the women surveyed by Bank of America, these women were “somewhat or very positive” (94%) about their businesses this year, and 75% felt “very positive” about the financial resilience of their companies.
Perhaps the most difficult challenge for the women surveyed in the Women and Minority Business Owner Spotlight was that most (63%) said they needed to work harder to achieve the same level of success as men business owners. But 45% are motivated by the desire to build generational wealth for their families.
More from AllBusiness:
Global Women Entrepreneurs
While the small business outlook for women in the United States is mostly positive, the environment is not as bright for women entrepreneurs around the globe. A recent report from the Cherie Blair Foundation for Women, in partnership with Intuit and the World Bank’s “Women, Business and the Law” project, Empowered or Undermined? Women Entrepreneurs and the Digital Economy studied women running businesses in nearly 100 low- and middle-income countries.
Women own businesses in many of these nations, including 47% of companies in Latin America and the Caribbean, 44% in East Asia and the Pacific, and 30% in Sub-Saharan Africa.
However, the report states, “The full economic potential of women’s entrepreneurial spirit remains unrealized. Despite modest improvements in recent years, the World Economic Forum estimates it would take the world’s women 152 years to reach economic parity.”
The report is quite detailed, and I encourage you to read it. Here are some key findings. Of the global women entrepreneurs surveyed:
- 78% say access to capital is their top challenge.
- 45% do not have regular internet access.
- Social media is a vital tool for women’s businesses—yet e-commerce adoption remains low.
- Smartphones unlock vital business tools for women entrepreneurs: those without smartphones are 5.5 times less likely to use social media for business and 3.75 times less likely to have a bank account or mobile money account.
- Over 20% fear potential harassment from male customers, and 77% take proactive safety measures to protect themselves.
- 38% of women currently use AI—however, just over one-fifth feel either underprepared or completely unprepared for the wave of new business technologies.
When Women Prosper, Everyone Prospers
For global women entrepreneurs, according to the report from the Cherie Blair Foundation, more access to digital tools is essential, and “countries prioritizing digital and financial inclusion today will benefit from more equitable economies tomorrow.” The report concludes, “The challenge now is not just expanding access to technology, but ensuring that women have the skills, security, and support to use it to its fullest potential so that they can thrive as business owners and achieve their economic ambitions.” American women entrepreneurs need much of the same.
We all need to realize that when women prosper, everyone prospers. According to Bank of America Global Research, if women had the same labor force participation rate as men, it would increase U.S. Gross Domestic Product (GDP) by 3.9% or $1.1 trillion. Closing the gender wage gap would add another $866 billion to the GDP. And closing both the gender employment and wage gaps could boost the GDP by about 7.5% or $2.1 trillion. If this shift toward equality were to extend to the EU and the UK, the global economy could expand by $3.5 trillion.
Read the full article here
