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The State of Women Entrepreneurs
by Rieva Lesonsky
February 6, 2023
Young female entrepreneur standing outside of her cafe holding papers smiling
The Outlook Gets Brighter for Women Business Owners

It’s been a challenging few years for small business owners who’ve dealt with a global pandemic, shaky supply chain, uncertain economy, inflation, and labor shortages.

Women-owned businesses have faced all those challenges and more and remain undaunted about starting and growing their own businesses.

How are women entrepreneurs actually faring?

Let’s take a look at the numbers.

The 2022 Annual Report from the National Women’s Business Council ( NWBC) boasts that women-owned businesses “contribute substantially to entrepreneurship in the United States.” Its latest stats (from 2019) show 1.2 million women-owned employer firms (20.9% of all businesses with employees). These businesses grew 16.7% between 2012 and 2019 compared to the 5.2% growth rate for men-owned firms. In addition, gross receipts for women-owned companies increased “exponentially” (51.9%) during that time, while revenues for employer firms owned by men rose 34.2%.

Women-owned businesses with employees employed 10.8 million workers in 2019, an increase of 28% from 2012, far better growth than men-owned employer firms had with 10.8% workforce growth.

There was also good news for the 10.9 million women-owned businesses without employees. These companies now comprise 41% of all non-employer firms in the country. And between 2014 and 2018, while the number of women-owned companies without employees grew slower than men-own businesses without employees—4.2% vs. 5.2%, the companies owned by women boasted higher revenue growth—20.1% vs. 14.4%.

Adding to the total, a survey from Lending Tree says 14.5% of small businesses are equally co-owned by men and women.

Women-owned businesses earned $1.8 trillion in revenues, but that’s only 4.3% of the total private sector annual revenues.

Women of Color

The news wasn’t as good for women of color, according to Guidant Financial’s 2022 Women in Business Trends report. Only 22% of the survey respondents were women; of those, 9% were Black, 2% were Hispanic, 2% were Asian, and 2% were Indigenous Americans.

Guidant notes that the 2021 report had shown a “rise in the diversity of small business owners,” and it doesn’t know if the decrease of women of color-owned businesses is a result of the pandemic.

The Best States for Women Business Owners

Deputy, a tech employee scheduling platform, analyzed 2021 data from the U.S. Census Bureau and the U.S. Small Business Administration Office of Advocacy to identify the states with the most and least women business owners. The study didn’t include North Dakota and Rhode Island because Deputy says there was “a lack of data for women-owned businesses in those states,” but the District of Columbia was included.

The top 10 states are:

  1. Washington, D. C.
  2. Florida
  3. Colorado
  4. Vermont
  5. Georgia
  6. California
  7. Wyoming
  8. Louisiana
  9. Maryland
  10. New York

The states with the least number of entrepreneurial women are:

  1. West Virginia (has the fewest women business owners)
  2. Wisconsin
  3. Kentucky
  4. Delaware
  5. Indiana
  6. Pennsylvania
  7. New Mexico
  8. Ohio
  9. Iowa
  10. Arkansas

Who are America's Women Business Owners?

Guidant’s 2022 Women in Business Trends report takes a deeper dive into the demographics of women-owned businesses.

Is there a Generation Gap?

Not for women business owners, says Guidant. While the average business owner typically is a Gen Xer or baby boomer, women entrepreneurs are 23% more likely to be Gen Xers. The respondents to Guidant’s report were:

  •  Gen X: 69%
  • Boomers: 19%
  • Millennials: 11%

Overall, women were still the minority of Gen X (26%) and millennial (26%) business owners. Guidant suggests, however, that this might be a sign that women may be “claiming a larger piece of the future small business pie.”

Age of Business

Although the women business owners were younger than before, the age of their businesses was comparable to that of all small businesses.

  • 49% of businesses owned by women were 0-5 years old (vs. 52% on average)
  • 17.5% were 6-10 years old (vs. 23% on average).
  • 12% were 11-15 years old
  • 6% were over 20 years old
  • 5% were 16-20 years old

Overall, women were slightly more likely to own a business 10 years or older (24% compared to 19%) than men.


The Guidant report shows that most women-owned businesses were retail businesses—storefronts and online. The breakdown:

  • 22%: Retail
  • 16%: Health, beauty & fitness
  • 13%: Business services
  • 12%: Food & restaurants
  • 5%: Education & training


The Guidant report shows that 59% of women-owned businesses are profitable. Guidant isn’t concerned that 35% aren’t profitable because over half of the companies are relatively new (5 years old or younger), and it typically takes two or three years for a small business to become profitable.


The entrepreneurial women in the Guidant survey are focused on three main growth strategies this year:

  • Hiring: 58%
  • Investing in digital marketing: 37%
  • Expanding or remodeling their businesses: 31%

Most women’s growth plans did not include a physical expansion—only 8% are considering expanding to a new location or adding additional services.

The GEM 2021/2022 (Global Entrepreneurship Monitor) Women’s Entrepreneurship Report: From Crisis to Opportunity shows that 20% of early-stage (less than 3.5 years old) women-owned businesses adopted new technologies to help them grow in 2021.

Women entrepreneurs increased their use of digital technologies to adapt to pandemic conditions. Over two-thirds of early-stage women entrepreneurs and about one-third of established women-owned businesses did this, according to the GEM report.

One area where American women entrepreneurs are at the forefront is offering innovative products to international markets. About 40% of all global women-owned businesses focus on their local and national markets. But for more than 40% of American women business owners, 25% of their customers are international.

The 2022 Women & Minority Business Owner Spotlight report from Bank of America also shows that women-owned businesses are ready to grow:

  • 63% expect their revenues to increase
  • 47% plan to expand their businesses

Women-Owned Startups

The Kauffman Foundation’s Trends in Entrepreneurship series, Who is the Entrepreneur? spotlights new entrepreneurs and shows that in 2021 women started 39.9% of businesses, compared to 60% created by men. The percentage of women-owned startups has been relatively consistent since 1996, ranging between a high of 46.4% in 1998 and a low of 36.3% in 2007.

Most women who own an independent business started it from scratch (33%) instead of buying an existing company (23%), according to the Guidant report. And women were more likely to own an independent business (56%) than a franchise (44%).

Of the women who are franchisees, more (34%) bought their own location instead of purchasing an existing franchise location (10%).

Startup Motivations

Guidant’s report looked at why women start their own businesses:

  • 58% wanted to be their own boss
  • 38% were dissatisfied with corporate America
  • 30% were ready to pursue their passion
  • 21% were either bored or financially insecure and started a business because they weren’t ready to retire

These were, according to Guidant, roughly the same reasons men started businesses, with the significant difference being that women were 7% more likely to pursue an opportunity than the average business owner. And the report found that despite the challenges of business ownership, 74% of the women entrepreneurs were somewhat or very happy owning a business, 17% were somewhat or very unhappy, and 9% were neutral.

The GEM report showed different motivations for starting a business:

  • 72%: want to build wealth
  • 71%: desire to make a difference
  • 46%: job scarcity

About 40% of women started their companies with 1–5 employees, and another 40% were solopreneurs, according to the GEM. Over 10% of women-owned businesses have 20 or more employees, far above the global average of 3%.

Another advantage: entrepreneurship is encouraged in America. According to the GEM report, almost 80% of American women say entrepreneurship is a “good career choice.” In addition, about 67% say it’s relatively easy to start a business in the U.S., with 61% believing there are “good opportunities” to do so, though 51% fear business failure.

Challenges of Being a Woman Business Owner

Experts in the GEM report pinpoint three areas of concern for women business owners: equal access to financing, regulations, and sufficient family support services.

The lack of equal access to capital is echoed in the 2022 Women & Minority Business Owner Spotlight report from Bank of America, with 29% of women business owners saying they don’t think they’ll ever have equal access to capital. However, Fundera reports that women business owners are less likely to apply for business loans than men—25% of women business owners seek business financing, while 33% of men do.

The NWBC reports that more women-owned businesses (62%) than men-owned companies (55%) sought financing to meet operating expenses, while more men (33%) looked for funding to expand their businesses, pursue new opportunities, or acquire business assets than women (26%).

The Female Founder Collective (FFC) spotlights four other common challenges women entrepreneurs face, including:

  • Being taken seriously: To combat this, the FFC suggests you “surround yourself with a community of like-minded women [who] can help you boost your confidence and recognize your potential.”
  • Owning Your Accomplishments: This is often harder for women since we’re typically more collaborative and taught to spread recognition, not claim it. Instead, the FFC says to use first-person language when referencing your abilities and successes. [Make sure you don’t overdo this, or you can come off as self-centered and ego-driven.]
  • Balancing Business and Family Life: This has long been a battle for women in the workplace. The World Bank says women have “a disproportionate share of housework and childcare responsibilities.”
  • Building a Support Network: FFC notes that nearly half of female founders say they’re held back by a lack of mentors or advisers. They suggest joining membership communities like theirs [and others]. And, of course, you can get a free mentor from SCORE.

And overall, 59% of the women business owners surveyed by Bank of America believe they have to work harder than men for the same success.

Future Outlook

Despite how the COVID-19 pandemic ravaged so many small businesses, the GEM report notes that women business owners were less likely to have closed their companies than men business owners in 2021.

The women who exited their businesses did so for a variety of reasons:

  • 40%: COVID-19 pandemic
  • 20%: not profitable
  • 17%: family reasons
  • 3%: opportunity to sell

Women surveyed in the Guidant report thought the “future was a bit murky,” with 45% saying they’re somewhat confident, 5% feeling very confident, 28% feeling somewhat unconfident, and 5% saying they’re very unconfident.

GEM reports that women entrepreneurs “continue to face challenges in startup and growth compared to men.” And it notes a “recent shift in focus from encouraging women to start new businesses to better-supporting women entrepreneurs as they grow their companies. Some of the most difficult barriers to growth for women-owned businesses occur in the growth phase.”

More Unicorns are Born

According to GEM, several new trends will hopefully address some of these concerns, including “the rise of women’s angel investment groups, women-focused investment firms, and gender-smart impact investing. Women-focused incubators and accelerators are also emerging to provide a supportive environment for women founders with models that attempt to overcome network barriers and attract more investment capital to support innovation in women’s markets.”

Women are increasingly leading high-growth firms. A startup that earns more than $1 billion is called a unicorn. Crunchbase reports that in 2021 a record-setting 595 companies joined The Crunchbase Unicorn Board, and 83 (14%) were founded or co-founded by women. And in the first part of 2022 (the latest stats), 10% of unicorn companies were founded or co-founded by at least one woman.

While this appears to be an optimistic outlook for women business owners, women need to keep fighting for their fair share. As the NWBC’s call to action in their annual report states, “Now, more than ever, we must press for the change we know is possible and vital to the success of women business owners and our global economy.”

About the author
Rieva Lesonsky
Rieva Lesonsky is president and CEO of GrowBiz Media, a custom content and media company focusing on small business and entrepreneurship, and the blog
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Glenn W. Bailey Foundation

Glenn W. Bailey Foundation

The Glenn W. Bailey Foundation serves Florida, New York, Connecticut and DC area organizations working to help us realize our vision and continue our mission of fostering pathways to success in STEM careers and entrepreneurial opportunities. Our Foundation’s focus also includes solving complex environmental and high-mortality disease research funding issues.

Glenn W. Bailey Foundation
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