Women-owned small businesses are becoming more common, but they're still playing catch-up when it comes to getting start-up funds, generating revenue, and staffing their companies, experts say.
October is National Women in Small Business Month, set aside by the U.S. Small Business Administration to focus on key challenges facing female job-creators, Reuters reports.
Companies owned by women grew at a rate of 44% between 1997 and 2007, according to the latest government data. That's twice the 22% growth rate of businesses owned by men.
Today, nearly 30% of all businesses are owned by women, up from 5% in 1970, according to the SBA. Of those businesses, 90% are small businesses, the Census Bureau reports.
But with these strides come some frustrations.
Start-up funding challenges
Women-owned small businesses often face a cash crunch when it comes to attracting investors. Venture-capital funds are "going to the sexier businesses that are usually white-male owned in technology, and that's not where women are," one expert told Reuters.
Instead, women tend to focus their businesses around services, which generally don't get huge investments. So-called angel investors and microloans are just a few ways to help level the playing field, experts say.
A 2009 survey underscored the revenue issues many women face in running their own businesses: Men are twice as likely as women to own a business that brings in $1 million or more in annual revenue.
Again, experts say it's the focus on service-oriented businesses that's driving this disparity. To make up for the difference, many female entrepreneurs are turning to loans, crowdfunding, and even their family and friends.
Women-owned businesses are also typically smaller than their male-owned counterparts, Reuters reports. This is likely because of the above-mentioned financial constraints. It could also reflect an across-the-board challenge in finding skilled workers.
To address these challenges, the Small Business Administration is hosting a series of free webchats for female entrepreneurs every Thursday in October. Topics include finding capital and taking advantage of contract opportunities with the federal government.