The other day, I read an article that blew me away. Writing in Forbes, entrepreneur Deborah Sweeney reminds us that until 1988, women entrepreneurs could not get business loans without a male relative as a cosigner. It didn’t matter if the male relative was even involved in the business, or if he was under 18; he was essential to experienced businesswomen getting the loans they needed to grow their companies.
“As a 43-year-old female CEO, it is difficult for me to get over that in my lifetime women business owners had to rely on men to obtain a business loan,” Sweeneywrites.
What’s more, she writes, many people she mentioned this to didn’t believe it was true. So Sweeney delved into the history of HR 5050, the Women’s Business Ownership Act of 1988 (it’s well worth reading her article in its entirety.)
Sweeney’s piece reminded me that a lot of the things we businesswomen take for granted are relatively new. After all, until 1974, American women could not apply for credit on their own.
The U.S. Census Bureau didn’t separate out data on minority-owned and women-owned businesses until 1972, when there were 402,000 women owned businesses in the United States. Since then, American Express OPEN reports, the number of women-owned businesses increased a dramatic 31 times, reaching 12.3 million this year.
From owning less than 5% of the nation’s businesses before the 1970s, by 1988, women already owned 30% of America’s businesses, and were starting businesses at more than twice the rate of men, according to a report from the Committee on Small Business.
Employment by women-owned firms grew even faster, as did their revenues. Employment increased 40 times, from 230,000 people to 9.2 million employees, while revenues increased 217 times, from $8.1 billion to $1.8 trillion.
Progress for women entrepreneurs: You’ve come a long way, baby?
The congressional representatives who voted for HR 5050 in 1988 were prescient. The law wasn’t inspired so much by a sense of fair play as by an understanding of how much women-owned business could contribute to the economy if they weren’t limited by archaic lending restrictions.
The bipartisan report concluded that women-owned businesses could be the solution to American competitiveness in the world economy, and predicted that by 2000, women could easily own 50% of the nation’s businesses.
While they haven’t quite reached that mark, women-owned businesses are getting closer every day. According to data from American Express, women now own 39% of the nation’s 28 million small businesses. Between 2007 and 2016 alone, the number of women-owned businesses grew by 45%. Clearly, women entrepreneurs are a force to be reckoned with.
The way forward
But there’s still a long way to go. What problems and challenges do you see as a woman entrepreneur? Here are some ways you can take action.
- Get out and mingle. Join a network of like-minded women entrepreneurs like Young Women Social Entrepreneurs (YWSE), HelloFearless or The National Association for Women Business Owners (NAWBO). (NAWBO had already been around for 13 years when H.R. 5050 was signed into law, and now has over 10 million women business owners as members.)
- Get heard. WIPP (Women Impacting Public Policy) is a national nonpartisan organization that seeks to impact public policy in order to help women entrepreneurs. The organization surveys its members on a regular basis to uncover the biggest concerns affecting their businesses, and then lets Capitol Hill know what issues matter most to its members.
- Get help. The SBA’s network of Women’s Business Centers offers advice, resources and consulting to help women start and grow businesses in an effort to level the playing field for women entrepreneurs. There are WBC locations nationwide; visit the website to find the one nearest you.
- Get involved. There are so many ways to make a difference in your community. Start a women’s business organization of your own. Offer to mentor a young woman entrepreneur. Join an organization that helps teach girls about starting their own businesses.
According to American Express OPEN’s latest report, 67% of women business owners are 45 or older. The next largest age group, 25-44 years old, account for 31% of women entrepreneurs. That’s a lot of younger women business owners who may not realize how recently women business owners were still considered second-class citizens. Speak up, educate both women and men about the history of women’s business ownership, and never forget how much work remains to be done.[“Source-smallbiztrends”]