It’s obvious that men own and operate more businesses than women. In fact, women-owned businesses are still categorized as minority businesses. However, a recent study conducted by FitSmallBusiness.com, an online business publication. Shows that regarding revenue and job creation rates women are in the lead.
Men own over 75% of businesses, but the recent study shows the women tend to be more effective leaders, create more jobs, have a larger appetite for growth, and significantly improve startup company performance.
This study was compiled through research and analysis of data. Through this thorough analysis, FitSmallBusiness.com concluded that there are five reasons why women entrepreneurs are more successful than male entrepreneurs.
Female-Owned Firms Generate Higher Revenues
According to FitSmallBusiness.com “Womenable, a social enterprise firm focused on women’s entrepreneurship, analyzed the growth trends of male- and female-owned companies from 1997-2014, and found that businesses owned by women saw a 72.3 percent growth. Male-owned firms, on the other hand, grew by 45.1 percent over the same time period.”
Female-Owned Firms Create More Jobs Than Their Male-Owned Peers
The Census Bureau found that the number of U.S. employees that worked at businesses owned by men grew by 0.37 percent from 2007 to 2015 while the number of employees at women-owned businesses experienced an 18.39 percent growth from 2007 to 2015. In total women-owned businesses created 1.24 million more jobs than their male counterparts, despite a fewer number of business total owned by women. This is because women businesses experienced a 20% growth rate during that time, while the male business growth rate was 4.86 percent.
Women Executives Significantly Improve Startup Company Performance
Women don’t have to own an entire business to create such astounding effects. First Round, a seed-stage venture firm, found that having a woman co-founder can help companies perform better in return investments than companies that have only male founders. In fact, Dow Jones VentureSource conducted research that shows that more female executives in a company correlate with higher success rates.
Women Are More Effective in Senior Leadership Roles
According to CEB, a research company, strong leadership results in double the revenue of businesses with weak leadership. Another study conducted by Harvard Business Review shows that women are often stronger leaders than men. In fact, “The research provided hard data on the key competencies that top leaders should exemplify. Out of 16 leadership competencies, which included problem-solving, driving for results, and collaborating with others, women scored higher than men in all but one.”
Effective leadership is a driving force for productivity and attract highly talented professionals, which lead to higher revenues.
Women Have a Larger Appetite for Growth
A BizWomen survey of 1,366 business owners proved that 32 percent of female-owned businesses are in active expansion mode versus 27 percent of businesses owned by men.
Women are more interested in expansion, and they are also more likely than men to start new ventures. A Centre for Entrepreneurs study showed that close to half of women polled plan to start another business within the next three years, while just 18 percent of men were planning on starting a new venture.
The FitSmallBusiness.com study clearly shows the power of a minority-owned business. It seems that we often overlook these businesses’ power and potential, which could be unlocked by embracing true diversity. Women-owned businesses are just one example a minority business type that could lead to growth in several ways. It’s time we recognize the strengths of all peoples and realize that in terms of success size really doesn’t matter.