Maryland has had middling success compared to other states in developing women-owned businesses, but those firms have been more successful at generating revenue, a new report found.
American Express’s 8th annual State of Women-Owned Businesses Report found that there were an estimated 234,400 women-owned firms in Maryland in 2018, a nearly 1.5 percent change from the year before.
Since 2007, the number of women-owned firms has grown 36 percent, ranking 23rd in the country. Nationally, the number of women-owned businesses grew by 57.6 percent during the same period.
Women-owned businesses in the U.S. account for about 40 percent of all firms but just 8 percent of employees and 4.3 percent of revenues.
Revenues at women-owned firms in Maryland grew nearly 50 percent since 2007, good for 10th in the nation. Women-owned firms will bring in an estimated $33.5 million this year.
A lot of that success can come from proximity to the federal government, said Geri Stengel, an American Express research adviser.
“One way that the federal government, states and cities support women-owned businesses is by having certification programs,” she said. “Women-owned businesses that get government contracts tend to be larger.”
This year’s report was the first to take a historical look at the growth of small businesses. It goes back to 1972, the first year U.S. Census data on women-owned businesses was available.
The report found that over 48 years, the number of women-owned businesses in the country has increased 31 times, from 402,000 to 12.3 million this year. Over that time these companies’ revenues have grown from $8.1 billion to $1.8 trillion.
The number of large businesses created by women has increased as well. Over the past 11 years, the number of women-owned businesses generating more than $1 million of revenue has increased 46 percent, compared to 12 percent of all U.S. businesses.
Stengel attributed much of the growth to a change in culture, a change she’s noticed as she gives talks to entrepreneurs.
“If I were to have asked women in the audience 5-7 years ago how many people in the audience want to be a billion-dollar business, there would have been giggles and no one would have raised their hand,” she said.
Now, Stengel said, nearly a quarter to a third of the room raises their hands. “I think overall, ambition has changed.”
Another thing that has changed over the past couple of years has been the strengthening of the economy.
Coming out of the recession, many women entrepreneurs created businesses just to earn a living wage. Many of their businesses focused on services such as haircuts, nail salons and other personal services.
But now, with the nation at or near full employment, new women-owned businesses normally have an idea to fill an unfilled market, Stengel said.
“In the last year, one of the things that we’ve seen now that the employment levels have returned to normal is the increase in opportunity entrepreneurs, those people that see something in the market,” she said. “Those people tend to have a higher success rate.”
Other contributing factors to the increase in the number of women-owned businesses and their growing revenues has been more training and opportunities. These opportunities also offer women the ability to network.
Technology has also helped to democratize the process. It’s easier for women to set up a business from a laptop in the bedroom, whether it is their primary way of making money, or just a “side hustle.”
Tracking the growth of women-owned businesses can be important, too, Stengel said.
“What gets measured gets managed,” she said. “Really, it’s this tracking of the numbers that ensures that programs get in place to support women-owned businesses.”