rss icon

Sunday, 07 June 2015 22:00

Michigan’s women-owned businesses lag peers in revenue growth

Written by  Jill Hinton
Rate this item
(1 Vote)

Michigan ranked ninth nationally for the number of women-owned businesses, but growth in the sector — measured by new entrants, revenues and overall employment — continues to lag.

That’s according to a national report released last month by American Express OPEN and compiled by Womenable Inc., an Empire, Mich.-based for-profit research consultancy that seeks to grow women’s entrepreneurship.

From 1997 to 2015, women-owned businesses in Michigan ranked 49th out of 50 states and the District of Columbia in terms of percentage growth in sales revenues. While women-owned firms nationally grew revenue 78.7 percent in the 18-year period, sales for women-owned businesses in Michigan grew just 27.4 percent.

“Revenue is what is holding a lot of women-owned firms in the state back,” said Julie Weeks, President and CEO of Womenable, noting that the lag is likely tied to larger economic trends.

“As Michigan’s economy goes, so goes business owners in the state, both male and female,” she said.

That Michigan’s women-owned businesses lag nationally didn’t come as a surprise for Bonnie Nawara, CEO of Grand Rapids Opportunities for Women (GROW).

“The old adage is that Michigan is always at least two to three years behind the rest of the country, especially in recovery,” Nawara said.

But Weeks said it’s not all bad news for the state.

“If you look at the difference between Michigan and the country as a whole in terms of the growth and the number of women-owned firms, Michigan is right in the middle of the pack,” she said.

Michigan ranked 27th in the percentage growth in the number of women-owned firms (56.7 percent) and 29th for growth in employment (11.6 percent) from 1997 to 2015, according to the fifth-annual State of Women-Owned Businesses Report that analyzes data from the U.S. Census Bureau’s Survey of Business Owners.

The report found Michigan has an estimated 289,300 women-owned firms, employing 254,700 people and generating combined sales of about $33.7 billion.

New to the report is analysis ranking states by their growth in the number of women-owned businesses after the recession from 2007 to 2015.

Michigan is ranked 21st nationally with 116 percent post-recession growth in the number of women-owned firms compared to the pre-recession period from 2002 to 2007.

Across the United States, the report finds that an estimated 1,200 new businesses a day were started by women over the past year, up from an average of 740 a day the year prior. Four out of 10 new firms are now started by women.

One of the biggest areas of growth both nationally and in Michigan is in minority women-owned businesses.

“That’s one of the big trends that we’ve seen since the mid- to late-1990s,” Weeks said. “At that time, there were less than one million minority women-owned businesses and they represented one in six women-owned firms. Now as of 2015, there are 3.1 million minority women-owned businesses, and they comprise one-third of the women-owned firms in the country.“

She attributes the overall national growth in women-owned businesses to changing demographics.

“I think it’s very similar to the trends that we see among all women, in that there are rising levels of education and work experience, in particular managerial experience,” Weeks said, adding that as women build skills and connections in the corporate world, the next logical step for them is to consider starting their own businesses rather than work for someone else.

That was true for Lia Jensen, who purchased ValPak West Michigan in 2013 and who had previously owned another retail business. She said the need for a better work-life balance is what first motivated her to leave the corporate world and jump back into entrepreneurship.

“I wanted to be more in charge,” Jensen said. “I had young kids, I wanted to be more involved in their day-to-day activities without having to interrupt an employer’s business and feel as if I was being pulled in too many different directions.”

Another factor at play in the overall economy: Often during a recession, women in middle management leave their jobs — whether voluntarily or otherwise, Nawara said. However, that trend also works the opposite way in an economic rebound.

“When the economy picks back up, jobs are much more available” and so if a woman’s business isn’t where she wanted it to be, often she’ll return to the corporate world, Nawara said.

Weeks expects the general upward trend of women-owned businesses to continue.

“I see no end in sight,” she said. “Once you let the genie out of the bottle, I don’t think there’s any going back. If you talk to women business owners who have started their business, they never want to go back to working for somebody else.”

The growth in women-owned businesses perpetuates itself because as more women own businesses, there are more women becoming mentors and “beacons” to encourage others to follow suit, she said.

“Once more women are looking around and seeing entrepreneurial business leaders who are female, then they start thinking, ‘Oh, I could do that, too,’” Weeks said. “It’s a virtuous cycle, once more and more women get into business and they become more visible parts of the community.”

Read 6323 times Last modified on Sunday, 07 June 2015 23:23

Breaking News

September 2018
26 27 28 29 30 31 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 1 2 3 4 5 6

Follow MiBiz