Women are dominating the business world to a never-before-seen level. As of 2024, women own nearly 40% of all companies in the U.S. The remarkable thing is the rate of growth for women in business. In the last four years, the number of women-owned businesses has increased at nearly double the rate of men’s.
From 2019 to 2023, women-owned businesses grew faster than men-owned businesses for number of firms, employment, and revenue, according to this Wells Fargo report.
This means more and more women are taking on the challenge of opening their own businesses. And they’re crushing it so far. Women-owned businesses currently generate $2.7 trillion of revenue and supply 12.2 million jobs per year.
That impact is massive in ordinary times.
What makes these statistics really interesting is their timing compared to the worldwide COVID-19 pandemic. Women navigated the economic and business-altering effects of the pandemic in fascinating ways.
Women Business Owners Display Grit, Creativity and Agility in the Face of Adversity
In the early days of the COVID-19 pandemic, despite business closures, businesses owned by women were more likely to persevere. In 2020, women-owned businesses grew their workforces and increased their revenue while men’s numbers shrank. Throughout the pandemic, women-founded businesses added 1.4 million jobs and $579.6 billion in revenue to the economy.
These statistics are notable. In the face of adversity, women not only find ways to survive, but to adapt and thrive. Furthermore, they created job opportunities for more than one million people.
A Quick Aside: It’s Not Women vs. Men
At Gutsy Money, we are never anti-men (we love ‘em!) and we are always pro-women. We take every opportunity to shout from virtual rooftops about women’s wins! We love that our whole business is based on supporting women in business to build financially-organized companies poised for sustainable and lucrative growth.
It’s important to note that we believe it’s possible to support one group without tearing down another. It’s also just a fact that women are centuries behind men in terms of being legally allowed and socially encouraged to enter the workforce and to control their own money.
Poised for Growth?
Growth is a gift that has its own challenges. As entrepreneurs, my co-founder Terra Rose and I are aware that while growth is the goal of every business. In addition to increasing revenue, business owners may have growth goals that involve scaling, adding locations, expanding their product offering, acquiring other businesses, and more.
The golden question all entrepreneurs and business leaders want to answer is, How do I meet my business growth goals?
A lot of this question is answered by the sales and marketing departments (acknowledging for solopreneurs, they are the sales and marketing department as well as all others).
But often too much of the focus on business growth is put on these factors outside the business without first taking a look at factors inside the business.
How to Engineer Smart, Sustainable Business Choices
Smart, sustainable growth is dependent on making informed choices. Here are a few examples of choices that depend on awareness of multiple business factors.
Advertising sounds like a great way to get more customers. But is it? To find out, the business owner needs to know the ROI on her ad spend. Ideally, she’ll have it broken down in terms of where she spends it (social media, Google, print, etc.). She’ll want to measure the rate at which revenue increases as correlated to increased ad spend. She’ll need to factor in the opportunity cost of directing money toward ads. Will it require a corresponding decrease in budget elsewhere and what is the cost of that? Is increasing ad spend as simple – and effective – as it seems?
Let’s say a business owner has a close rate of 80% while her salesperson has a close rate of 50%. It seems like it makes sense to have the owner on more sales calls than the salesperson until you take a look at factors like how much she is paid versus the salesperson (weighing the hourly cost of the owner’s time versus employee’s), the opportunity cost of the owner’s time being directed toward sales (what other duties is the owner giving up to take calls and what is the cost of those going unfulfilled or directed to another team member), etc. Who should do more of the calls?
Cutting costs seems like a great way to increase margins, so let’s say a business owner switches to another supplier who has cheaper prices. But the new supplier has much shorter payment terms, thus accounts payable can no longer be stretched. This strains the business, forcing them to pass along less favorable terms to their customers. Perhaps this change – made in a worthy pursuit of decreasing COGS – also decreases revenue due to customer turnover. Is it worth it?
Of course there is risk in every decision because all factors outside the business cannot be accounted for. But the answers to the complex questions above live inside the business and most of them live in the business’s books.
A business’s financial reports tell many stories for those who are willing to look and know how to interpret them. Those stories can be used to scale a business’s growth sustainably and with some predictability. No business is without risk or volatility, but both can be reduced by keeping accurate books and learning how to use the information there to weigh choices.
This can be comforting for business owners who may feel like growing their business and success (especially as reflected in the stories Hollywood chooses to make into shows and movies) is luck-based or mysterious or hinges on an “it” factor that can’t be defined or learned.
Before the books can be used to inform business decisions that fuel growth, they must be set up properly. All sources of revenue and expenses must be accounted for and organized in a way that translates into clear financial reports. Mistakes and oversights in bookkeeping may seem small in the moment but they can translate to false stories in the financial reports. Making business decisions based on incorrect narratives can be catastrophic.
What’s Next for Women in Business?
The statistics above indicate women-owned business growth despite outside powerful factors like a worldwide pandemic. Hopefully that is indicative of these women in business utilizing financial awareness and savvy to make informed decisions. If you feel less-than-confident about how your business finances are organized or you don’t know how to make sense of the information on your financial reports to make educated choices, we’ve got you.
At Gutsy Money, making sense of your money so you feel confident about your business choices is what we do. Reach out to schedule a free call to learn more about our bookkeeping and business finance coaching today.
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