“It’s a good time to be a female entrepreneur,” says Caitin Berens of Inc. Indeed, women-owned businesses have grown by over 54 percent since 1997 at a rate 1.5 times that of the national average, according to a recent American Express OPEN study. Nearly one third of all businesses (or 8.3 million) are now female-owned. The education, health care and social assistance, as well as arts, entertainment and recreation sectors in particular have seen the fastest growth in the number of women-owned businesses in the past decade.
The study shows the South reigning victorious over this budding trend, with the fastest growth rates of women-owned businesses in Georgia at 95 percent growth, North Carolina at 83 percent, and Mississippi and Texas at 75 percent. The only exception to these higher growth rates is Nevada at 92 percent growth, while Alaska, Iowa, West Virginia, Kansas and Ohio come in last. More specifically, the Washington DC metropolitan area ranks number one with the most concentrated growth in the number and economic contributions of women-owned firms, followed by San Antonio and Houston, Texas.
Inc.’s 2011 list of 50 Fastest Growing Women-Owned Businesses supports this Southern inclination, as it includes five Southern businesses in the top ten: Doerle Food Services of Louisiana, Cenergy International Services of Texas, Strategic Communications of Kentucky, Shear Enterprises of Florida and GCS of Virginia. Companies eligible to be on this list were required to have revenues of at minimum $2 million in 2011. Meanwhile, Under 30 CEO put Southern cities like New Orleans, Louisiana and Austin, Texas in the list of Top Ten Cities for Young Entrepreneurs.
What is it about the South that makes it ripe for eager entrepreneurs and higher growth rates for female-owned businesses? Two common threads appear to be lower cost of living and lower cost associated with starting a business in comparison with more expensive metropolises like New York, Boston or San Francisco, which are typically seen as go-to entrepreneurial hubs. Lower living and start-up costs mean lower risk when venturing out on one’s own. So it makes sense that because women also have less access to and more difficulty obtaining capital, that more affordable Southern cities like New Orleans, Austin or Durham, which offer a high quality of life, would make the short list for female entrepreneurs. According to the Center for Women’s Business Research, women average four attempts to obtain bank loans or lines of credit and 22 attempts to obtain equity capital.
Evelyn Contre, founder and owner of Springleaf Strategies, a Raleigh, North Carolina based communications and sustainability consulting firm, believes that one reason more women are starting their own businesses is in order to have more independence and authority over their own work-life balance. “Opening my own business was a way for me to take control of my own destiny. I have so much more flexibility. A lot of women want that – to raise a family and be successful in business without having to compromise. The business has grown, we’ve expanded staff and there is no barrier between us and the future.”
While the American Express OPEN study shows impressive growth rates that should be encouraging to prospective female entrepreneurs ready to make that leap, women-owned firms still only contribute four percent (or $1.3 trillion) of total business revenues in the U.S. and employ approximately six percent (7.7 million people) of the total employment population. On top of differences in rates of employment and revenue, there exists a significant disparity in confidence as well. The Global Entrepreneurship Monitor states that 47.7 percent of women versus 62.1 percent of men believe they are capable of starting and running a business. On the upside, women-focused networking, mentorship, and access to capital organizations like Women 2.0, the Pipeline Fellowship and Ladies Who Launch are working to boost female entrepreneurs both financially and professionally.