According to the National Association of Women Business Owners, there were 6.5 million women entrepreneurs in the United States in the late 1990s. In addition, many analysts predict that more than 50 percent of all self-employed people in the United States will be women in the first years of the twenty-first century. These statistics reflect a sea change in American conceptions of gender roles and abilities over the past half-century.

Women have owned and operated businesses for decades, but they were rarely recognized or given credit for their efforts. Often women entrepreneurs were "invisible" as they worked side by side with their husbands, and many only stepped into leadership positions when their husbands died. But a variety of factors have combined in recent years to contribute to the visibility and numbers of women who start their own businesses. As more women joined the work force, for example, they gained the professional and managerial skills and experience they would need as entrepreneurs. In addition, many women felt as if they were discriminated against in large companies, which provided them with an incentive to be their own bosses. Some women also have found entrepreneurship to be an ideal way to juggle the competing demands of career and family, while some single mothers have started businesses as a way out of poverty.

Although the small businesses owned by women have traditionally focused on fashion, food, and other service sectors, in recent years women entrepreneurs have been moving rapidly into manufacturing, construction, and other industrial fields. Women business owners still face greater difficulties in gaining access to commercial credit and bidding on government contracts than do their male colleagues, and pockets of resistance to women entrepreneurs remain strong in some industries and geographic regions. But millions of successful businesses launched and managed by women now dot America's business landscape, each a testament to the legitimacy of the aspirations and talents of the woman entrepreneur.


Many studies indicate that women start businesses for fundamentally different reasons than their male counterparts. While men start businesses primarily for growth opportunities and profit potential, women most often found businesses in order to meet personal goals, such as gaining feelings of achievement and accomplishment. In many instances, women consider financial success as an external confirmation of their ability rather than as a primary goal or motivation to start a business, although millions of women entrepreneurs will grant that financial profitability is important in its own right.

Women also tend to start businesses about ten years later then men, on average. Motherhood, lack of management experience, and traditional socialization have all been cited as reasons for delayed entry into entreprneurial careers. In fact, over 30 percent of women entrepreneurs reported that they started a business due to some traumatic event, such as divorce, discrimination due to pregnancy or the corporate glass ceiling, the health of a family member, or economic reasons such as a layoff. But a new talent pool of women entrepreneurs is forming today, as more women opt to leave corporate America to chart their own destinies. Many of these women have developed financial expertise and bring experience in manufacturing or nontraditional fields. As a result, the concentration of women business owners in the retail and service sectors—and in traditional industries such as cosmetics, food, fashion, and personal care—is slowly changing.


One of the main problems facing women entrepreneurs is obtaining financing. In the early 1990s, study after study confirmed that women business owners did not receive equal treatment at financial institutions. Over one half of women business owners believed that they faced gender discrimination when dealing with a loan officer. And 67 percent of women business owners reported difficulty in working with financial institutions. But this figure had declined by 15 percent by 1997, according to a study conducted by the National Association of Women Business Owners (NAWBO). "There's been improvement on both sides," said Julie Weeks, research director for NAWBO. "Not only have women business owners become more savvy about these matters and boast businesses that are more stable and mature, but the banking community has experienced an awakening. They've made tremendous efforts to reach out to women business owners and have taken a proactive role in making the relationship better."

Part of the improvement can be attributed to the success of the Small Business Administration's Women's Prequalification Pilot Loan Program. Introduced in 1994 and expanded nationwide in 1997, the program helps women seeking loans of under $250,000 to complete their loan applications, and also provides an SBA guarantee for repayment of their loans. Women are prequalified based on their character, credit rating, and ability to repay the loan from future business earnings, rather than on collateral. The prequalification statement from the SBA enables the women to obtain funding much more readily.

Another area in which women business owners have been historically shortchanged is procurement, or the selling of their goods and services to city, state, and federal governments. In the past, fewer than 5 percent of the women-owned firms in the United States were certified to do business with their state government and only 1.5 percent of the billions of dollars in federal contracts went to women-owned firms. Some efforts have been undertaken to rectify this situation. If a company is 51 percent owned and controlled by a woman, it can obtain certification and bid on government contracts. In addition, many government agencies at the state and federal levels have created set-aside programs which specifically help women-owned businesses in the bidding process. Nonetheless, the percentage of government contracts going to women-owned firms remained a meager 2.5 percent as recently as 2000.


A number of resources now exist to support women entrepreneurs. In 1988, Congress authorized the Small Business Administration Office of Women's Business Ownership, which created a "Low-Doc" loan program which makes it easier for women entrepreneurs to obtain SBA financing. The SBA also has established a Women's Network for Entrepreneurial Training (WNET) which links women mentors with protegees. Small Business Development Centers (SBDC) are also co-sponsored by the SBA and operate in every state. They offer free and confidential counseling to anyone interested in starting a small business. In addition, many states now have a Women's Business Advocate to promote women entrepreneurs within the state. These advocates are represented by an organization, the National Association of Women Business Advocates.

A number of trade associations also represent women entrepreneurs. The National Association of Women Business Owners is the largest group throughout the country. There are also some smaller regional groups, which can be located through the Yellow Pages or local chambers of commerce. The American Business Women's Association provides leadership, networking, and educational support. The National Association of Female Executives makes women aware of the need to plan for career and financial success. As women-owned businesses continue to create jobs and become an increasingly important factor in the American economy, the resources to support them will continue to grow as well.


Duff, Carolyn. When Women Work Together. Conari Press, 1993.

Eckert, Toby. "Female-Owned Firms Growing at Fast Clip." Indianapolis Business Journal. September 16, 1996.

Godfrey, Joline. Our Wildest Dreams . Harper Business, 1992.

Maitland, Alison. "From Female Upstarts to Start-Ups: Women Entrepreneurs." Financial Times. October 19, 2000.

Pinson, Linda, and Jerry Jinnett. Women Entrepreneurs, 33 Personal Stories of Success . Upstart Publishing, 1992.

Silver, A. David. Enterprising Women. Amacom, 1994.

Zuckerman, Laurie. On Your Own: A Women's Guide to Building a Business. Upstart Publishing, 1990.

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