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Women and Minority-Owned Businesses Grow Rapidly But Lag Behind in Revenue Shares

Throughout the decades, women and minorities have made considerable advancements in entrepreneurship and ownership in a variety of business ventures.1 Amongst all ethnicities, women-owned businesses are growing more quickly than male-owned businesses.2 However, their revenue shares lag vastly in comparison to that of their male or non-minority counterparts.3 According to research by the Pew Research Center, which was based on data from the Survey of Business Owner’s by the Census Bureau, only 11.3% of the more than $14 trillion in total revenue in 2012 was attributed to the aggregated sales of all women-owned firms in the nation.4 On the other hand, male-owned firms owned 79.2% of total classifiable sales.5 Minority- owned businesses fell further behind at a staggering $1.6 trillion or 10.9% of all classifiable revenues.6

According to Amanda Brown, Executive Director of the National Women’s Business Council (NWBC), women continue to lack access to the capital and assets essential to start and foster business growth.7.   Women are launching businesses with six times as little capital as their male counterparts.8 This “unequal playing field” presents women-owned businesses with distinctive barriers to obtaining necessary capital.9 Enterprise development is restricted by undercapitalization, as it limits business investments in crucial assets such as “equipment, employees, or inventory necessary for growth; the business does not have the funds to meet market demands.”10

Furthermore, “[i]nability to obtain business credit is higher among diverse segments than the general population of owners. Among those who indicated they needed credit, African American owners, in particular, say they were not able to get all the credit they needed.”11  Crowd funding greatly affects these disparities, by working as an equalizer for women against their male counterparts and provide the capital crucial for business growth.12. The data from the study on race and ethnicity by Wells Fargo and Gallup further supports the belief that capital is difficult to obtain.13 The study utilized qualitative and quantitative data, and research was conducted with African American, Hispanic, and Asian small business owners.14 According to the survey, although loans were the primary source of capital to launch business ventures with personal credit cards and gifts ranking second and third respectively, only 42 percent of African Americans indicated borrowing money. The study went on to state that:

[O]nly 13 percent of African American business owners report that they were able to obtain the credit that they needed. Higher percentages of Asian and Hispanic business owners were able to obtain credit (24 percent and 20 percent, respectively), but even these figures are low. Overall, 14 percent of the respondents said they had been declined credit in the past, and the impact of the denial was more significant among African – Americans – 64 percent said they did not apply for credit again, compared to 48 percent of Asians and 46 percent of Hispanics.15

When questioned about the depth of their knowledge and awareness of the Small Business Administration’s loan programs available to small business owners, a relatively small percentage of small business owners express high levels of familiarity: “[12%] of Hispanic, 15% of African America, and 18% of Asian business owners say they are extremely or very familiar with such programs. Differences are not statistically significant and such levels of familiarity are similar to what business owners in the general population (12%) say.”16).

Hence, the gender and minority inequalities must be rectified in order for economic advancement to affect areas and populations in most need: “All businesses should have the opportunity to grow and thrive-and this is particularly pressing as minorities and women will increasingly represent a larger share of businesses in the U.S.”17 Other government organizations are providing federal funding to support women, and the increase in the number of women being supported by angel investors provides a step in the right direction to overcome these challenges.18.

  1. Tanya Basu, Women and Minority-Owned Small Businesses Still Struggle, Report Shows, Time (Sept. 1, 2015),

  2. Women-Owned Businesses Lag Behind in Revenue, Grameen America (Sept. 8, 2015, 9:39 AM), 

  3. Drew Desilver, Businesses Owned by Women, Minorities Lag in Revenue Share, Pew Research Center (Sept. 1, 2015), 

  4. Id. 

  5. Id. 

  6. Id. 

  7. Despite a Rise in Female Minority-Owned Businesses, Revenue Is Lagging, Huffpost Live (Sept. 4, 2015), 

  8. Id. 

  9. Id

  10. Undercapitalization as a Contributing Factor to Business Failure for Women Entrepreneurs, National Women’s Business Council,

  11. Gallup, Inc., Gallup: Small Business Diverse Segments Lending Study 4 (2015), 

  12. Despite a Rise in Female Minority-Owned Businesses, Revenue is Lagging, supra note 7. 

  13. Sadaf Knight, African American Business Owners Face Greatest Barriers in Accessing Credit, The Support Center (Jun. 2, 2015), 

  14. Id

  15. Id. 

  16. Gallup, Inc., supra note 11 at 17 (2015 

  17. Knight, supra note 13. Businesses such as the Support Center have initiated a new entrepreneurial training partnership structured specifically to address the needs of businesses owned by individuals of color. ((Id

  18. Despite a Rise in Female Minority-Owned Businesses, Revenue Is Lagging, supra note 7.