National Association of Women Business Owners Reports Nearly 92% of Women-Owned Businesses are ‘Microbusinesses’
Microbusinesses, or businesses with 25 or fewer employees, provide a huge impact to family incomes, especially in underserved communities.
Earlier this year, the National Association of Women Business Owners (NAWBO) and ADP released the results of a survey of women business owners. Nearly 92% of women-owned businesses are microbusinesses: or businesses with fewer than 25 employees. And while the businesses may be small, they provide the lion’s share of the family income, with 63% of business owners providing 50-100% of the household income. By giving these businesses the resources to grow, NAWBO says communities will have a path toward increasing wealth in underserved populations.
“Women business owners are the drivers of our nation’s economy and the leaders in our communities,” said Karen Bennetts, NAWBO national board chair. “By supporting women business owners and providing them with the necessary resources, we are building the bridge to wealth creation, allowing them to grow and scale their businesses. We appreciate the support of great companies like ADP who recognize this vital section of the American economy.”
“ADP is proud of our partnership and of supporting women-owned businesses and organizations, like NAWBO, that help propel women entrepreneurs into economic, social and political spheres of power worldwide. Women-owned businesses create a huge impact on our economy and we recognize the importance of supporting and partnering with organizations like NAWBO so that we can help further their opportunities for success,” said Laci Buzzelli, senior vice president of sales for ADP Small Business Services.
According to the 2021 Annual Business Survey (ABS), which covers the reference year 2020, women owned 1.24 million or 21.4% of employer firms in the U.S. Women-owned businesses account for $1.9 trillion in receipts, 10.9 million employees and $432.1 billion in annual payroll.
The survey identified five primary challenges: hiring, financing, access to growth resources, employee experience and access to payroll and HR tools. Hiring continues to remain a challenge for NAWBO members. Of those who said it was harder to hire than last year, respondents noted that finding people with the right talent and skills remains an issue and note that they are now increasingly losing top candidates to competitors.
Most small business owners are using their personal savings to support business operations - and use of savings is up from last year (especially among the smallest/sole prop companies). Around 10% of respondents used an SBA loan last year. And although NAWBO member companies have been in business many years, fewer than a third have a credit rating.
NAWBO develops programs that help navigate women entrepreneurs through the various stages of their business growth. To learn more, please visit nawbo.org.