It was recently Small Business Week in the U.S. With that focus on small businesses, I’m sharing updated information on small businesses, women-owned businesses, and mom-owned businesses to help you understand the impact of this economic engine in the U.S. With the pandemic and Great Realignment (it was more than a Great Resignation) as a backdrop, I was curious to see the impact on small businesses.
This time I was especially curious about the effect of 1.4 million working mothers leaving the workforce during the pandemic, many of whom have yet to return. Would they turn to entrepreneurship?
Why write about this?
Why am I writing about mom-owned businesses on a blog about work-life balance? For starters, this is what I live every day as an entrepreneur with two growing businesses. Mom entrepreneurs are also important in my research. About thirty-eight percent of the moms I interviewed for my two books own a business, and I sprinkled their stories throughout my books.
What motivates moms to start a business might provide insights into working moms in the workforce, helping employers understand what they’re doing right and where they might be missing the mark. In my research, I saw that some working moms left the workforce because they couldn’t find an employer that met their needs. This reality hasn’t changed for many working mothers who have chosen (or are choosing) to start a business as a result of the pandemic. (More below)
As a bonus, learning about the impact of mom-owned businesses might be the perfect inspiration to nudge a working mom like you or someone you know to start a business. Entrepreneurship can be scary and lonely. Seeing yourself reflected in others and knowing what’s possible might be what you need to take the initiative to start the business you’ve been thinking about.
Small Business Statistics
Small business is near and dear to my heart and research. Small businesses are also crucial to the U.S. workforce and economy. There are 33.2 million (up from 32.5 in 2021) small businesses or about 99.9 percent of U.S. businesses, according to a 2023 report from the Small Business Administration.1 This percentage seems to have remained consistent over the past few years. Those small businesses employ roughly 61.7 million (up from 61.2 million in last year’s report).1 Small businesses provide jobs to 46.4 percent of U.S. employees in the private workforce, a slight drop since 2021).1
Here’s another impressive statistic: in the past 25 years, small businesses have created just shy of 2 of every 3 jobs. Pretty impressive, right? 3
Women-Owned Business Statistics
Women own about 43 percent of small businesses in the U.S., which is about 14 million businesses.1 (This includes fully and partially owned by women.) When you combine all the women-owned businesses, they are generating about $1.9 trillion per year.4 That is a lot of money supporting the economy! (Side note: there are differences in statistics on the actual percentage of small businesses that are full-owned by women.)
There are conflicting data points on the growth of women-owned businesses during the pandemic. I’ll share two here:
An article on the CFA Institute website talks about the number of women-owned businesses is growing.5 Barbara Stewart, CFA, researcher, and author on women and finance issues uncovered some interesting statistics and qualitative data on women-owned businesses during the pandemic based on printing and design businesses in late 2020. Orders for printing (e.g., business cards, brochures, etc.) are largely coming from what are likely new women-owned businesses. (Think about it, you’re often new, growing, or moving into a new area when you want new stuff printed.) For some printers, as much as 78 percent of customers are female business owners paying for services.5
The Kauffman Foundation paints a different picture. Its research shows that women started businesses at a lower rate than men in 2021.6 “The rate of new entrepreneurs was 0.28 percent (28 out of every 10,000) among women and 0.45 percent (45 out of every 10,000) among men.”6
A Deeper Look at Women-owned Business
Wondering why women started new businesses during the pandemic? Gusto, a payroll and employee benefits company, surveyed women business owners to ask this. It’s no surprise that the most common reason women surveyed started a business during the pandemic was to have more flexibility.7
- 58% of women want more control over their work schedule
- 24% wanted to start a business that they could pass on to their families
- 37% were looking to improve their financial opportunities
- 19% lost their jobs
- 9% didn’t have any other job opportunities
Wondering what types of businesses are started by women? According to American Express’s research, women tend to see a gap in the marketplace and figure out a way to meet that need.3 Women-owned businesses are often in retail or services. The top 3 categories where we see women-owned businesses are services (e.g., nail salons or pet care), healthcare and social assistance (e.g., child day care or home health services), and professional/scientific/technical services (e.g., lawyers, bookkeepers, and consultants).3
The challenge here is that these, especially the other services or healthcare categories and social assistance services can have revenue that is a fraction of the average revenue for a WBE.4 Essentially, these might be easier to create, but they aren’t big moneymakers. About 88 percent of all women-owned businesses generate less than $100,000.8
And in many situations, they are a side gig, which could impact revenue potential. Granted, a 6-figure income might not be the point. Even with these reduced hours and revenue, these part-time businesses still might bring in additional income above and beyond what a woman makes in a full-time role at an employer.
Mom-Owned Business Statistics (aka Mompreneur Statistics)
(This part is why I originally started sharing this information several years ago. These statistics are hard to find, so I wanted to collect the information and put it in one place.)
If you’re a mom and you’re wondering about mom-owned business statistics or the impact of mompreneurs, look no further. Several years ago, an article in the now-shuttered Working Mother magazine estimated that 1 in 3 women-owned businesses is owned by a mom. That number is pretty amazing, translating to almost 4.7 million businesses. Yay for mom entrepreneurs!!!
A recent Shopify study shared that mom entrepreneurs might be on the rise. Of the 1500+ working parents who were polled, more than 60 percent of mothers were interested in supplementing their income through entrepreneurship.9
Effects of the Pandemic on Small Business
Considering small businesses represent more than 99 percent of U.S. businesses and employ almost half of all private employees, their role in our economy and our lives is incredibly important. It would be hard to write about small business in 2023 without acknowledging the effects of Covid-19. Realistically, it will be a while before we truly understand the impact of the pandemic on small businesses. The number of small businesses that permanently shuttered because of the pandemic is currently unknown, but we’ll be feeling the effect of this on the economy and in our communities now and long term.
During the recession, small businesses laid off 9.1 million employees (a lot of these layoffs happened early in the pandemic).3 Since the recession ended, jobs have rebounded within the small business sector. In the four quarters following the recession, small businesses created 5.5 million jobs (and they’re still adding jobs).3 If you do the math, that’s about 60 percent of a bounce-back for job creation.3
Did something in this article surprise you? Interested in additional information? Do you have thoughts on the impact of small businesses in your hometown or the economy in general? I’d love to hear from you in the comments.
Curious about the impact of working mothers as employees in the workforce? Check out my article, The Importance of Working Mothers in the Workforce, for some eye-opening information to help you understand why we need to support working moms looking to move to new opportunities as part of the Great Realignment (it’s not simply a Great Resignation) or trying to come back to the workforce after leaving during the pandemic.
Interested in starting a business, but don’t know where to begin? The Mompowerment Guide to Work-life Balance can help you work smarter so you have more time for things like starting a side gig that becomes your main focus down the road. Grab your copy on Amazon today! (As an Amazon Associate I earn from qualifying purchases.)
1 https://advocacy.sba.gov/2023/03/07/frequently-asked-questions-about-small-business-2023/
2 2020 Small Business Economic Profile States Territories Report
3 Small Business Job Creation Fact Sheet Apr 2022
4 2019 State of Women-Owned Business Report commissioned by American Express
8 2018 State of Women-Owned Business Report commissioned by American Express
9 https://www.shopify.com/blog/mom-entrepreneurs
