2023 Women in Business Trends
A look at women-owned small businesses in 2023
Each year, Guidant reaches out to the hardworking small business owners across the country to gain insights into their experiences, challenges, and future plans. We also acknowledge the critical role businesses owned by women-owned businesses play in the economy. In this segment of our Small Business Trends report, we’ll provide trends, insights, and experiences reported by entrepreneurs of color this year.
Supporting the growth and success of underserved communities is a priority for Guidant, including businesses owned by women and entrepreneurs of color. In this segment, our data will highlight growing trends and challenges among women-owned businesses.
Who are Women Business Owners in 2023?
Our main study reveals an ongoing gender disparity among small business owners. Women were only represented by 25 percent of all small business owners — far lower than their male counterparts who held 75 percent of businesses. Although there has been slight progress from last year when it comes to women-owned businesses, the gender gap in small business remains significant.
The National Women’s Business Council (NWBC) Annual Report for 2022 paints a picture of progress: women-owned businesses have experienced remarkable growth in recent years. Between 2012 and 2019, women-owned employer firms saw an impressive 16.7 percent increase compared to only 5.2 percent among companies owned by men — while gross receipts within that same period rocketed 51.9 percent. What’s more, the 10 million+ workers employed by women-owned businesses increased by 28 percent, reflecting more expansion over male counterparts who experienced a 10.8 percent rise. All signs point to continued success as gender equality takes center stage across the small business landscape nationwide.
But who are women business owners in 2023 — and what drives them to pursue entrepreneurship?
According to our study, women business owners are driven by the same desire for independence, creativity, and flexibility as the overall group in our main study. The majority of respondents (27%) cited wanting the freedom and autonomy associated with being their own boss, while 22 percent shared a dissatisfaction with corporate America — the two strongest motivators for becoming a business owner.
Interestingly, women entrepreneurs were 20 percent more likely than men to launch a business based on their passions. Fifteen percent of respondents were driven into entrepreneurship to pursue their passions — followed closely by those who opened shop because they saw opportunity or weren’t ready to retire just yet.
Our main study clearly indicated that most respondents chose entrepreneurship because they favored being their own bosses and were largely dissatisfied with traditional jobs. However, women business owners showed an even greater incentive for realizing personal aspirations.
The majority of women business owners belong to Generation X (55.7%) and nearly a third belong to the Boomer (29.9%) generation.
Out of all respondents surveyed, millennial women entrepreneurs are demonstrating impressive success rates, outpacing their male counterparts by 36 percent.
In spite of the long-standing generation gap, this year’s study shows a rising trend in millennial business ownership — especially among women entrepreneurs.
Women of Color in Business
While businesses owned by women tend to remain predominantly “White or Caucasian” (78.4%), our study this year shows a positive shift in businesses owned by women of color. In particular, women business owners who identify as “Black or African-American” increased by 33 percent from 2022 to 2023. Women entrepreneurs who identify as “Hispanic, Latino or Spanish Origin” and “Asian or Asian-American” also both doubled since last year. While there is still much progress to be made in expanding inclusion and diversity at all levels of business ownership, these notable increases indicate an encouraging movement toward equal opportunity among women from various backgrounds within small business ownership.
This year’s study demonstrates a balanced distribution of political views among women business owners, showcasing the diversity of ideologies among women-owned businesses. Among respondents surveyed, affiliations are divided across three political leanings. Women business owners who affiliate as Republican (33%), Democrat (30%), and Independent (33%) each made up roughly 30 percent. The remaining four percent identified as “Libertarian.”
While women-owned businesses were more likely to align with a major political party, we continue to see a growing trend of small business owners embracing independence and moving away from traditional political parties — especially among women entrepreneurs. Women business owners who are unaffiliated with any leading political party showed a 15x increase, jumping from roughly three percent to 33 percent within a year.
What are Small Businesses Like in 2023?
Profitability and Plans for Growth
The majority of women-owned businesses showed profitability this year (60%) — despite many being newly-fledged businesses facing unique economic challenges. Forty percent of surveyed respondents reported unprofitability. However, it should be noted that small businesses are typically unprofitable in the first two to three years of opening.
Regardless of profitability, women business owners plan on investing for growth this year in three main areas. Most plan to increase staffing (30%), invest in digital marketing (18%), and expand or remodel their businesses (17%) this year. Additionally, 11 percent of respondents aim to invest in traditional marketing. This data is consistent with last year’s data, showing business owners continue to value the power of marketing and business expansion.
Recruitment and Retention Challenges
Across the board, recruitment and retention continues to be the biggest challenge for small business owners. Women business owners described the hiring process as “very difficult” (24%) and “somewhat difficult” (16%) compared to previous years. However, many also reported the hiring process as “the same” (22%) as other years. Five percent felt that recruitment was “somewhat easy” and only three percent experienced a “very easy” hiring process.
When asked about the reasons behind this difficulty, most women business owners reported a low number of applicants (29%), a lack of needed work experience (18%), or a lack of the right workplace soft skills (e.g. communication, etc; 11%). Competition from other employers was also a major factor at 14 percent, as was an inability to offer competitive salaries or benefits (10%).
These factors are consistent with our main study, demonstrating a theme of recruitment and retention hurdles for small businesses across America. This finding is to be expected as small businesses are typically unable to provide the same level of pay and benefits that bigger corporations can offer.
To address retention and recruitment issues, the majority of surveyed respondents plan to increase compensation (32%), improve retention efforts for current employees (19%), and expand recruitment advertising efforts (11%).Despite these ongoing challenges, our study illustrates a marked improvement from last year — with 43 percent fewer women business owners finding the hiring process difficult. These numbers show a continued progress in recruitment efforts.
Embracing Economic Uncertainty
In today’s unpredictable economy, many small business owners are facing a significant level of uncertainty. The survey results revealed a notable degree of skepticism among women business owners regarding the current economic landscape — with a majority expressing a lack of confidence in small business prospects.
Among our surveyed respondents, over half of women entrepreneurs feel “somewhat unconfident” (38%) and “very unconfident” (17%) about small business in today’s economy. Notably, women business owners were 21 percent more likely to lack confidence compared to their male counterparts.
This data suggests that the current economic climate — paired with the unique challenges women in business face — is having a significant impact on women-owned businesses.
A majority of surveyed respondents expressed uncertainty (45%) or concern (43%) about the likelihood of a prolonged economic recession. The remaining 12 percent reported feeling confident about the future economy.
In the face of ongoing economic challenges, most women business owners are also embracing the current economic climate and remain optimistic about their ability to survive and thrive.
A third of respondents continue to feel either “very confident” (29%) and “somewhat confident” (4%) about their business prospects.
Additionally, a majority of women entrepreneurs expect their businesses to survive (67%), while only six percent do not. The remaining 27 percent felt unsure. These numbers demonstrate that many women in business are determined to succeed and are taking a proactive approach to managing uncertainty.
Women entrepreneurs are embracing various business strategies, such as increasing staff (30%), investing in marketing (29%), and expanding or remodeling their businesses (17%) to position their businesses for success.
Prosperity Amidst Uncertainty
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