The number of women-owned businesses in Tennessee has grown faster than the national average over a 16-year period, according to a recent report commissioned by American Express OPEN.
Tennessee ranks No. 14 in the nation in the growth of the number of women-owned businesses from 1997 to 2013, according to The 2013 State of Women-Owned Businesses Report. The number of women-owned businesses in Tennessee grew 65 percent to an estimated 164,600 firms employing 117,800 over the report’s 16-year study period. Revenue at women-owned firms in Tennessee also increased 71.5 percent during the study period.
“That’s well above the national average,” said Julie Weeks, American Express Open research adviser. “The data show there is good new firm foundation and that they are doing well economically.”
Nationally, the number of women-owned businesses has grown by 59 percent since 1997. The five states with the fastest-growth in the number of women-owned firms over the past 16 years are: Georgia (up 112 percent), Texas (93 percent), North Carolina (91 percent), Louisiana (94 percent) and Nevada (84 percent).
The report also showed increasing national clout in the number of firms owned by minorities. In 1997, there were just less than 1 million firms owned by minorities. That figure has soared to an estimated 2.7 million firms as of 2013, now comprising one in three women-owned firms.
Within those 2.7 million firms, an estimated 1.1 million are owned by African-American women, 944,000 are Latina-owned, 620,300 are Asian-owned, and 132,600 are Native American-owned.
Weeks said she was stuck by the increasing industry diversity in women-owned businesses, from construction to finance.
“One of the biggest trends we’ve noticed is diversification, and the types of businesses women operate,” she said. “In every industry, you can now find women-owned businesses. Thirty-nine years ago women were much more clustered in certain industries.”
Health care and social assistance remain the industries with the highest concentration of women-owned firms – a little more than half of all firms in those industries are owned by women. About 45.1 percent of all education firms also are owned by women. But in some industries, women still have ground to make up. In construction, women own just 6.7 percent of all firms within the industry, and just 11.4 percent of all firms in transportation and warehousing.
While firms owned by women have increased in the past 16 years, they still lag behind all firms in terms of revenue and employment. According to the U.S. Census Bureau’s November 2012 report, women now own about 30 percent of all businesses in the nation.
While the number of firms has grown, most still struggle to generate revenue that is on par with their male counterparts. About 68 percent of women-owned businesses earned less than $25,000, and less than 2 percent made more than $1 million, according to a 2012 National Women’s Business Council report.
In Tennessee, women-owned businesses also struggled on the hiring front. While the number of women-owned businesses grew, and those same firms increased their revenue – they did not hire more workers.
Tennessee women-owned firms ranked near the bottom of the pack at No. 48 in terms of overall employment growth at women-owned firms. Employment at Tennessee women-owned firms declined by 17.1 percent during the 16-year study period. Weeks said that likely mirrors overall hiring trends in Tennessee.