Financial Facts About Women-Owned Business

This is part 3 in a series about the challenges women face when running a business.

Part 1 | Part 2 | Part 3 | Part 4

Check out a summary of the 25 challenges & opportunities: Facts About Women-Owned Businesses

challenges of women-owned businesses
What is unique about female business owners?

Check out a summary of the 25 challenges & opportunities: Facts About Women-Owned Businesses

13. Women-Owned Companies Have Lower Revenue

The average business owned by a woman generates half of the total average annual sales ($4.6M) of those owned by a male ($9.1M).

This correlates with a 2018 study showing 50% fewer total sales in women-owned companies ($1.6M in sales), compared to male-owned ($3.2M).

(sources: Women Business Ownership in America On the Rise and SMB Insights The Business Journals “Do Women Business Owners Have It All?” 2015

Majority of Female-Owned Firms Generate Under $50,000

However, “average” sales numbers are misleading, and they do not necessarily show actual financial success. The vast majority of female-owned businesses generate a very low level of annual revenue. According to a report by the National Women’s Business Council,

  • Close to half (43.7%) generate less than $10,000 a year
  • Over three-quarters (80.6%) generate under $50,000 a year
  • 88.1% generate under $100,000 a year

Of the 12% of owners who bring in over $100,000 in annual revenue, half (6.2%) make over $250,000 and just 1.9% make $1 million or more.

NWBC, National Women's Business Council women-owned business size
Data from National Women’s Business Council: revenue and # of employees at women-owned companies

[image: Annual Women-Owned Business Study 2022]

These figures show gross sales and do not include expenses. So in reality, the take-home pay for most female business owners is extremely low.

An extensive study of 100,000 companies revealed that female-owned businesses had:

  • a nearly 4% decrease in annual revenue in 2021,
  • a 3% increase in operating expenses, and
  • a huge drop (26% year over year) in Average Earnings—which is total revenue before deducting any expenses.

By comparison, male-owned businesses had:

  • a 2% drop in Annual Revenue,
  • a 1% increase in Operating Expenses, and
  • a 12% decrease in Average Earnings in 2021.

(sources: 2021 National Women’s Business Council Annual Report, Annual Women-Owned Business Study 2022, and Biz2Credit Women-Owned Business Study 2022)

Female-Owned Firms Have 1/5 the Sales Power of Male-Owned

A national analysis by the U.S. Census Bureau in 2012 shows that of the 27.6 million businesses in the U.S. that generated a total of $33.54 T in sales, this represents the following:

  • 9.9 million female-owned firms generate 4.2% of total U.S. business sales ($1.42 T)
  • 14.8 million male-owned firms generate 28.2% of total sales ($9.47 T)
  • 2.5 million equally male/female-owned firms generate 3.2% of total sales ($1.08 T)
  • 447 thousand publicly-held firms generate the remaining 64.3% of sales ($21.57 T).

(source: U.S. Census Bureau Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race 2012

Firms by Gender Ownership and Total Sales (U.S. Census, 2012)

 Annual Sales% of Sales# of firms% of firmsRevenue to Firm Ratio
All Firms$33,536,848,821,000 27,626,360 firms100%1:1 (100%)
Female-Owned Firms$1,419,834,295,0004.2%9,878,397 firms35.8%1:9 (11.7%)
Male-Owned Firms$9,466,039,188,00028.2%14,844,597 firms53.7%1:2 (52.5%)
Equal M/F-Owned Firms$1,078,204,389,0003.2%2,456,386 firms8.9%1:3 (36%)
Publicly Held Firms$21,572,770,949,00064.3%446,980 firms1.7%37:1 (378%)

[table source: U.S. Census Bureau Statistics for All US Firms by Gender, 2012]

This data reveals that female-owned firms make up nearly 36% of all firms but only generate 4.2% of all sales, giving them a revenue-to-firm ratio of 1:9. Over half of firms are male-owned and generate 28.2% of sales, giving them a revenue to firm ratio of 1:2. Of the nearly 9% of companies with equal male and female owners, sales are 3.2%, giving them a 1:3 ratio. Publicly held firms make up less than 2% of firms but generate the bulk of all sales (64.3%), with a 37:1 ratio.

Based on this data, female-owned firms have around one-fifth the sales power of male-owned firms.

(source: U.S. Census Bureau Statistics for All US Firms by Gender, 2012)

payment method, card reader, point of sale, female business owner
Convenient payment methods increase the likelihood of serving a variety of customer types

Lower Revenue Produced Compared to Male-Owned

The median revenue for female-owned small businesses in the first year ($50,000) was 34% lower than in those owned by male owners (more than $75,000). By the second year, revenue increased to $59,000 for women and $91,000 for men. And by the 4th year, companies owned by a woman had median revenues of nearly $68,000, compared to revenues of $104,000 in those owned by a man.

Even when analyzed across the entire range of first-year revenues, female-owned firms still generate 40% less than male-owned firms.

(source: Gender, Age, and Small Business Financial Outcomes

Over 90% of Women-Owned Companies are Solo Businesses

While the U.S. Census Bureau’s Annual Business Survey (ABS) provides information on female-owned employer firms, it wasn’t until 2020 that the Nonemployer Statistics by Demographics (NES-D) provided insights about companies with no paid employees—also called “non-employer,” “single-person business,” “one-person business,” and “solo business”—commonly categorized as sole proprietorships or as an individual owner of a single-member LLC.

Note: Census numbers do not count C-Corporations as Nonemployer Firms, per the NWBC.

(sources: Single Member Limited Liability Companies | Internal Revenue Service and Introducing the New Nonemployer Statistics by Demographics Series (NES-D)

This is an important distinction since 90.3% of all women-owned businesses are non-employer firms (per the NWBC). Women-owned firms represent 21% of all non-employer firms, which are primarily men-owned and equally owned.

(sources: National Women’s Business Council 2021 Annual Report and Women-owned employer and nonemployer firm data FY 2017 – Dataset – U.S. Small Business Administration (SBA)

Non-Employer Companies Generate Low Revenue Regardless of Gender

In general, non-employer companies generate much lower annual revenue than employer firms—especially in companies owned by women.

According to the U.S. Small Business Administration (SBA), Non-employer Firms make up  81% of all companies. While the split of Female-Owned versus Male- Owned Firms is similar (nearly 42% of Female to 58% of Male), Employer Firms are more likely to be Male-Owned (over 80%).

Note: “Male-Owned” also includes “Equal Female and Male Owned” where there is 50-50 ownership. “Female Owned” indicates ownership of 51% or more, per SBA’s Woman-Owned Small Business program, per the NWBC.

 Total # of Firms% of All Firms# of Female Owned Firms% of Firms# of Male & Equal Owned Firms% of Firms
Employer Firms5,744,64418.5% of All Firms1,134,549 4,610,095 
    19.7% of All Employer Firms 80.3% of All Employer Firms
Non-employer Firms25,310,00081.5% of All Firms10,551,100 14,758,900 
    41.7% of All Non-employer Firms 58.3% of All Non-employer Firms
All Firms31,054,644(100%)11,685,64937.6% of All Firms19,368,99462.4% of All Firms

            [table source: Women-owned employer and nonemployer firm data FY 2017 – Dataset – U.S. Small Business Administration (SBA)

Some observations based on the SBA Women-Owned Employer and Non-employer data (see Appendix, below):

Employer Firms (with at least 1 employee) are much more likely to generate between $100,000 and over $1 million in annual revenue.

  • Over $1M in annual revenue is possible for 19% of all Female-Owned Employer firms and 29% of Male-Owned Employer firms.
  • Nearly 82% of all Male-Owned Employer firms and over 75% of Female-Owned Employer firms generate revenues of $100K to over $1M a year.

Non-employer firms have an extremely high concentration of very low revenue, especially for women.

  • Nearly half (48%) of all Non-employer firms owned by Females bring in less than $10K a year, compared to a third (36%) of Male-Owned.
  • Non-employer firms that generate less than $50K a year total 72% of Male-Owned firms and nearly 88% of Female-Owned.
  • “Unicorn” Non-employer companies (with revenue over $1M) are very unlikely, but this status is achieved by 2.4% of Male-Owned firms and half of one percent of Female Owned firms (around 35,000 out of 14 million companies).

(source: Women-owned employer and nonemployer firm data FY 2017 – Dataset – U.S. Small Business Administration (SBA); also see Appendix, below)

Non-employer Firms Owned by Males Make More Money

The graphic below, provided by the U.S. Census Bureau, displays the significant difference between the distribution of Female-Owned to Male-Owned Non-employer companies (41.7% versus 55%) and the total business receipts collected (24.2% by Women-Owned, and 66% by Male-Owned).

Note that the term “receipts” refers to cash received by a company without adjusting for expenses or deductions, including loans, tax refunds, donations, interest, and cash payments. The term “revenues” includes a company’s total earnings from selling merchandise or performing services (as reported on their income statement), even if the money is not collected upfront.

US Census Female Owner vs Male Owner Owner vs Nonemployer Receipt Business Cash
U.S. Census comparison of Nonemployer and Employer business receipts (cash received) for Female vs. Male Owners

[image: U.S. Census Demographic Data on Nonemployer Businesses 2020]

By contrast, Male-Owned and Equally Male/Female-Owned companies generate a much higher percentage of Receipts than do Female-Owned companies.

(source: U.S. Census Demographic Data on Nonemployer Businesses 2020)

Increase in Minority-Owned Non-employer Businesses

Another important point is a rapid rise in Non-employer companies by minority owners.

  • Non-employer Firms by Minority Owners are growing at a rate of 16.7%, which is four times faster than by non-minority owners.
  • Nearly 45% of these Minority Non-employer Owners are Hispanic, over 36% are Black or African-American, and 24% are Asian.
  • Of Minority-Owned Non-employers 46% are Women, and nearly 4% are Veterans.

Note that “receipts” means to cash a company receives, while “revenues” includes a company’s total earnings even if it is not collected upfront.

(source: Minority Nonemployer Firms – Minority Business Development Agency

14. High Initial Revenue for Female-Owned Firms In 3 Industries

Generally, companies owned by men generate more money and grow at a faster rate than those owned by females—except in 3 industries:

  • high-tech manufacturing (50% higher first-year median revenue by female-owned firms, in an industry that has 87% male owners)
  • construction (25% higher first-year median revenue by female-owned firms., in an industry with 90% male owners)
  • metal and machinery (15% higher first-year median revenue by female-owned firms, in an industry with 87% male owners)

(source: Gender, Age, and Small Business Financial Outcomes

These figures correspond with the fact that female-owned businesses are most commonly found in 3 industries, all of which tend to generate among the lowest annual revenue and net income:

  • Other services except public administration – average net income is $36K
    (includes advocacy, dating services, death care services, dry cleaning and laundry services, equipment and machinery repair, grant making, personal care services, pet care services, photofinishing services, promoting or administering religious activities, and temporary parking services
  • Health care and social assistance – average net income is $75K)
  • Professional, scientific, & technical services – average net income is $98K
    (includes accounting, bookkeeping, and payroll services; advertising services; architectural, engineering, and specialized design services; computer services; consulting services; legal advice and representation; photographic services; research services; translation and interpretation services; veterinary services; and other professional, scientific, and technical services).

(source: Industries at a Glance: Other Services (except Public Administration): NAICS 81

Highest Revenue Industries for Women

Female-owned companies that generate the highest annual revenue and net income are often in industries traditionally dominated by males:

  • Wholesale trade – average net income $1.8M
  • Management of companies and enterprises – average net income $1.5M
  • Manufacturing (as mentioned above) – average net income $1M
  • Mining, quarrying, and oil and gas extraction – average net income $630K
  • Utilities – average net income $472K
  • Construction (as mentioned above) – average net income $361K
  • Transportation and Warehousing– average net income $230K

(sources: Institute for Women’s Policy Research Briefing Paper 2020 and National Women’s Business Council “Women-Owned Firms in the U.S.” 2012 Report

15. Women Have Less Access to Venture Capital

Access to global venture capital (VC) funding is a major source of financing for 43% of public companies, according to a study by Stanford Business. Yet in the past 3 years, the amount of money given to women-led startups has fallen significantly—from an “all-time high” of 2.8% of all VC dollars in 2019, to 2.3% in 2020, and just 2.1% in 2021.

While gender parity and equality have become a primary focus for venture capital firms and entrepreneur associations, a major gap still exists.

(sources: National Women’s Business Council 2021 Annual Report, How Much Does Venture Capital Drive the U.S. Economy? Stanford Graduate School of Business, and The US VC Female Founders Dashboard

16. Female-Owned Million-Dollar Companies are Rare

The vast majority of women-owned businesses—88% of them—generate less than $100,000 in annual revenue.

For the 207,900 women-owned companies that generate $1M or more in annual revenue, this represents just 1.7% of women-owned companies. Yet million-dollar companies generate 69% of all revenue and 68% of all employment in businesses owned by women.

The number of million-dollar female-owned companies have increased by 46% over the past 10 years, compared to an 11% growth overall. By contrast, 6.3% of all male-owned firms break the $1M mark (3 times more than women-owned).

While they just as likely to survive as those owned by men, female-led companies generate less money and grow at a slower rate than male-owned firms.

(sources: Women Business Ownership in America On the Rise, American Express 2018-state-of-women-owned-businesses-report pdf, and National Women’s Business Council “Women-Owned Firms in the U.S.” 2012 Report

17. Women-Owned Employers Saw Significant Decrease in Revenue

The COVID pandemic had a definite effect on everyone, especially financially. Most small businesses experienced disruptions and challenges that continue to affect their ongoing success.

You can read more in My Past Year Wasn’t Great; Should I Still Do a Year In Review?

year in review, past year, business year, business review
What should you do if your past business year didn’t go very well?

The 2021 Small Business Credit Survey (SBCS) gathered the responses of nearly 10,000 small companies in the US, of which 21% are women-owned and 79% are male- or equally owned. They concluded that:

  • 78% of all small employer businesses reported a decline in revenue in 2020 (and 13% reported revenue growth), compared to a revenue decline of 76% for non-employer businesses (and 13% revenue growth).
  • Non-employers saw an astounding -63% revenue decline (which had been steady at 16% to 19% for the previous 4 years), compared to employer firms where over half (53%)said they expected lower revenues by at least 25% due to the pandemic.
  • 46% of employer businesses had reduced their workforce.
  • 79% of employer firms said they had outstanding debt (an increase from 71% in 2019), compared to 59% of non-employer firms (up from 51% in 2019).
  • Total debt of over $100,000 had increased from 31% of firms in 2019 to 44% of all employer firms in 2020, while 9% of non-employer firms had that level of debt.
  • Over one third (36%) of smaller non-employer companies (<100K annual revenue) and 23% of larger firms (>$100K annual revenue) rated their financial condition “poor,” compared to 23% of employer firms.

(source: 2021-Small Business Credit Survey (SBCS) Employer Firms Report

Bigger Decline in Revenue, Increase in Expenses in Female-Owned Business

An analysis by Biz2Credit of 100,000 companies revealed that the average woman-owned business experienced a decline in annual revenue of nearly 4% in 2021, compared to a 2% drop in the average revenue of male-owned businesses.

Operating expenses for female-owned businesses increased by 3%, compared to a 1% increase for male-owned businesses. This resulted in Average Earnings (Annual Revenue – Operating Expenses) that decreased by a shocking 26% among female-owned companies year over year, compared to a 12% decrease in those owned by males.

(sources: Annual Women-Owned Business Study 2022 and Biz2Credit Women-Owned Business Study 2022)

As you can see from this Biz2Credit graph, male-owned companies perform better in both average earnings and in proportionally lower operating expenses than those owned by females.

Biz2Credit Women-Owned vs Men-Owned Business average earnings 2021 vs 2020
Biz2Credit graphic with Average Earnings for Women-Owned vs. Men-Owned Businesses in 2021 and 2020

[image: Biz2Credit Women-Owned Business Study 2022]

Here are additional findings from the Biz2Credit analysis about female-owned businesses:

  • Average Annual Revenue dropped from $493,401 in 2020 to $475,707 in 2021—a decrease of 3.6%.
  • Average Profits (annual revenue – operating expenses) of women-owned businesses decreased to $88,995 in 2021 from $119,654 in 2020
  • Average Expenses increased from $373,748 in 2020 to $386,712 in 2021.
  • Average Earnings decreased by 26% for women-owned businesses and decreased by 12% for male-owned businesses.
  • Female business owners’ Average credit score dropped from 588 in 2020 to 580 in 2021 (14 points lower than the credit score of a male owner).

 (sources: Annual Women-Owned Business Study 2022, Biz2Credit Women-Owned Business Study 2022, and Revenues, Profits of Companies Owned By Women Decreased 26% During 2021

Biz2Credit Women Annual Revenue Operating Expenses
Biz2Credit graphic showing financial data by Women vs. Non-Women

[image: Biz2Credit Women-Owned Business Study 2022]

18. Women-Owned Companies Earn Less Revenue Than Male-Owned

An analysis of 100,000 companies by Biz2Credit revealed significant differences between women-owned and men-owned businesses. Here is a summary of the comparison:

  • In 2021, the overall average Annual Revenue of women-owned companies ($475,707) was $199,936 less (or 29.5%) than male-owned companies (which earned $675,643).
  • Average Credit Score: The average credit score for women-owned businesses (580) was 14 points lower than male-owned businesses (594) in 2021.
  • In 2021, Women-to-Men Borrowing Ratio: business loan applications were given to less than half of female applicants (33%) versus male applicants (67%).
  • Average Loan Size for women-owned businesses ($49,712) was 41% lower than for male-owned businesses ($83,198) in 2020.

(sources: Annual Women-Owned Business Study 2022 and Revenues, Profits of Companies Owned By Women Decreased 26% During 2021

Again, these “average” numbers are inflated; over 88% of women-owned businesses earn less than $100,000 a year, not counting expenses. And female-owned businesses had lower revenue and higher operating expenses than male-owned companies in 2021, as well as a shocking 26% decrease in Average Earnings (Annual Revenue – Operating Expenses).

(sources: 2021 National Women’s Business Council Annual Report, Annual Women-Owned Business Study 2022, Biz2Credit Women-Owned Business Study 2022)


All Firms (by Gender and Revenue)

Annual RevenueTotal # of Firms% of FirmsMajority Female Owned% of Total Female Owned FirmsMale & Equal Owned% of Total Male Owned Firms
 Under $10,00010,481,14233.75%5,102,411 5,378,731 
    43.66% 27.77%
 $10,000-$49,99910,081,22232.46%4,313,900 5,767,322 
    36.92% 29.78%
 $50,000 to $99,999 3,057,4839.85%872,928 2,184,555 
    7.47% 11.28%
 $100,000 to $249,999 3,073,5349.90%674,728 2,398,806 
    5.77% 12.38%
 $250,000 to $499,999 1,610,8655.19%305,979 1,304,886 
    2.62% 6.74%
 $500,000 to $999,999 1,166,4423.76%198,208 968,234 
    1.70% 5.00%
 $1,000,000 or more 1,583,9565.10%217,495 1,366,461 
    1.86% 7.05%

            [table source: Women-owned employer and nonemployer firm data FY 2017 – Dataset – U.S. Small Business Administration (SBA)]

Employer Firms (by Gender and Revenue)

Annual Revenue # Employer Firms% of Employer FirmsMajority Female Owned Employer Firms% Female Owned Employer FirmsMale & Equal Owned Employer Firms% Male Owned Employer Firms
 Under $10,000158,1422.75%37,411 120,731 
    3.30% 2.62%
 $10,000-$49,999436,2227.59%108,900 327,322 
    9.60% 7.10%
 $50,000 to $99,999520,4839.06%133,928  386,555 
    11.80% 8.38%
 $100,000 to $249,999 1,172,53420.41%270,728 901,806 
    23.86% 19.56%
 $250,000 to $499,999 1,011,86517.61%207,479 804,386 
    18.29% 17.45%
 $500,000 to $999,999901,44215.69%163,708 737,734 
    14.43% 16.00%
 $1,000,000 or more 1,543,95626.88%212,395 1,331,561 
    18.72% 28.88%
 Total Employer Firms 5,744,644100.00%1,134,549100.00%4,610,095100.00%

            [table source: Women-owned employer and nonemployer firm data FY 2017 – Dataset – U.S. Small Business Administration (SBA)]

Non-employer Firms (by Gender and Revenue)

 Annual Revenue  # of Non-employer Firms  % of Non-employer FirmsMajority Female Owned Non-employer% of Total Female Owned Non=employer FirmsMale & Equal Owned Non-employer Firms % of Total Male Owned Non-employer Firms
Under $10,000        10,323,00040.79%                 5,065,000          5,258,000 
    48.00% 35.63%
$10,000-$49,999          9,645,00038.11%                 4,205,000          5,440,000 
    39.85% 36.86%
$50,000 to $99,999          2,537,00010.02%                     739,000          1,798,000 
    7.00% 12.18%
$100,000 to $249,999          1,901,0007.51%                     404,000          1,497,000 
    3.83% 10.14%
$250,000 to $499,999              599,0002.37%                       98,500             500,500 
    0.93% 3.39%
$500,000 to $999,999              265,0001.05%                       34,500             230,500 
    0.33% 1.56%
$1,000,000 or more                40,0000.16%                          5,100                34,900 
    0.05% 0.24%
Total Non-employer Firms        25,310,000100.00%               10,551,100100.00%      14,758,900100.00%

            [table source: Women-owned employer and nonemployer firm data FY 2017 – Dataset – U.S. Small Business Administration (SBA)]

Part 4 will explore female owners’ ability to retire and develop a realistic plan for the future.

Curious about what your business could look like if you had higher profit margins? Find out more about what we do.

If you’re ready to talk, contact us so we can discuss your situation.

Grace LaConte is a profitability expert, writer, and speaker. She is the founder of LaConte Consulting, which provides business owners with practical ways to improve their company's profit, growth, and value. Grace also shares her thoughts about marketing strategies and the dangers of predatory tactics used by MLM (multi-level marketing), which you can find at She is based near Houston, Texas.

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