Women are increasingly becoming entrepreneurs and small business owners. They’re starting their own businesses, running operations their way, and growing to profitability. And they recently reached a benchmark in government contracting.
Women Make History in Federal Contracting
Maria Contreras-Sweet, Administrator of the U.S. Small Business Administration (SBA), recently reported that the federal government set a new record in fiscal year 2015 in providing or backing working capital to women-owned small businesses (WOSBs).1 Federal contracts to WOSBs totaled $17.8 billion, or 5.05 percent of all eligible contracting. This was the first time contracting for women-owned small businesses has ever been above five percent, a goal set by Congress more than 25 years ago.
Smart Women Build Smart Businesses
Women-owned businesses have grown to success across the entire business spectrum.2
- There are now 11.3 million women-owned businesses in the U.S., employing nearly 9 million people and generating over $1.6 trillion in revenues.
- Women-owned businesses now comprise 38% of the business population, employ 8% of the country’s private sector workforce, and contribute 4% of the nation’s business revenues.
- Since 2007, there have been 1,072 net new women-owned firms launched each and every day.
- The market segments that WOSBs tend to pursue are: educational services, entertainment, recreation, social aid and assistance, and healthcare. In the most popular industries, seven out of 13 companies are owned by women – and that’s a sizeable market.
- Between 2007 and 2016, while the total number of U.S. firms increased by 9%, the number of women-owned firms increased by 45% – meaning that over this period the number of women-owned firms grew at a rate fully five times the national average.
Even though women own nearly 40% of U.S. businesses, women only receive 5% of equity capital.2 The lion’s share goes to men-owned businesses, making it more difficult for women to get the financing they need to grow businesses to profitability. Luckily, the SBA is available to help close the gap in financing.
The SBA: Invaluable Help for WOSBs
The Small Business Administration provides a variety of resources for women entrepreneurs – from seminars and conferences on “how-to” to helping women complete an application for an SBA-guaranteed loan – a loan that could form the foundation to grow a business.
The SBA provides services to WOSBs in many ways:
- The SBA is a great source of information on starting a business, through web-based resources, local seminars, and in-person assistance.
- The SBA’s Office of Women’s Ownership provides tips to help businesses get traction quickly.
- The SBA doesn’t loan money, but it backs loans through local banks, making it easier for business owners to get the financing they need.
- The SBA will walk business owners through the process of bidding on federal government contracts. If they are bidding on community or statewide contracts, the SBA will align a company’s needs with local resources.
3. For more information on the WOSB Federal Contracting Program, please go to https://www.sba.gov/contracting/government-contracting-programs/women-owned-small-businesses/what-you-need-know-if-you-are-women-owned-small-business
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.