Number of Women-Owned Businesses Growing at Highest Pace Since the Recession

The Sixth Annual State of Women-Owned Businesses Report,
Commissioned by American Express OPEN Finds More than 1,000 Women-Owned
Businesses are Formed Each Day

Number of Firms Owned by Women of Color More Than Doubled Over
Past Nine Years

NEW YORK–(BUSINESS WIRE)–Over the past nine years, the number of women-owned firms has grown at a
rate five times faster than the national average, reaching a
post-recession high, according to the 2016 State of Women-Owned
Businesses Report, commissioned by American Express OPEN (NYSE:AXP). The
sixth annual report, which is based on historical and current U.S.
Census Bureau data and Gross Domestic Product data, found that between
2007 and 2016, the number of women-owned firms rose by 42% with women
starting 1,072 (net) new businesses per day. Additionally, the report
indicates that women-owned firms now number 11.3 million, employ nearly
9 million people and are generating more than $1.6 trillion in revenue.

Women-owned firms are outpacing the national average in both job
creation and revenue generation post-recession. Employment growth among
women-owned firms is strong with an increase of 18% since 2007, while
hiring declined 1% among all businesses during the same time period. In
addition, business revenues among women-owned firms increased by 35%
since 2007, compared to 27% among all U.S. firms. With this growth,
women are now the majority owners of 38% of the country’s businesses, up
from 29% in 2007.

“We are pleased to see the continued rise of the vital role that
women-owned businesses play in our country’s post-recession recovery,”
said Susan Sobbott, president of American Express Global Commercial
Payments. “We are inspired by these women who are continuing to pursue
their entrepreneurial passions, and are strengthening our communities
and economy even further.”

Significant growth in firms owned by women of color

Among women-owned firms, one of the fastest growing sectors are
businesses owned by women of color. Over the past nine years, the number
of firms owned by women of color more than doubled, increasing by 126%.
In addition, the nearly five million businesses owned by women of color
make up almost half of all women-owned firms. These businesses employ
two million workers and generate $344 billion in annual revenue.

When comparing the growth in the number of firms owned by women of color
with women-owned firms overall, nearly eight in 10 (79%) of the net new
women-owned firms were started by a woman of color since 2007 (an
increase of 2.8 million).

As of 2016, there are an estimated:

• 1.9 million African American women-owned firms;
• just under 1.9 million Latina-owned businesses;
• an estimated 922,700 Asian American women-owned companies;
• 153,400 Native American/Alaska Native women-owned enterprises;
• and approximately 31,100 Native Hawaiian/Pacific Islander women-owned
  firms.

Women-owned firms are geographically dispersed

The five states home to the greatest number of women-owned firms as of
2016 are:

1. California

2. Texas

3. Florida

4. New York

5. Georgia

The top metropolitan areas by number of women-owned firms as of 2016 are:

1. New York City

2. Los Angeles

3. Miami

4. Chicago

5. Atlanta

Since the recession, the greatest growth in number of women-owned firms
was seen in the South. Eight out of the 10 fastest-growing states for
number of women-owned firms between 2007 and 2016 are located in that
region and are: Florida, Georgia, Texas, Michigan, Mississippi, South
Carolina, Tennessee, The District of Columbia, South Dakota and
Louisiana.

Industry trends

In the wake of the recession, women are turning to traditional
industries such as lifestyle and services companies. Between 2007 and
2016, the following four industries saw the greatest increase in the
number of women-owned firms:

• other services (e.g. home care to hair and nail salons and pet care
  businesses), up 98%;
• administrative, support and waste management services (including
  janitorial and landscaping businesses as well as office administrative
  support and travel agencies), up 64%;
• accommodation and food services, up 62%;
• and construction, up 56%.

New in this year’s report is a look at the industry composition of women
of color, which found that there are more African American women-owned
firms in both the other services sector and health care and social
assistance sector than any other ethnic group. Additionally, female
Asian American-owned businesses are more concentrated in the
accommodation and food service sector, while most Latina-owned firms are
found in administrative, support and waste management services
businesses.

View the full 2016 State of Women-Owned Business Report, here.

Methodology

The 2016 State of Women-Owned Businesses Report, commissioned by
American Express OPEN, is based on data from the United States Census
Bureau, specifically their quinquennial business census, the Survey of
Business Owners (SBO), which is conducted every five years in years
ending in 2 and 7. Data from the past three Census surveys – 2002, 2007
and 2012 – were collated, analyzed and extrapolated forward to 2016,
factoring in relative changes in Gross Domestic Product (GDP) not only
nationally but also at industry, state and metropolitan statistical area
levels. All GDP data were obtained from the Bureau of Economic Analysis
(bea.gov) – another bureau, like the Census Bureau, within the U.S.
Department of Commerce.

Specifically, growth in GDP from 2002 to 2012 ($10.6 to $16 trillion)
was compared to that from 2012 to the fourth quarter of 2015 ($16 to
$17.2 trillion). Relative annual growth rates were then used to estimate
the growth in the number of firms over the 2012 to 2016 period – thus
adjusting a straight-line extrapolation to account for relative economic
growth between the two time periods. This was done not only at the
national level, but also by applying actual gross state, metro area and
industry-level output figures (which were available up to the fourth
quarter of 2014).

About American Express OPEN

American Express OPEN is a leading payment card issuer for small
businesses in the United States and supports business owners and
entrepreneurs with products and services to help them run and grow their
businesses. This includes business charge and credit cards that deliver
purchasing power, flexibility, rewards, savings on business services
from an expanded lineup of partners and online tools and services
designed to help improve profitability. Learn more at www.OPEN.com
and connect with us at openforum.com
and twitter.com/openforum.

About Womenable

This report was prepared for American Express OPEN by Womenable, a
research, program and policy development consultancy whose mission is to
improve the environment for women-owned businesses worldwide. Womenable
pursues this mission by working with the stewards of women’s
entrepreneurship around the world – policy makers, multi-lateral
organizations, corporate decision makers, entrepreneurial support
organizations and the women’s business community – to evaluate,
implement and improve policies and programs to support women’s
enterprise development. Learn more at womenable.com.

Contacts

M Booth
Alex Della Rocca
212-539-3203
Alexd@mbooth.com
or
American
Express OPEN
Heather Norton
212-640-0496
Heather.A.Norton@aexp.com