Is women-owned businesses more successful?
The business world is more diverse than ever. Data from a 2019 survey conducted by the National Council of Women’s Business Enterprises found over 13 million women-owned companies in the United States, accounting for almost 42% of the total number of US companies. At the same time, research shows that companies founded or co-founded by women are excellent financial investments and increase revenue per capital invested compared to companies founded by men. However, this evidence was not sufficient to ensure proper support for women to enter the business world. In fact, they consistently receive significantly less funds than their male counterparts. In honor of International Women’s Day 2025 and its theme “Accelerating Action,” we dig into some of the obstacles female entrepreneurs face, and most importantly, why women-owned businesses are important.
What prevents women from becoming entrepreneurs?
When it comes to opening your own business as a woman, some challenges certainly will be at some point in time.
Insufficient funding is certainly the first. Because having enough capital to pull your startups and small businesses off the ground is a problem for businessmen of all genders. However, women seem to struggle more on this front, with only 2.2% (VC) of all venture capitalists going to women-owned startups. That amounts to about $3 billion, but part of the $130 billion invested that year. It’s not that different in 2023. This is because the percentage of VC funding received by women did not exceed 3%.
Another problem with aspiring businesswomen is that some businessmen often lack overconfidentiality that oozes out. This may be because they are not encouraged to trust themselves and their ideas, or because they do not understand how successful their products and services are. In any case, being overconfident doesn’t guarantee success, but it certainly allows you to start your own business and take action to secure funds.
Finally, there is a certain market saturation that aspiring businesswomen must overcome. As we saw in this study by Wells Fargo, over 50% of women-owned businesses operate in a limited number of industries: technical services, management and support services, healthcare and social support, personal care and beauty services. This means that increasing competition remains a key issue until more industries are opened for women.
What factors in the success of women-owned businesses?
The numbers are a bit discouraged, but the truth is that it proves that women can become successful entrepreneurs every day. A study conducted by BCG revealed that women-owned companies received less than half of their funds compared to male entrepreneurs, but they achieved an overall ROI. Specifically, every dollar earned 78 cents compared to a company designed by a man who earned just 31 cents.
We believe that the success of these women is due to a variety of factors. But most importantly, it may be that securing funds is difficult and, even if that happens, capital is limited. This will allow businesswomen to pay special attention to their business plans, use tight funds as effectively as possible, minimizing losses. What’s more, failure and retrying are often not an option for them. So they need to get it right for the first time. Additionally, women entrepreneurs place a particular emphasis on the values of collaboration, openness, and teamwork that are essential to successful businesses. Finally, their strong will to break the mold, ensure autonomy and change communities are often an important motivation that helps them make the right decisions and drive performance.
Four important reasons to support women-owned businesses
Now that we have seen the challenges and motivations of female entrepreneurs, it’s time to explore four reasons why women-owned businesses are important.
1. Close gender differences in business sector
It is general knowledge that despite the major steps taken, the business sector still lacks equality. Gender pay gaps have not been ruled out, and women have less leadership positions than male colleagues. This situation can be changed by opening the business world to women and increasing the number of women-owned businesses. Women who run their own businesses will help promote equal wages for all employees, regardless of gender, create more professional opportunities, build wealth and increase independence for other women.
2. Support the community
Giving more space to female entrepreneurs can change our society and small communities. Establishing more businesses, whether the founder is male or female, means more opportunities for economic growth, job creation and diversity in the market. Especially when it comes to women-owned businesses, the success of these women means they can reinvest in the local economy and often support other small businesses. Ultimately, the success of female entrepreneurs triggers a chain reaction, boosts purchasing power and brings many positive changes to the community.
3. Redefine the success and responsibility of a company
As mentioned earlier, what might distinguish women from male entrepreneurs is the value they chose to place first. Specifically, it is common for women-owned businesses to emphasize social responsibility, inclusiveness, sustainability, and more. These factors are becoming increasingly important in the business world, particularly with increasing diversity, inclusion and equality (DEI) policies and increasing environmental awareness. Women entrepreneurs tend to change the way we perceive responsibility for business and society, prioritizing these principles and establishing a new balance between profit and purpose.
4. Realize impressive possibilities
The last reason women-owned businesses deserve support is that they cannot be denied. Given what they have said so far about the funds they receive and the high return on investment they generate, we can wonder what they can achieve if they are funded equally with a male-owned business. Wells Fargo asked the same question, finding that women-owned companies currently generate gross revenues of $2.7 trillion, but that number could shoot up to $8 trillion if the business sector is accessible to everyone. The number of women-owned businesses is growing faster than ever, and supporting this growth can only benefit the business world and the society as a whole.
Shaping the future of aspiring female entrepreneurs
When celebrating International Women’s Day this year, it is important to keep in mind the future you want to create for young girls. Supporting women-owned businesses helps women entrepreneurs claim their rightful place in the business world, serving as an inspiration and role model for future generations. The more women enter the business world, the easier it is to shape an entrepreneurial environment that is open to everyone, and it does not limit anyone’s opportunities to realize their dreams based on gender, race, or background.
It was originally released on March 8, 2025.
