Supporting women in business

October is National Women’s Small Business Month.

Seems hard to believe today, but thirty years ago, some state laws prevented women from getting a business loan without having a male relative co-sign for it.

That changed in 1988 with the passage of a federal bill known as HR 5050, which eliminated that requirement and empowered women to be entrepreneurs on their own terms. It also established the network of Women’s Business Centers, or WBCs – the first women-focused program at the SBA.

That landmark legislation was spearheaded by the National Association of Women’s Business Owners – a group of entrepreneurs who organized in the 1970s to make sure women had opportunities previously limited to men. Today, NAWBO reports that women-owned businesses are the fastest-growing sector of the economy.

Today I had the pleasure of speaking to more than 600 female entrepreneurs at NAWBO’s annual conference in Minneapolis. The ballroom was packed, but the audience represented only a small fraction of the 9.9 million women who own businesses in the United States. It was a timely event, as October is recognized as National Women’s Small Business Month. Each year the observance celebrates America’s female entrepreneurs and recognizes the creation of the National Women’s Business Council, founded on October 25, 1988.

A report issued this spring by the SBA’s Office of Advocacy described female entrepreneurs as an “economic powerhouse.” They not only own 9.9 million businesses in the U.S., they employ more than 8 million workers. Women-owned businesses provide more than $264 billion in wages and salaries to employees and contribute $1.4 trillion in sales to our national economy.

The fact that so many women are now owning businesses and taking control of their own financial futures is an achievement worth celebrating. But like all things, there’s room for growth. And the SBA is working to help more women become entrepreneurs through its “three Cs” – capital, contracts and counseling:

• Capital: The SBA’s lending partners provide loans to small businesses, especially those that may not be able to get loans elsewhere. Research from the SBA’s Office of Advocacy shows women tend to finance new businesses with personal savings and credit cards, while men tend to get financing through loans. That means women tend to start with less capital. And having enough capital at the start is a leading indicator of a business’s long-term success. Businesses that start with more capital tend to have higher sales and employ more people.
• Contracts: The federal government is the world’s largest purchaser of goods and services. It has a goal that 5 percent of federal contracts will be filled by women-owned small businesses. The SBA trains entrepreneurs on how to compete for these contracts.
• Counseling: The SBA has 68 district offices and resource partners in communities across the country. Among them are the Women’s Business Centers. According to the latest survey of WBC clients, the assistance they received enabled them to move forward on their path to success:
  • 16% hired new staff;
  • 21% got financing;
  • 32% increased their profit margins;
  • 40% increased their sales;
  • 47% started their businesses.

  Most of these clients also said their experiences with WBCs helped them increase their self-sufficiency and their confidence – qualities that are harder to quantify but no less important among successful entrepreneurs.

As a woman and an entrepreneur myself, I am thrilled to see more women investing in themselves and taking a risk on a small business. I wish them tremendous success and I’m proud that so many of them have made the SBA a partner on their journey. Owning a business is one of the most effective ways to secure a financial future for ourselves, provide for our families, exercise our commitments to our communities, and drive our country’s economic growth.

The SBA (@SBAgov) will be hosting a Twitter chat on women-owned small businesses on Thursday, October 26, at 3:00 p.m. ET/12:00 p.m. PT. We’ll be sharing tips and resources to help women start, grow and succeed in business. Follow along with the hashtag #SBAchat.