In July, I wrote an AnnArbor.com article called “How can women-owned companies close the revenue gap?” The article discusses the fact that women start companies at twice the rate as men, but according to the Center for Women’s Business Research, men-owned firms are twice as likely as women-owned firms to earn more than $1 million in revenue per year. Moreover, the average revenues of majority women-owned businesses are still only 27 percent of the average of majority men-owned businesses. In the article, I offered a few ways women business owners and leaders might begin to get over the hurdles of growing a successful company.

In August, Dianne Marsh wrote her own excellent article called “What defines business success?” where she references my article and explains that many companies are choosing to stay small, and that “success” isn’t necessarily defined by your company’s revenues or number of employees. Bigger doesn’t always mean better when it comes to companies. I agree with Dianne – my own idea of success is not to grow a massive company. Success for me as a business owner means building and sustaining a good group of clients and retaining a strong, happy team. I’d also hope that my company contributes to our community (through volunteering, donations, teaching, and leadership).

Regardless of our own definitions of “success,” I do find it very interesting that there is still a huge difference between companies that are women owned and male owned.  Here are more stats from the Center for Women’s Business Research:

  • 85% of all women owned businesses were sole proprietorships
  • 6% of women owned businesses were incorporated (C corporations, excluding S corporations)
  • The 6% of incorporated women owned businesses accounted for 45% of receipts of all women owned businesses
  • Just under 69% of women owned businesses had under $25,000 in receipts, compared to 5% of all businesses with under $25,000 in receipts.
  • Only 2% of women owned businesses had over $1 million in receipts, compared to 5% of all businesses with over $1 million in receipts.
  • Only 16% of women owned businesses had paid employees
  • 70% of women owned businesses operated in the retail and services sector

What does all this mean? The stats show that women are starting a lot of companies and increasing their revenues; but most of these companies are small, earn less than $25,000 per year, and do not have employees. While women-owned firms may define success in different ways, I worry that because most of our companies are very small one-woman shops, our abilities as business leaders may be questioned or ignored. Are we achieving our full potential? Are we making our voices heard by government, impacting public policy to our benefit, or positioning ourselves to participate in Michigan’s economy as the state recovers in the coming years?

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