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The Gender Gap in Business Ownership

By: Jack Nicholaisen author image
Business Initiative

The gender gap in business ownership is a prevalent issue that affects the economic potential of many countries around the world.

Despite the continuous efforts to bridge the gap, significant disparities remain in the distribution of business ownership between men and women.

This article aims to provide an in-depth statistical analysis of the gender gap in various business structures, such as Limited Liability Companies (LLCs) and corporations, and the factors that influence ownership and success rates.

By understanding these disparities, entrepreneurs and business owners can take active steps to promote diversity and create a more inclusive business environment.

Gender Distribution in Business Structures

According to a study conducted by Womenable, the proportion of women-owned businesses has been steadily increasing over the past few decades.

In the United States, for example, women-owned businesses accounted for 42% of all businesses in 2019, up from 29% in 2007.

However, the study also found that women are more likely to be involved in specific industries, such as retail, hospitality, and personal services, rather than in high-growth sectors like technology and manufacturing.

When it comes to different business structures, the gender distribution varies as well.

A report by the National Women’s Business Council (NWBC) found that women-owned LLCs represented approximately 27% of all LLCs in the United States in 2012.

In contrast, the percentage of women-owned corporations was only 19%.

The report also highlighted that women-owned businesses tend to be smaller in size, with fewer employees and lower revenues than those owned by men.

Despite the challenges faced by women entrepreneurs, research has shown that their businesses can be just as successful as those owned by men.

A study by the Boston Consulting Group found that women-owned startups generate higher revenue per dollar invested compared to male-owned startups.

Additionally, a report by Inc. Magazine revealed that women-led companies are more likely to survive the startup stage and achieve long-term success.

Factors Influencing Ownership

There are several factors that contribute to the gender gap in business ownership.

Some of the most common factors include:

  • Access to capital:

A study by the Federal Reserve Banks found that women-owned businesses are less likely to receive external financing, such as bank loans and venture capital, compared to male-owned businesses.

This lack of funding can limit the growth potential of women-owned businesses and prevent them from entering high-growth industries.

  • Cultural and societal expectations:

Social norms and expectations can play a significant role in the decision to start a business.

Women may face more pressure to prioritize family and caregiving responsibilities, which can make it challenging to dedicate time and energy to entrepreneurship.

  • Mentorship and networking:

Networking and mentorship opportunities can significantly impact business success.

However, women may have limited access to these resources, especially in male-dominated industries.

A study published in Gender & Society found that women entrepreneurs often lack access to male-dominated networks, which can limit their opportunities for growth and success.

  • Confidence:

Research has shown that women tend to be more risk-averse and have lower self-confidence when it comes to entrepreneurship.

A report by Babson College found that women are less likely than men to consider themselves capable of starting a business, which may hinder their willingness to take the plunge into entrepreneurship.

Practical Steps to Bridge the Gender Gap in Your Business

As an entrepreneur or business owner, there are several practical steps you can take to promote inclusivity and bridge the gender gap in your business. Here are some ideas:

1. Foster a Culture of Inclusivity

The first step towards creating a more diverse and inclusive workplace is to foster a culture that values and celebrates differences.

Encourage open communication, listen to feedback, and create opportunities for all employees to participate equally.

2. Provide Mentorship and Networking Opportunities

Mentorship and networking can significantly impact business success by providing valuable guidance and support.

As a business owner, consider offering mentorship opportunities for women entrepreneurs or sponsoring networking events that prioritize diversity.

3. Promote Access to Capital

Access to capital is a significant challenge faced by many women-owned businesses.

Consider partnering with organizations that provide funding specifically for women entrepreneurs or offering alternative financing options such as revenue-based financing.

4. Offer Flexible Work Arrangements

Offering flexible work arrangements such as remote work or flexible hours can help accommodate the needs of employees who may have caregiving responsibilities outside of work.

5. Prioritize Diversity in Hiring Practices

Diversity should be a priority in all aspects of your business, including hiring practices.

Consider implementing blind hiring practices or actively seeking out candidates from underrepresented groups.

By taking these practical steps towards inclusivity and diversity, you can help bridge the gender gap in your business and promote a more equitable environment for all employees.

In Summary…

The gender gap in business ownership remains a pressing issue that limits the potential for economic growth and innovation.

By understanding the current landscape and the factors influencing ownership, entrepreneurs and business owners can take proactive steps to promote diversity and create a more inclusive environment for all.

It is crucial to provide equal access to resources, such as financing, mentorship, and networking opportunities, to help bridge the gender gap.

If you’re an entrepreneur or business owner, consider joining or supporting organizations that advocate for women in business, such as National Association of Women Business Owners or Women’s Business Enterprise National Council.

Together, we can work towards a more equitable and diverse business landscape.

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About the Author

jack nicholaisen
Jack Nicholaisen

Jack Nicholaisen is the founder of After acheiving the rank of Eagle Scout and studying Civil Engineering at Milwaukee School of Engineering (MSOE), he has spent the last 4 years disecting the mess of informaiton online about LLCs in order to help aspiring entrepreneurs and established business owners better understand everything there is to know about starting, running, and growing Limited Liability Companies and other business entities.