“Pursuing Passion” Leads in Guidant Financial’s Report on the State of Women-Owned U.S. Small Businesses in 2017

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The number of women-owned businesses increased 18% year over year

“We saw tremendous growth in women-owned businesses in 2017,” said David Nilssen, CEO of Guidant Financial.

As 2018 began, the number of small businesses owned by women was up 18 percent over the previous year, according to a survey from Guidant Financial, a leader in small business financing. The company surveyed more than 2,600 small business owners and aspiring entrepreneurs. Of that, women accounted for 26 percent of current business owners and 24 percent of hopeful entrepreneurs.

“We saw tremendous growth in women-owned businesses in 2017,” said David Nilssen, CEO of Guidant Financial. “A cautious view of the business climate by hopeful women entrepreneurs has not slowed this rate of growth. In fact, the tax reform and economic growth likely will benefit many small business owners in 2018. As a result, we expect business ownership by women to continue to grow.”

Reason/Education

Data showed that “wanted to pursue my passion,” ranked as the top reason women pursued business ownership in 2017 and was cited by just over half the respondents. This compares with male business owners who primarily were “ready to be their own boss,” although that choice came in a close second reason among women as well. It turns out that women prepared themselves with higher education before starting their own business. Women were 16 percent more likely to have some post-secondary education than men.

Outlook

Responses indicated that while business optimism is up among the overall population of aspiring business owners, women are more cautious. Women who plan to start a business ranked their confidence in the current state of small business as a more neutral 7 on a scale of 10, while aspiring male business owners ranked this a full point higher on average. Only 37 percent of all business owners ranked their confidence as a six or below, many of those were women. In fact, a full one-third of women business owners surveyed ranked their confidence as a five or below.

Regardless of their optimism, 80 percent of men and women business owners are happy. In fact, 40 percent of women respondents rated their happiness as a business owner as a 10 out 10.

Financing

Women listed lack of capital as a challenge to running their business almost 11 percent more than men. Men were 19 percent more likely to invest more than $100,000 in their businesses than their female counterparts, and it appears that business loans might be more difficult to secure for women. In fact, male business owners obtained Small Business Administration loans at a much higher rate: only 6 percent of women funded their businesses using SBA loans, which is a full 24 points behind the men responding.

Women typically fund their businesses using cash, friends and family, followed by 401(k) business financing [formally known as Rollovers as Business Startups (ROBS)]. ROBS funding allows anyone with rollable retirement funds to fund a business using some or all of that money without incurring tax penalties or getting a loan. With the only requirement being a $50,000 minimum in a rollable retirement account, ROBS is often much easier funding to obtain without credit score or collateral requirements.

Trends

The survey also yielded valuable trend information on women in the U.S. small business economy. Highlights include:

  • Demographics – 35 percent of women respondents were in their fifties, followed by 28 percent in their forties, 18 percent in their thirties, 13 percent in their sixties, 5 percent between 18-29 and 2 percent at age 70 or above.
  • Ethnicity – Minorities accounted for 50 percent of women business owners surveyed.
  • Geography – California topped the list in terms of the highest volume of women entrepreneurs, followed by Texas, Florida, Georgia and New York.

While lack of capital/cash flow remains a top challenge for small business owners, 69 percent of women reported that their business is profitable.

Guidant Financial is committed to helping individuals secure money to start or buy a business. They’ve helped over 16,000 individuals secure over $4.2 billion in small business funding.

An accompanying infographic about women respondents can be found at https://www.guidantfinancial.com/learning-center/infographics/2018-women-in-business/.

Methodology

Between November 28, 2017 and December 1, 2017, Guidant Financial conducted an email survey of more than 2,600 male and female small business owners and aspiring entrepreneurs from the continental U.S., Alaska, and Hawaii. Ages of respondents ranged from 18 to over 70.

About Guidant Financial

Guidant Financial helps business owners secure financing to start, buy or grow a business. An industry leader in innovative business and franchise financing, Guidant works with new and existing entrepreneurs to identify, evaluate and deploy customized financing solutions. Their services include, but are not limited to, 401(k) business funding, SBA loans, unsecured credit and portfolio loans. Visit Guidant on the web at guidantfinancial.com.

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Stacia Kirby
Kirby Communications
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