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The State of Minority-Owned Businesses: Women Entrepreneurs Posted: 28 Mar 2020 01:04 PM PDT How are women business owners faring these days? Better, even though the Global Entrepreneurship Monitor (GEM) 2018-2019 Women's Report, coauthored by researchers from Babson College and Smith College, says the number of startups by women worldwide still lags that of men. Total Entrepreneurial Activity (TEA) represents the percentage of the adult working-age population, ages 18 to 64, who are new entrepreneurs. The global TEA rate for women in the GEM Report was 10.2%, about three-quarters of that for men. GEM studies the economies in 59 countries, and the report shows approximately 231 million women are starting or running new businesses in those regions. There's been progress in the number of established businesses owned by women. (GEM defines a business as "established" if it has been operating for more than 42 months.) Worldwide, 6.2% of women-owned established businesses, compared to 9.5% of men. Globally, younger women (ages 25-44) had the highest entrepreneurial participation rates. DON’T MISS: The State of Minority-Owned Businesses: African American Entrepreneurs Reasons for startup The intention to start a business within the next three years is approaching parity between male- and female-owned businesses. The global average for women with that intent is 17.6%, about four points less than men. The lower the average income in the country, the more women planned to become entrepreneurs. For example, in low-income countries, 37.8% of women intended to start within three years, while in high-income countries, only 12.6% planned to do so. More women (27%) around the globe started their businesses "out of necessity," compared to men (21.8%). Conversely, fewer women (68.4%) started their companies "to pursue an opportunity" than men (74%), resulting in what GEM calls a "7% gender gap." GEM notes that there are vast differences by region in the necessity and opportunity motives. In North America, just 9% of women started their businesses out of necessity, compared to 79% who started to pursue an opportunity. But there are differences in North America as well. In Canada, entrepreneurial women are 10% more likely than men to say opportunity is their motive for starting a business, while in the United States, women business owners are about 10% less likely than men entrepreneurs to cite opportunity as a startup motivator. American women The picture is brighter when focusing just on the United States, according to the annual State of Women-Owned Businesses Report, commissioned by American Express. In 2019, American women started an average of 1,817 new businesses per day between 2018 and 2019, down only slightly from the record-setting 2018 number of 1,821. These businesses represent 42% of all American businesses—nearly 13 million—employing 9.4 million workers and generating revenues of $1.9 trillion. The report, which is based on U.S. Census Bureau data, found that over the past five years: The number of women-owned businesses increased 21%, while all businesses increased only 9%. Total employment by women-owned businesses rose 8%, while for all businesses the increase was far lower at 1.8%. Total revenue for women-owned businesses also rose slightly above all businesses: 21% compared to 20% respectively. Also, over that five-year time period, there's been a lot of growth in the number of women who are operating side gigs or hustles. The Amex reports calls these women "sidepreneurs" and says they've grown at a rate that is nearly twice as fast as the overall growth in female entrepreneurship: 39% compared to 21%, respectively. Much of that growth comes from minority women, where sidepreneurship is two times higher than all businesses: 65% compared to 32%, respectively. In fact, while the number of women-owned businesses grew 21% from 2014 to 2019, firms owned by women of color grew 43% and African American women-owned firms grew even faster at 50%. Other Articles From AllBusiness.com: The Complete 35-Step Guide for Entrepreneurs Starting a Business 25 Frequently Asked Questions on Starting a Business 50 Questions Angel Investors Will Ask Entrepreneurs 17 Key Lessons for Entrepreneurs Starting A Business Challenges for women entrepreneurs That doesn't mean there aren't challenges for women business owners. According to the 2019 Bank of America Women Business Owner Spotlight, the fourth annual study exploring women entrepreneurs' goals and challenges, women in the United States say their biggest concern is access to capital. While women entrepreneurs do believe their access to capital has improved in the past 10 years, 58% say they don't have the same access to capital as men business owners. Only 34% of the women think women business owners will eventually gain equal access to capital (on average, they think that will happen in 2033). And sadly 24% of the women don't think women will ever have equal access to capital. But the report Beyond the Bucks: Growth Strategies of Successful Women Entrepreneurs from Babson's Center for Women's Entrepreneurial Leadership (CWEL) and Bank of America’s Private Bank shows successful women entrepreneurs who faced challenges "created alternate paths to success for themselves." "The research found gender-based barriers, such as misperceptions regarding market opportunities and access to traditional networks, are challenging, but none of these setbacks stopped these women from achieving success," says Karen Reynolds Sharkey, business owner executive, Bank of America Private Bank. The three key challenges noted in the report were: Market misperceptions: Women entrepreneurs' competency and market knowledge is routinely disregarded, including market opportunities they identify. Network exclusion: Women entrepreneurs often experience limited, gender-based access to established social and business networks, creating less access to knowledgeable mentors and capital expansion. Managing expansion while underfunded: Barriers to startup and growth capital create new, ongoing challenges, including constraints on funding for recruitment, access to new markets, and overall expansion. "Through this research, we identified several actionable strategies women entrepreneurs are using to turn the challenges they face into opportunities and grow their businesses," says Lakshmi Balachandra, Ph.D., assistant professor, entrepreneurship at Babson College and the principal researcher on the project. "These include building on their skills and strengths and leveraging their personal insights for sustainable growth." Supporting women entrepreneurs The GEM Women's Report offers some recommendations to help support women entrepreneurs: Address stereotypes about who entrepreneurs are and what entrepreneurship is. Report co-author and Babson College Vice Provost of Global Entrepreneurial Leadership Candida G. Brush says, "An inclusive approach is more beneficial and far reaching than a continued emphasis on past models." Learn from each other about the best ways to build successful businesses and vibrant entrepreneurial ecosystems. "We should learn from the data to guide the development of an ecosystem that works well for all, informed by social, cultural, political, and economic contexts," says co-author and Babson Professor Emeritus Patricia Greene. Change the dialogue about entrepreneurship to match reality. Entrepreneurial ecosystems often focus on the access to capital, but lack of access may be a symptom rather than the root illness. Lack of profitability [not access to capital] was the number one reason cited by both men and women for business discontinuance. Other reasons for discontinuance were related to selling the business or retiring. Brush says, "This suggests that women could benefit from more training on how to capture value when exiting a business. RELATED: 10 Reasons Why Women Kick Butt in Business The post The State of Minority-Owned Businesses: Women Entrepreneurs appeared first on AllBusiness.com. Click for more information about Rieva Lesonsky. Copyright 2020 by AllBusiness.com. 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Newly Available CARES Act Loans: 10 Things Small Businesses Need to Know Posted: 28 Mar 2020 12:41 PM PDT The federal government has recently enacted two pieces of legislation to help small businesses weather the COVID-19 crisis, including the CARES (Coronavirus Aid, Relief, and Economic Security) Act passed on March 25, which provides $349 billion in Small Business Administration (SBA) loans. The previous bill provided for $7 billion in additional loans. It is important to note that the goal of the government is to get these loans into the hands of small business owners as quickly as possible, in order to keep them going and be able to continue paying their employees. The loans are meant to address the loss in sales and ability to operate along with the corresponding inability to pay employees, rent, and other costs of doing business due to the pandemic. To that end, the SBA is trying to ease previous requirements for securing loans and attempting to make the process as simple as possible. There are currently two types of loans available: Economic Injury Disaster Loans (EIDL) and Paycheck Protection Loans (PPP). You can apply for both loans, but you can't use funds from each loan for the same expenses such as payroll, rent, insurance, etc. Here are 10 things you need to know about the loan programs: If you are a business with under 500 employees, you are considered a small business (with some exceptions) and can qualify for the loans. Nonprofits and veterans' organizations also qualify. All 50 states have been declared disaster areas and, therefore, no matter where your company is based, you may apply. The EIDL loans offer up to $2 million for working capital needs such as fixed debt and payroll. The interest rate is 3.75% for businesses and 2.75% for nonprofits with a 30-year term possible. There is an automatic one-year deferment on repayment so the first payment is not due for a full year, although interest begins to accrue at time of disbursement. If you apply for an EIDL loan, you can request a $10,000 grant for working capital. The SBA claims you will receive this grant within three days of the application filing, whether or not you ultimately qualify for a loan. Again, it is a grant that does not have to be repaid. The PPP loans provide up to $10 million over 10 years at 4% interest. You can calculate how much you are eligible for by multiplying your 2019 average payroll costs for all employees earning under $100,000 by 2.5. This includes salary, health insurance, and paid sick leave. Eight (8) weeks of the PPP loan amount will be considered a grant and forgiven. The SBA is waiving the previous requirement for having additional credit options, and the need to apply for additional credit and failing to secure it prior to applying for these loans—the "Credit Elsewhere Test." They will also be lenient if you have a poor credit score and are looking more at future lost revenue than ability to repay. The SBA is waiving the requirement to secure the loan with real estate or a personal guaranty, and review of personal financial statements. Independent contractors, self-employed, and sole proprietors do qualify for these loans. The SBA is authorizing banks and other commercial lenders currently authorized to make SBA loans to originate and administer these new loans. They are actively seeking new institutions to do so in order to meet increased demand. Apply at www.sba.gov/funding-programs/disaster-assistance. The regulations are still evolving with regard to these loans, so stay tuned for updated information. The key takeaway is that the SBA is trying to reduce the requirements as much as possible and provide more lenders to administer these loans. So, apply today. RELATED: What Advice Are Venture Capitalists Giving to Startups in Light of the Coronavirus Crisis? The post Newly Available CARES Act Loans: 10 Things Small Businesses Need to Know appeared first on AllBusiness.com. Click for more information about Neil Hare. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

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