4 Reasons Why Women-Owned Businesses Matter

Are Women-Owned Businesses More Successful?

The business world is more diverse than ever before. Data from a 2019 survey conducted by the Women’s Business Enterprise National Council found over 13 million women-owned businesses in the United States, representing almost 42% of the total number of US businesses. At the same time, research showed that businesses founded or cofounded by women are better financial investments, generating more revenue per capital invested in comparison to businesses founded by men. However, this evidence has not been enough to guarantee women adequate support to enter the business world. In fact, they consistently receive substantially less funding than their male counterparts. In honor of International Women’s Day 2025 and its theme “Accelerate Action,” we take the opportunity to delve into some of the obstacles women entrepreneurs face and, most importantly, why women-owned businesses matter.

What Keeps Women From Becoming Entrepreneurs?

When it comes to opening your own business as a woman, a few challenges will certainly come into play at one point or another.

Inadequate funding is certainly the first, as having enough capital to get your startup or small business off the ground is an issue for businesspeople of any gender. However, women seem to struggle more on this front, with only 2.2% of the total venture capital (VC) going to women-owned startups. Although this amounts to almost 3 billion dollars, it is still a fraction of the 130 billion dollars invested that year. Things don’t look that much different in 2023, as the percentage of VC funding women received didn’t surpass 3%.

Another issue with aspiring businesswomen is that they often lack the overconfidence that some businessmen exude. This might be because they haven’t been encouraged to have trust in themselves and their ideas, or they don’t realize how successful their product or service would be. In any case, while being overconfident doesn’t guarantee success, it can certainly push a person to start their own business and take action to secure funding.

Finally, there is a certain amount of market saturation that aspiring businesswomen must overcome. As we see in this study from Wells Fargo, over 50% of women-owned businesses operate in a limited number of industries, namely technical services, administrative and support services, healthcare and social assistance, and personal care and beauty services. This means that increased competition will remain a significant challenge until more industries open up for women.

What Factors In The Success Of Women-Owned Businesses?

Despite the numbers being a little discouraging, the truth is that women prove that they can be successful entrepreneurs every day. Research conducted by BCG revealed that although women-owned businesses received less than half of the funding compared to male entrepreneurs, they garnered a higher overall ROI. Specifically, for every dollar of funding, they made 78 cents, compared to male-founded businesses that made just 31 cents.

We can attribute the success of these women to a variety of factors. The most important one, though, might be that securing funding is difficult, and even when it happens, the capital is limited. This makes businesswomen pay extra attention to their business plan, carefully using their tight funds as effectively as possible and minimizing their losses. Besides, failing and retrying is often not a choice for them, meaning they need to get it right the first time. Additionally, women entrepreneurs often place special emphasis on values such as collaboration, openness, and teamwork, which are essential for successful businesses. Finally, their strong will to break the mold, secure their autonomy, and make a change in their community are often significant motivators that help them make the right decisions and drive performance.

4 Essential Reasons To Support Women-Owned Businesses

Having seen the challenges and motivators of women entrepreneurs, it is time to explore 4 reasons why women-owned businesses are significant.

1. Close The Gender Gap In The Business Sector

It is common knowledge that, despite the great steps that have been taken, the business sector still lacks equality. The gender pay gap has not been eliminated, and women continue to hold fewer leadership positions than their male colleagues. Opening the business world to women and increasing the number of women-owned businesses can turn this situation around. Women who run their own businesses can promote equal pay for all employees, regardless of gender, create more professional opportunities for other women, as well as help them build wealth and increase their independence.

2. Support Our Communities

Giving more space to women entrepreneurs has the potential to transform our society and smaller communities. Establishing more businesses, irrespective of whether their founder is a man or woman, means more opportunities for economic growth, job creation, and diversity in the marketplace. When it comes to women-owned businesses in particular, the success of these women means that they are able to reinvest in their local economies, often supporting other small businesses. Ultimately, the success of women entrepreneurs causes a chain reaction, enhancing their buying power and bringing numerous positive changes to local communities.

3. Redefine Corporate Success And Responsibility

As we mentioned earlier, something that may differentiate female from male entrepreneurs is the values that they choose to put first. Specifically, it is common for women-owned businesses to emphasize social responsibility, inclusivity, sustainability, and more. These elements are gaining more and more importance in the business world, particularly with the rise of diversity, inclusion, and equality (DEI) policies and increased environmental awareness. Female entrepreneurs tend to prioritize these principles, changing the way we perceive businesses and their responsibilities toward society while creating a new balance between profit and purpose.

4. Bring Impressive Potential To Life

The final reason why women-owned businesses deserve support is that their potential is undeniable. Given what we have said so far about the funding they receive and the high Return On Investment they generate, one can only wonder what they would be able to achieve if they were funded equally as male-owned businesses. Wells Fargo asked the same question and found that businesses owned by women currently generate a total revenue of $2.7 trillion, while this number could shoot up to $8 trillion if the business sector becomes more accessible to all. The number of women-owned businesses is growing faster than ever, and supporting this growth can only benefit the business world and society as a whole.

Shaping The Future For Aspiring Women Entrepreneurs

As we celebrate this year’s International Women’s Day, it is crucial that we keep in mind the future that we want to create for young girls. Supporting women-owned businesses helps female entrepreneurs claim their rightful place in the business world and serve as an inspiration and role model for future generations. The more women enter the business world, the easier it will be to shape an entrepreneurial environment that is open to all and doesn’t limit anyone’s opportunities to bring their dreams to life based on their gender, race, or background.

Originally published on March 8, 2025