Women entrepreneurs are outpacing men, according to Wells Fargo’s latest report on the impact of women-owned businesses.
Although corporate America is still predominantly led by men, the number of women-owned businesses has grown faster than those owned by men in the past five years. Small businesses helmed by women have also seen faster employment and revenue growth over that period, based on Wells Fargo’s analysis of Census data.
Why women are starting their own businesses
“Women see a real opportunity in entrepreneurship to do things on their own,” said Geri Stengel, the president of Ventureneer, a market research firm that co-published the report with Wells Fargo. “They’ve hit the wall in corporate America.”
While there are still significant barriers for women raising the capital needed to start a business, the report notes that solopreneurs have risen with the advent of digital platforms that democratize business opportunities. Women, in particular, have continued to flourish after federal stimulus packages aimed at supporting small businesses during the pandemic.
Education is a factor as well, Stengel added. Currently women are attending and graduating from college at higher rates than men.
Despite the strong recent growth in women’s entrepreneurship, they’re still underrepresented at the top of the corporate ladder. Women-owned companies only make up 2.4% of businesses that earn more than $20 million a year in revenue compared to men-owned businesses that make up 22.5%, according to the Wells Fargo study. The remaining balance represents companies owned by multiple people, or large corporations.
Overall the gender gap between the revenue earned by all women-owned businesses is gradually closing and if the current trend continues, the study projects that it would take 120 years before women would reach equal parity with men.
Where gaps and disparities persist
The study goes on to highlight that Black women-owned employer firms have experienced a growth rate three times all women-owned businesses — in part supported by diversity programs and movements like Buy Black, according to their findings.
“There was a concerted effort to support Black/African American businesses and communities after the killing of George Floyd,” read the report’s key statistics on Black women. In 2020, activists affiliated with the Black Lives Matter movement called on consumers to close the revenue gap for Black entrepreneurs by spending their dollars at Black-owned businesses. “The growth of Black/African American women-owned employers surged between 2019 and 2024, at 51.2%, compared to all women, at 17.2%.”
But the report also noted that the growth for Black and Latino employers has cooled, with more recent political changes potentially adding to that slowdown.
“That wave has diminished to a large extent,” Stengel said of the support for Black-owned businesses that exploded during the pandemic. “And we’re not going to really see it right now because of the DEI executive orders.”
Trump’s administration has called diversity, equity, and inclusion programs, prioritizing opportunities for underrepresented groups, “radical and wasteful.” Businesses like Target and Amazon have also pulled back on DEI initiatives since the presidential election.
This month, the US Small Business Administration announced agency-wide job cuts and priority shifts under the Trump administration.
“The agency has veered off track — doubling in size and turning into a sprawling leviathan plagued by mission creep, financial mismanagement, and waste,” said SBA Administrator Kelly Loeffler in a press release. Several grants are being terminated including the Community Navigator Pilot Program that awarded funding to small businesses in underserved areas.
“Just like the small business owners we support, we must do more with less,” Loeffler continued.
