The approximately 280,000 women-owned businesses in New Jersey are expected to generate nearly $55 billion in annual revenue and will provide jobs for just under 270,000 full-time employees this year.
Those numbers may sound good, but they are not.
According to the annual State of Women-Owned Businesses Report commissioned by American Express, those figures mean New Jersey is ranked No. 41 in the nation when it comes to economic clout by its women-owned businesses.
The ranking was derived in a state-by-state comparison of those three economic indicators since 2007.
Since 2007, New Jersey ranks No. 26 in overall revenue growth, but No. 33 when it comes to the number of women-owned businesses and No. 44 in terms of jobs created.
Barbara E. Kauffman, president-elect of Executive Women of New Jersey and executive vice president and chief operating officer of the Newark Regional Business Partnership, said the numbers show there still is plenty of work to do in the state.
“It is important to recognize how far we’ve come in terms of increasing gender parity in leadership and entrepreneurship across the state and across the country, but we cannot forget that there is still a tremendous amount of work to be done,” Kauffman said.
“Women entrepreneurs need advocates and mentors to continue to support their work and encourage their ideas.”
The number of women-owned businesses has increased 31 percent in the state since 2007, according to the study. But the number has only increased 2 percent over the last year.
“While we are happy to see any growth in the number of women-owned businesses, it is still disappointing to see that New Jersey ranked 33rd in the growth of women-owned firms since 2007, 44th in growth of jobs created and 26th in growth of firm revenues,” Kauffman said.
“With the highest population of educated women in the country, New Jersey should be ranked much higher.”
Rana Shanawani, executive director of the Women’s Center for Entrepreneurship in Chatham, said New Jersey women-business owners may be more challenged in growing revenues as compared to other states.
“Thumbtack and the Kauffman Foundation surveyed thousands of small businesses about local requirements for hiring, regulations, zoning, licenses, health insurance and training,” she said. “Sadly, New Jersey received scores from ‘B-’ to ‘D+’.
“I think that women, in particular, get hit hard by business climate challenges, because we are still dealing with work-life balance issues that men may not be. The problematic business ecosystem becomes an addition burden that slows down women-business owners.”
Yet, when women-owned businesses are given adequate resources and support, research shows that they perform twice as well as male-owned companies, said Alfa Demmellash, co-founder and CEO of Rising Tide Capital in Jersey City.
“We’ve witnessed firsthand our entrepreneurs increase business sales by 112 percent within two years,” she said.
Additionally, while the number of businesses owned by minority women has grown by nearly three times that of all women-owned businesses over the past decade, with women of color accounting for 47 percent of all women-owned businesses, Demmellash said more equitable access to capital would have a more significant impact on New Jersey’s economy while lifting many out of poverty.
“Companies with a woman CEO only receive 3 percent of venture capital dollars, and this disparity is far worse for women of color,” she said. “Nearly 90 percent of our entrepreneurs are minorities and 70 percent are women, and we see that access to capital continues to be the primary reason many would-be entrepreneurs are unable to get their idea off the ground.”
Nationwide, the numbers are more optimistic.
According to the report, the number of women-owned businesses has increased 31 times since 1972, the first time the U.S. Census Bureau provided data on minority- and women-owned businesses.
Revenues, meanwhile, have increased 217 times, to nearly $1.8 trillion.
Julie Tomich, senior vice president of American Express Global Commercial Services, said the numbers speak to the potential of women-owned companies.
“This new data demonstrates not only the remarkable impact women entrepreneurs have on our economy when it comes to creating jobs and generating revenue, but also the growing role of women-owned businesses in our communities,” she said.
“Over the past 11 years, we’ve seen women’s entrepreneurship and economic impact increase — especially among the growing number of women-owned companies that generate more than $1 million in revenue.”
Women-owned businesses generating revenues of more than $1 million increased 46 percent over the past decade, versus just 12 percent of all U.S. businesses.
While these businesses make up just 1.7 percent of all women-owned businesses, they now account for 68 percent of total employment and 69 percent of total revenue among all women-owned businesses.
The states with the fastest growth rates of women-owned businesses are Florida, Georgia, Michigan, Tennessee and South Carolina.