In recent years, women small business owners have made significant strides in launching organizations and achieving entrepreneurial success. Women continue to open businesses at almost twice the rate of men, CNBC reported. In just 12 months, earnings from women owned organizations increased by 54 percent from 2012 to 2013.
According to a recent report, the trend is likely to continue as women in business help improve the U.S. economy as a whole. The Guardian Small Business Research Institute conducted a study on the role of women in business and predicted that female owned enterprises will create around 5 million new jobs by 2018. This represents nearly a third of all positions that are expected to be added to payrolls during that same time, the U.S. Department of Labor projected.
Women increase loan applications, profit margins
CNBC stated that in 2013, the number of women led small business loan applications shot up to 2,985, nearly double the 1,501 applications seen in 2012. This and other statistics point to potential company expansions over the coming years, including possible additional hiring and internal investments. Furthermore, these findings indicate a general improvement in the U.S. economy and increased confidence rates among entrepreneurs.
Loan approval rates are also up from last year, showing a 7 percent uptick, bringing the total success rates among women in loan applications to 31 percent. However, male owned companies still see greater approval rates – 39 percent in 2013. One reason women may not be experiencing the same level of success in this category is that they are launching new businesses, and many traditional lenders are hesitant to disburse loans in moves they may see as risky investments.
Improving their chances of loan approval is the rise in credit scores among women small business owners. The average credit score for this demographic in 2012 came in at 592 – the next year, this had increased to 610, surpassing the important 600 point benchmark, which is generally considered to be a highly valuable asset for individuals and business owners alike.
Gross operating margins also contributed to closing the gender gap among business owners and leaders. In 2012, gross operating margins ranked at 40 percent for men and 29 percent for women. One year later, male owned businesses increased their gross operating margins to 62 percent, while women increased their profit margins to 59 percent. Though women are not quite at the same level as their male counterparts in this particular realm, the 30 percent jump is a solid sign that women are making strong progress in business as the gender gap closes among according to several key indicators.
Driving factors in gender specific improvements
With such serious advancements found among women in business, researchers sought to understand why and how the gender gap is closing. One of the main driving factors in this evolution is that more women than ever are enrolled in universities and colleges, outstripping men in earning higher education degrees.
Additionally, as social media and digital markets continue to rise in popularity, business owners have taken advantage of using these platforms to lower operation costs, making it easier to save money and operate in a more affordable manner. Social media outlets and new technology have helped women owned businesses become more competitive as decision makers are able to drive in new traffic to their sites on a consistent basis.
Those who are interested in exposing themselves to new technology and business equipment may want to explore equipment leasing options. National Funding provides these services, as well as working capital for entrepreneurs around the country.