U.S. Business Founders Becoming More Diverse, According to Census Bureau

Between 2007 and 2012, the number of women-owned businesses in the U.S. grew by more than 27 percent, according to data from the U.S. Census Bureau’s Survey of Business Owners. The agency reports that women owned about 9.9 million businesses in 2012, about 36 percent of all firms. In 2007, only 29 percent of businesses were owned by women.  Business ownership also appears to have become a bit more racially diverse during those years, with the share of minority business-owners growing from 21 percent to 29 percent. Much of the surge among women business owners appears to have come from women of color.

The report includes data on business ownership by gender, ethnicity and veteran status both by state and for the nation as a whole. A more complete version, with additional data on industry, firm receipts and employment, will be released in December.

This week’s release is the first update of the Census Bureau’s business ownership data since 2010, which provided a snapshot of activity in 2007. Toward the end of 2007, businesses were beginning to feel the effects of the Great Recession, though most of the impact was still to come. The current release covers 2012, a few years after the recession when the economy was beginning to recover. As CNN Money notes in an interview with Carla Harris of the National Women’s Business Council (NWBC), the surge in businesses owned by women of color may have been fueled by the disproportionate impact the downturn had on particular demographic groups.

 While the largest state economies (California, Texas, Florida, New York) unsurprisingly have the largest number of women-owned firms, Washington, D.C., Georgia and New Mexico had the highest percentage of women-owned businesses compared to men. Southern states led in the growth of women-owned businesses between 2007-2012, with Louisiana, Mississippi and Texas leading the country. Florida appears to be a hotspot of opportunity for women, ranking in the top five for total women-owned firms, share of firms and growth during the five-year period. Still, only about 39 percent of Florida firms were owned by women in 2012.

Women only owned more than 50 percent of businesses in three industries, according to analysis by NWBC. By far, the most women-dominated industry in 2012 was health care and social assistance, in which 64.5 percent of all businesses were women-owned. The other two, educational services (56.9 percent) and “Other services (except public administration)” (52 percent) had a much smaller share of female owners.

Access the data at: http://www.census.gov/econ/sbo/.