By Ann Farmer
Thursday, October 9, 2003
In five western states where women have little representation in the professional and political sectors, female-owned small enterprises are doing particularly well. A study suggests this is because women are finding less resistance there.
(WOMENSNEWS)--In the 19th century, newspaper editor Horace Greeley exhorted young men seeking opportunities to head west. Today, after a recent report by the Center for Women's Business Research, he might be giving that advice to women.
The report shows that female-owned businesses in five western states--Idaho, Wyoming, Utah, Nevada and Arizona--expanded at an average rate of 28.8 percent between 1997 and 2002, more thantwice the 14 percent expansion rate for women-owned businesses in the nation during that same period.
In addition, says Dr. Sharon G. Hadary, executive director of the research center that published the report, the size and revenue of female-owned enterprises in these five states are expanding by more than two-and-a-half times the national rate (sales growth was 116.4 percent and employment growth was 76.3 percent) of female-owned businesses.
In determining why female-owned businesses are exploding in this region, the study, "Location, Location, Location," released in late September, noted some generally business-friendly conditions in all five states during this period. These included above-average population growth, greater federal financial support for small businesses, lower-than-average prevailing wages and a greater reliance by local governments on sales taxes than corporate and personal income taxes.
The Washington, D.C.-based Center for Women's Business Research, which has been analyzing this type of data for the past 15 years, cites some gender-specific factors that, at first glance, seem counter-intuitive. These include lower-than-average employment of women in professional and managerial positions and fewer women active in politics or holding an elected office than in other states. The study suggests that--amid this low representation of women in the professional and political realms--women may be striking out on their own because it's the path of least resistance.
"There aren't the opportunities to join big corporations and move up, to become leaders in business that way," says Hadary. "If you're a woman in those five states, the way that is most open to you to achieve leadership and prosperity is through entrepreneurship."
Nancy Mitchell, executive director of the Women's Business Center at the Salt Lake Chamber, a private, non-profit organization that represents businesses statewide, in Salt Lake City, echoed that sentiment on Monday at the 19th Annual Utah Women's Conference. Mitchell said women in Utah continue to hit a glass ceiling when it comes to advancing to top-level positions within big corporations.
"So if they have ambition or creativity or entrepreneurial ideas, they move ahead by starting their own companies," she said.
In making her remarks, Mitchell challenged an assertion U.S. Labor Secretary Elaine Chao made at the conference that women across the U.S. have shattered the glass ceiling in corporations.
Female entrepreneurs are also creating job opportunities, with employment by their businesses in the five states growing at an average rate of 76.3 percent, far ahead of the average 29.9 percent rate of job creation by female-owned enterprises elsewhere in the country.
Business owned by women are concentrated in the service and retail sectors because of the low cost of entry, a trend that female entrepreneurs in the five-state study area are bucking, according to Robert J. Blaney, the district director of the Phoenix office of the U.S. Small Business Administration, which is headquartered in Washington, D.C.
"From construction companies to marketing firms, you name it, women are doing it," said Blaney.
In the past year, more than 1,500 went through Arizona's two Small Business Association offices in Phoenix and Tucson, seeking counseling, training and access to micro lenders, according to Blaney. "Fifty percent of this past year's (Small Business Association) micro loans went to women," he added.
"Access to capital is critical for small-business growth," said Joy Ott, national spokesperson for Wells Fargo's Women's Business Services program, one of the top five Small Business Administration lenders in the nation. The San Francisco-based Wells Fargo and Company underwrote the study, which also demonstrated that all five states experienced higher-than-average levels of federally guaranteed small business loans ($70 per capita versus $47 per capita elsewhere) during the 1997-to-2002 study period.
Chela Flores Harding, 58, can vouch for the necessity of a helping hand. When she opened the La Paz Funeral Home in Phoenix in 2001 with $61,000, half of that came from Chicano's Por La Causa's Small Business Association micro lending program, the largest micro lender in Arizona. "There's no way I could have done it without them," Harding told Women's eNews. "It's really rough to dig up financing."
Harding, a child of migrant workers who had been the top sales person in the cemetery business before launching her own business, said she decided to go out on her own because her husband kept pointing out that she was getting everybody rich but herself. Her business went from pulling in $3,000 in revenue in its first month to an average of $60,000 in recent months.
After the study's bullish findings about female-owned businesses in the study states, Wells Fargo announced on Sept. 24 that it's increasing its current lending to female-owned businesses. The financial services giant will raise the amount it lends to female-owned enterprises by $5 billion, to $20 billion over the next 10 years.
Ann Farmer is a freelance writer in New York City.
Center for Women's Business Research--
Research Summary: "Top 5 States for Growth in Women-Owned Businesses in Western United States":
Women Entrepreneurship in the 21st Century:
The La Paz Funeral Home: