A new report produced by Asset Funders Network (ANF), in collaboration with Duke University’s Samuel DuBois Cook Center on Social Equity and Closing the Women’s Wealth Gap (CWWG), reveals that while data shows women-owned businesses are growing in number, the businesses are typically smaller in size and generate lower revenues and profits for their owners and employees.
The report, Unlocking Assets: Building Women’s Wealth Through Business Ownership, is the third in a series that builds off AFN’s original 2015 publication, Women & Wealth, which explores how the gender wealth gap impacts women.
Why the focus on women business owners?
Nationwide, households are increasingly reliant on women’s earnings—in 2015, nearly two out of three mothers in the U.S. were their family’s sole, primary, or co-breadwinners, contributing at least 25% of household income. The increasing relevance of women to the long-term financial security of American families is both an opportunity and a challenge for women responsible for their household’s financial security.
While business ownership serves as a wealth-building tool for women, the current prevalence of gender disparities in wealth, often the result of systemic drivers, remains a central challenge facing women across the country. The new report outlines the underperformance of women-owned businesses are due to key challenges:
- Constrained access to business financing, including loans and equity investments
- Lower levels of approved business financing
- Initial lower levels of overall wealth, particularly for women of color
- Less cash to start which limits the types and scale of businesses women own
- Occupational segregation, which limits the sectors within which women are starting businesses
- Limited access to mentors, business networks, and markets
- Lack of access to business education and training
Unlocking Assets describes the gender wealth gap, surveys prior research on the relationship between business ownership and wealth, highlights differences in both the number and performance of women-owned businesses compared to those owned by men, and outlines key challenges preventing more women-owned businesses from producing wealth for their owners.
“The data in Unlocking Assets shines a bright light on the barriers faced by women, especially women of color, related to starting and growing wealth-building enterprises,” said Joseph A. Antolín, AFN Executive Director. “Because of these barriers, women business owners are currently prevented from achieving economic security and reaching their full potential. Unlocking Assets provides demonstrated solutions that reveal we can make a difference.”
Despite the rapid growth in women’s business ownership in recent decades, a substantial gender gap persists in business performance when measured by survival rates, profits, employment, and annual sales revenue.
Unlocking Assets elevates and lays out the strategies and successful practices of strategically influential and innovative programs and investments, addressing the key challenges that impact women’s ability to start and grow wealth-building businesses
The financial security and overall well-being of families increasingly rests on the shoulders of women. As such, long-term economic security for women and their families requires that women not only have access to higher incomes, but also to wealth-building opportunities. Unlocking Assets makes the case that for business ownership to serve as an effective pathway to wealth accumulation for women, as opposed to an employment strategy, core obstacles—limited access to capital, mentors and networks, business education and training, along with occupational segregation—must be addressed.
Source: PR Newswire