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New Generation of Women Entrepreneurs Achieving Business Success
Research conducted in 2000 by the Center for Women’s Business Research (formerly known as NFWBO—National Foundation for Women Business Owners). Funded by National NAWBO sponsor—First Union.

Gender differences are getting smaller, but access to and use of capital remain key issues

Washington, DC –Women-owned firms established within the past decade are making substantial contributions to the economy and are poised for continued growth in the future. They have reached the same level of business achievement as women-owned firms started in the past, and are more likely to be oriented toward future growth than their predecessors, according to a new analysis from Center for Women’s Business Research (founded as the National Foundation for Women Business Owners), which was underwritten by First Union Corporation.

Thirty-eight percent (38%) of women business owners who have started their firms within the past decade have already achieved at least $500,000 in annual revenues. Furthermore, 42% of the new generation women business owners indicated that they are striving for continued growth over the next five years as they expand their businesses. This compares to 25% of women owners of firms that have been in business two decades or more. In this respect, the new generation female business owners are similar to their male counterparts (49% of new generation men business owners have growth-related future goals.)

Women who founded their businesses in the nineties are more like their male cohorts than previous generations of women business owners in several other ways. "The new generation of women entrepreneurs appears to be narrowing the business revenue gap," said Nina McLemore, Chair of the Center for Women’s Business Research and President of Regent Capital. "It appears that among businesses started within the past decade, there is no significant gender difference in the share of firms with $500,000 or more in revenues."

Women-owned businesses established in the last decade are making significant economic contributions, at the same overall level as their predecessors. "The study found that one-quarter (24%) of women-owned firms started less than 10 years ago now have at least 20 employees. That compares with 23% of firms aged 10 to 19 years, and 29% of firms aged 20 years or older," added McLemore. "Similarly, 38% of these new generation businesses have revenues of $500,000 or more, compared to 39% of firms started 10 to 19 years ago, and 34% of those in business for 20 or more years. While this analysis cannot directly compare businesses at a similar period in their growth cycle, the fact that the new generation of women business owners has reached this sales level at an early stage in their business development – along with their outlook on growth and their appetite for capital – may indicate that the new generation of women-owned firms is poised to make an even greater economic contribution in coming years."

Many women entrepreneurs in the new generation are actively seeking capital for their businesses (41% of women who started their businesses in the past 10 years compared to 25% of women with businesses 20 or more years old have sought capital during the past year), and are more likely to be concerned about access to capital than their more established counterparts.

"At First Union, we know that concerns about access to capital remain a key issue, and that women continue to use smaller amounts of capital to start their businesses than men. Among those who have started or acquired their firms within the past decade, 43% of the women used less than $10,000, compared with 29% of the men," said John Guy, Senior Vice President and Small Business Segment Executive Director for First Union. "To combat this, First Union has implemented financial and educational programs that specifically reach out to women business owners, providing education and strategies for easier access to capital. First Union also has made a corporate commitment to loan a minimum of $5 billion to women-owned businesses through 2005."

The new generation of women entrepreneurs appears to be better equipped for success than their predecessors of two decades earlier. Women who started or acquired their firms within the past ten years are more highly educated than women who have owned their firms for 20 or more years, and have higher levels of pre-entrepreneurial management experience. Fully 45% of women who have become business owners in the past decade have at least a bachelor’s degree, compared to just 26%
of those who have been in business for 20 years or more. Thirty-eight percent (38%) of the
new generation of women business owners held an executive, senior or middle management position in their pre-entrepreneurial career, compared to just 20% of women who have owned their firms for 20 years or more.

"The great news here is that the new generation of women entrepreneurs is more likely to have started a business that is related to their previous career. Over half (51%) of those who started their firms within the past 10 years indicate their business is closely related to their previous career, compared to 33% of those who started their firms 20 or more years ago," said Myra Hart, Center for Women’s Business Research Vice Chair and Harvard Business School Professor. "This is positive because we know that the more closely related the business is to the owner’s previous work experience, the greater the likelihood of success."

The executive report, The New Generation of Women Business Owners, is available at no charge on the Center’s website, HYPERLINK "www.womensbusinessresearch.org" \l "http://www.womensbusinessresearch.org" www.womensbusinessresearch.org . For further information, contact: Center for Women’s Business Research, 1411 K Street, NW, Suite 1350, Washington, DC 20005-3407, phone 202-638-3060, fax 202-638-3064, e-mail info@womensbusinessresearch.org.

Center for Women’s Business Research (founded as the National Foundation for Women Business Owners) is a nonprofit research institute focusing on women business owners and their enterprises worldwide. The Center is recognized as the premier source of knowledge on women business owners and their enterprises by corporations, policy makers, financial institutions and the media. Up-to-date intelligence about women business owners and their enterprises worldwide is documented in the Center’s original research and analysis.

First Union Corporation (NYSE:FTU), with $246 billion in assets and stockholders' equity of $16 billion at June 30, 2001, is a leading provider of financial services to 15 million retail and corporate customers throughout the East Coast and the nation. The company operates full-service banking offices in 11 East Coast states and Washington, D.C., and full-service brokerage offices in 47 states and internationally. Online banking and brokerage products and services can be accessed through HYPERLINK "www.firstunion.com" www.firstunion.com .

Four charts follow this release.
Methodology: The data for this analysis was drawn from several studies conducted between 1996 and 2000, as noted below. Thus, entrepreneurial generation is referenced from the year of the study rather than the current year, 2001.

Data for the Personal Characteristics, Professional Experience, and Business Characteristics sections is drawn from the 1997 Paths to Entrepreneurship Survey. This survey was conducted in September, 1997, among a nationally representative sample of 800 business owners – 650 women and 150 men. Among these 650 women, 243 had started or acquired their firms within the past decade – 37% of the sample; 256 had started or acquired their firms within the past 10 to 19 years – 39% of the sample; and 151 had started or acquired their firms 20 or more years ago – 23% of the sample. The sampling errors for sample sizes of 243, 256, and 151, respectively, are ±6.3%, ±6.3%, and ±8.2% at the 95% level of confidence. This means that, 95 times out of 100, survey results will be within 6.3% and 8.2% of true population values. For the men, 44 owned their firms for fewer than 10 years, 42 owned their firms for 10 to 19 years, and 64 owned their firms for 20 years or more. The sampling errors for the men-owned sample populations are thus ±15%, ±15%, and ±13%, respectively, at the 95% level of confidence.

In the section on Start-Up Business Financing, data comes from the Capital, Credit and Financing Survey conducted between May and June of 1996. Eight hundred (800) business owners were surveyed and quotas were used to ensure adequate representation of larger firms and women-owned firms for analysis. The survey results were weighted to their correct proportions for analysis – resulting in 288 women-owned firms and 512 men-owned firms. Among these 288 women-owned firms, 164 were established in the past decade (57%), 87 were established 10 to 19 years ago (30%), and 35 were established 20 or more years ago (12%). The sampling errors for sample sizes of 164, 87, and 35, respectively, are ±8.0%, ±10.8%, and ±18..0% at the 95% level of confidence. This means that, 95 times out of 100, survey results will be within 8%, 10.8%, and 18% of true population values. Among the men-owned firms, 245 were established less than 10 years ago, 136 were established 10 to 19 years ago, and 131 were established 20 or more years ago. This yields sampling errors of ±6.3%, ±9.1%, and ±9.1%, respectively.

Current Business Financing data is from the Business Financing & Confidence Survey conducted in July, 1998. A total of 607 nationally-representative, randomly-selected, business owners were interviewed – 392 women and 215 men. Business owners from large firms were disproportionately interviewed to ensure adequate numbers for analysis and the sample was weighted back to proper proportions. Among the women, 179 had become business owners in the past decade, 117 in the past 10 to 19 years, and 96 in the past 20 or more years. The sampling errors for sample sizes of 179, 117, and 96 are ±7.6%, ±9.1%, and 10.1% respectively, at the 95% level of confidence. This means that, 95 times out of 100, survey results will be within 7.6%, 9.1%, and 10.1% of true population values. Among the men, 89 became business owners in the past 10 years, 68 in the past 10 to 19 years, and 59 became business owners 20 or more years ago. The men-owned populations, respectively, have sampling errors of ±10.8%, ±13.0%, and ±14.0% at the 95% level of confidence.

For the section on Past and Future Business Growth, data comes from the 2000 Entrepreneurial Vision in Action Survey. Interviewing for this study was conducted nationwide between July and August, 2000. A total of 1194 business owners were interviewed – 602 women and 592 men. An attempt was made to sample equal numbers of growth and non-growth firms, and respondents were chosen based on the gender of the owner and the firm’s sales and revenue growth. Thus, the number of fast-growing firms or growth-oriented business owners is over-represented and may not be indicative of the entire population of business owners. Furthermore, a disproportionate number of business owners with larger firms were surveyed to ensure adequate numbers for analysis. The sample was weighted back to proper proportions, based on employee size and growth.

Among the 602 women surveyed in the 2000 Entrepreneurial Vision in Action Survey, 35% (213) started or acquired their firm within the past decade, 42% (250) started or acquired their firm 10 to 19 years ago, and 23% (139) started or acquired their business 20 or more years ago. The sampling errors for sample sizes of 213, 250, and 139, respectively, are ±7.0%, ±6.3%, and ±9.0% at the 95% level of confidence. This means that, 95 times out of 100, survey results will be within 7.0%, 6.3%, and 9.0% of true population values. Among the 592 men surveyed, 174 obtained their firms within the past 10 years, 217 obtained their firms in the past 10 to 19 years, and 201 obtained their firms 20 or more years ago. Thus, the sampling errors for the men-owned populations are, respectively, ±7.6%, ±6.9%, and ±7.1% at the 95% level of confidence.

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