Woman-Owned in Capitalistic America

50% of women-owned businesses are owned by women of color. From unequal access to capital to societal biases, the journey for women in business is marked by both remarkable achievements and persistent challenges.

The rise of women-owned businesses is a testament to the resilience and creativity of women across the United States. As more women step into entrepreneurship, they contribute significantly to the economy, bringing diversity, innovation, and fresh perspectives to various industries. However, despite their growing presence, women business owners continue to face significant barriers, particularly within the capitalistic framework that has historically marginalized them. From unequal access to capital to societal biases, the journey for women in business is marked by both remarkable achievements and persistent challenges.

The Rise of Women-Owned Businesses

In recent decades, the number of women-owned businesses has skyrocketed, contributing billions to the U.S. economy and creating millions of jobs. Consider these statistics:

  1. 12.3 million women-owned businesses currently operate in the United States, accounting for 42% of all U.S. businesses.

  2. Women-owned businesses generated $1.8 trillion in revenue in 2020, a testament to their significant economic impact.

  3. Between 2014 and 2019, the number of women-owned businesses grew by 21%, compared to only 9% growth for all businesses.

  4. Women of color are driving much of this growth. 50% of women-owned businesses are owned by women of color, and between 2014 and 2019, businesses owned by women of color grew by 43%.

Despite these impressive numbers, women entrepreneurs face many challenges that prevent them from achieving full equality and parity with their male counterparts.

Barriers to Equality in Capitalistic America

Though women have made strides in the business world, they still face several barriers rooted in systemic issues within capitalist structures. These barriers impact their ability to grow their businesses, access funding, and break into industries traditionally dominated by men.

1. Access to Capital

One of the most significant hurdles women business owners face is limited access to capital. While starting and growing a business often requires substantial financial backing, women are disproportionately denied loans and investment opportunities compared to men. Here are some key facts:

  • Women receive just 2.3% of venture capital funding in the U.S., despite owning nearly half of all businesses.

  • Female entrepreneurs are also more likely to start businesses with less capital, contributing to slower growth and lower revenue potential compared to male-led businesses.

  • Studies show that women-owned businesses are 38% less likely to receive bank loans than their male counterparts, and even when they do, they tend to receive smaller loan amounts.

This discrepancy in access to funding is often due to unconscious biases, risk perceptions, and the historically male-dominated nature of the venture capital and financial sectors. Without equal access to capital, women struggle to scale their businesses and compete with male-owned firms.

2. Systemic Biases and Discrimination

Systemic sexism continues to play a role in the business landscape. Gender stereotypes, such as the perception that women are less capable leaders or more risk-averse, persist and create significant hurdles. Some key insights include:

  • A study found that 61% of female entrepreneurs report facing gender-based discrimination, whether in securing loans, negotiating contracts, or being taken seriously by investors.

  • Women are often overlooked for leadership roles in business, further perpetuating the stereotype that men are better suited for positions of power, which influences the availability of capital and support for women-led businesses.

This culture of bias creates a self-reinforcing cycle: fewer women in leadership and decision-making positions means less visibility and support for women entrepreneurs overall.

3. The Double Burden: Work and Family

The "double burden" of balancing work and family responsibilities disproportionately affects women, including those who own businesses. In a capitalistic society that values productivity and profit, women are often expected to juggle multiple roles without adequate support. This creates additional pressure for women entrepreneurs.

  • On average, women still perform 60-70% of unpaid caregiving work in households, even when running their own businesses. This includes child-rearing, elder care, and household management, leaving them with less time and energy to devote to their businesses.

  • Women business owners are twice as likely as their male counterparts to cite family responsibilities as a barrier to business growth.

This inequitable division of labor limits women’s opportunities to fully engage with and expand their businesses. It also creates additional stress, making it harder for women to thrive in both their personal and professional lives.

4. Industry Segregation

Women-owned businesses tend to be concentrated in industries that traditionally generate lower revenue, such as retail, health care, and education. In contrast, men are more likely to own businesses in higher-revenue sectors like manufacturing, construction, and technology. This industry segregation reinforces economic disparities between men and women in business.

  • Women own 62% of businesses in industries like health care and education but account for just 23% of businesses in high-growth industries like technology.

  • Women of color, in particular, are overrepresented in low-growth sectors, which perpetuates income inequality and limits opportunities for expansion and capital investment.

This segregation is often a result of societal norms and biases that steer women toward certain industries while discouraging them from entering traditionally male-dominated fields. As a result, women-owned businesses often face lower growth potential and profitability.

Addressing the Barriers: Toward Equity and Inclusion

While the challenges for women entrepreneurs in capitalistic America are considerable, there are promising solutions that can help level the playing field. Here are some steps that can address these barriers and create a more equitable business environment for women:

  1. Improving Access to Capital: Programs and initiatives that prioritize funding for women entrepreneurs, such as government-backed loans or investment funds specifically aimed at women-owned businesses, are essential. Increasing diversity within venture capital firms and financial institutions can also help reduce bias in funding decisions.

  2. Workplace Flexibility and Support: Providing better support for women balancing family responsibilities—such as affordable childcare, flexible work hours, and parental leave—can help women entrepreneurs thrive without sacrificing their businesses or families.

  3. Mentorship and Networking: Encouraging mentorship and networking opportunities for women in business helps build confidence, develop leadership skills, and create pathways to resources. Women-focused business communities and initiatives can create more opportunities for connection and growth.

  4. Challenging Gender Norms: Creating educational programs and initiatives that challenge traditional gender roles and encourage women to enter high-growth, male-dominated industries is critical for breaking down industry segregation. These programs should also work to destigmatize women in leadership roles.

Conclusion

While women entrepreneurs have made impressive strides, systemic barriers within capitalistic structures continue to impede their full potential. From limited access to capital to the double burden of work and family, women face unique challenges that require targeted solutions. By addressing these issues and promoting greater equity, we can create a business environment where women not only survive but thrive, contributing fully to economic growth, innovation, and the future of entrepreneurship in America.

-Kaci Smith, LMFT

I am a licensed psychotherapist and mom in California. I am passionate about bringing women together through mutually empathic relationships that foster healing and growth. I run online women’s therapy groups year round.

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