Why Women are Starting Businesses at Record Rates

Americans are starting new businesses at unprecedented rates—in fact, more new businesses were spun up in 2023 than ever before. While this is tremendous news in and of itself, it’s also fascinating to note that the largest players in this growth game are women. Female entrepreneurs actually started 50 percent of the businesses created in 2023, according to data from Gusto; In 2019 that number was just 29 percent. These women-led companies brought in revenues of $2.7 trillion last year alone, which is no small feat for a sector of the population that was hit particularly hard during the pandemic. What’s behind these record numbers, and how can we keep them going? Let’s take a look.

Flexibility is Finally Attainable

In Gusto’s research, it was revealed that a staggering 70 percent of the women who started a business last year said it was because of the flexibility this allowed them to have. Other reasons included the need for supplemental income, the desire to build financial assets, and someone in the household losing a job. Women were especially concerned with having the flexibility to work how and when they want. And since women do carry more of a burden than men when it comes to childcare, this freedom is paramount to their success in a career—it allows them to work on their terms, stay home as needed, avoid paying for expensive childcare, and enjoy a better work/life balance.

Earning Potential Goes Up

In a country where women are still earning far less than men at the workplace, starting a business is one of the best ways for female entrepreneurs to reach their career goals. Businesses built by women pull in much higher revenue than those started by men, “and the average return on investment for women-owned companies was double that of men-owned businesses,” according to an article on Forbes.

How to Keep the Trend Going

It’s great to see this upward trend in female entrepreneurs, and we need to make sure we can continue on this track. Women still have a difficult time getting access to funding, despite generating 78 percent more revenue per invested capital than men. And the costs of childcare are still too prohibitive for many women to take the leap into entrepreneurship. To do their part, financial institutions can seek out professional relationships with female business owners; companies can push for paid family leave; and Washington can increase spending on Women’s Business Centers.

At ARF Financial, our seasoned loan consultants are here to help you capitalize on your business’s potential, offering fast access to the most innovative and flexible loan products available. From lines of credit to working capital loans and everything in between, we make business financing easy! That’s why we’re the #1 trusted source for restaurant loans, hospitality financing, retail funding and other small business loan products. Visit us today and see why thousands of small businesses across the country have turned to ARF Financial for all their business financing needs.

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