ASSETS Executive Director explains Lancaster’s overwhelming need for a Women’s Business Center.
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Women represent over 50 percent of Lancaster’s population, yet own half the number of businesses that men do locally. Nationwide, women-owned businesses increased 26.8 percent between 2007 to 2012, but still represent just over a third of overall business ownership.
These statistics are startling, but even more so when you consider the following evidence pointing to the economic and social value of underrepresented entrepreneurs:
According to a new report from the Center for Global Policy Solutions, despite being woefully underrepresented across the country, the number of businesses owned by women of color grew faster than almost every other demographic group during and after the Great Recession.
In fact, entrepreneurs of color (both men and women) were a key contributor to job creation (adding over 72 percent of all new jobs created) during those years while white-owned businesses lost almost 2 million jobs.
Underrepresented entrepreneurs, especially women and people of color, are a bet worth making as the U.S. figures out 21st century economics.
Unfortunately, this is a bet not being made by most financial institutions. According to the National Women’s Business Council, on average women start their businesses with half the amount of capital as men, use half the number of bank loans as men, and receive less than 3 percent of venture capital invested.
So why does this matter to Lancaster?
Ownership is one of the key ingredients in economic opportunity. Ownership of assets and businesses can increase women’s economic opportunities, and those of their families.
Indeed, more than 63 percent of women are primary or co-breadwinners of families in the U.S. according to The New Breadwinners: A 2010 Update. Almost 60 percent of children living in poverty in the U.S. live in a household headed by a woman.
Additionally, nationwide women consistently earn less than men and are more likely to be poor. In Lancaster County, women earn 59 cents for every dollar men earn, placing us as the sixth worst county in the state for pay equality and significantly below the national average, according to U.S. Census data.
To help address these disparities in economic opportunity and help increase women’s business ownership in Lancaster, Assets recently won a competitive grant to host a U.S. Small Business Administration-sponsored Women’s Business Center.
The center will continue Assets’ history of providing business training in both English and Spanish, but it will increase resources available for intensive business counseling and acceleration support for women-owned businesses with a focus on financial management and marketing support.
To engage a younger generation in entrepreneurship, the center recently co-hosted the Youth Innovation Challenge to spur new youth-driven business approaches to local challenges and has co-hosted two Cultivate Lancaster events to promote, support and network entrepreneurs in Lancaster.
The center will provide new tools and resources to help women compete for federal contracts, where just 5 percent of federal contractors are women-owned businesses – an extremely modest goal that took two decades to reach.
And perhaps most importantly, the center will help prepare women for financing based on the low financing rates cited above. Insufficient capital is one of the top reasons businesses fail early on, so having adequate access to financing is essential. Assets provides credit-building microloans for women (and men) and prepares and refers clients to other local lenders depending on need.
While women may be slowly catching up to men in traditional approaches to capital, they’re outperforming men in newer fundraising models like crowdfunding, according to “Leaning In or Leaning On?,” and they’re already more active on social media and more collaborative in their investing, according to Chance Barnett of Crowdfunder.com. They’re also more likely to use online platforms like etsy.com and ebay to access new markets and drive sales growth. Supporting women in utilizing these tools will also be key to their success.
Despite their challenges, across the board women are doing more with less. We’re committed to doing more to help them grow their businesses, their incomes and their piece of the local economy.
Jessica King is executive director of Assets, a Lancaster-based organization that seeks to create economic opportunity and cultivate entrepreneurial leadership in order to alleviate poverty and build vibrant, sustainable communities.