Natalie Rasmussen, left, and her mother-in-law, Marci Rasmussen, owner of Especially For You, your downtown florist, create floral arrangements at the Salt Lake City boutique on Jan. 12, 2021. (Scott G Winterton, Deseret News)
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SALT LAKE CITY — Utah’s economy and business environment have historically been ranked among the best in the nation, but new analysis reveals there could be room for improvement when it comes to owned businesses to women in the state.
Women-owned businesses play an important role in the US economy, employing 10.1 million workers and racking up $1.8 trillion in revenue, according to data from the US Small Business Association. Yet despite numbering 1.1 million in 2019, women-owned businesses only accounted for around 20% of all employing businesses across the country.
A recent analysis of the US Census Bureau’s Annual Business Survey by backgroundchecks.org determined the locations with the most women-owned businesses by metro and state.
Where does Utah rank – and which metros were included?
Overall, Utah ranks 45th among states, with 16% women-owned businesses. States following Utah included New Hampshire, Iowa, Idaho, North Dakota, and South Dakota.
Of the 100 largest metropolitan areas for which data is available, Salt Lake City ranked 85th, at 16.5%. Other Utah metros on the list include Provo-Orem with 15.9% and Ogden-Clearfield with 13.7%.
Hawaii has the highest share of women-owned businesses at 24.5%, with Virginia 23.9% and Colorado 23.8% ranking close behind.
The recent report is just one of many that have highlighted the inequalities that minority groups may face in the state. After Utah was ranked by WalletHub as the worst state for women’s equality for the fourth straight year, prompting Utah leaders to call for collective action. The Utah Women’s Leadership Project analyzed 17 key indicators in the areas of work environment, education, and health and political empowerment and next steps for advancement.
The nonprofit’s analysis reached similar conclusions to previous reports, but also highlighted key differences. The data, when broken down, can be more nuanced than it appears, said Susan Madsen, director of the Utah Women and Leadership Project at Utah State University.
A closer look at the Utah data
In the analysis, backgroundchecks.org recorded 11,054 women-owned businesses in the state, while data from the SBA district office in Utah indicates that more than 101,000 businesses are owned by women.
Why the contradiction?
The difference in the numbers represents how the data is collected and counted can significantly alter a result. The 11,054 women-owned businesses shown by the analysis represent only a fraction of businesses using data that represented employer businesses, excluding businesses without employees.
The exclusion disqualifies 90% of women-owned businesses across the country that have no employees, according to data from the US Small Business Association. Of Utah’s women-owned businesses, 90,500 have no employees.
And while expanding the scope may elevate Utah’s rank, the data may still not completely capture the full picture.
“There are different measures of female entrepreneurship and they contradict each other a bit,” Madsen said. “It’s really hard to find really good data, so that’s one of the things we’re working on to change.”
While business owners in Utah can indicate female ownership during registration, this box is rarely checked. The race or gender of business owners is not directly recorded by the state in the process, which can make it difficult to access comprehensive data.
“We can’t get the message out to all of these women who are starting their businesses because we don’t collect gender information, and as a result there are a lot of businesses in Utah that are starting up and failing” , Madsen said. “We don’t find the people to help them.”
Obstacles to female entrepreneurship
Equitable access to capital
Women only receive 16% of conventional small business loans and 17% of SBA loans, despite 30% of businesses being owned by women. Studies also indicate that women may be more reluctant to take out loans or take on debt than their male counterparts, according to Madsen.
Insufficient jobs in federal contracts
The US federal government, the world’s largest buyer, awards less than 5% of federal contracts to women-owned businesses, according to a previous report by the Utah Women’s Leadership Project.
Access to specialized business advice and training
Despite the multitude of resources available through the Utah Women’s Business Center, many Utah women business owners are unaware of the center’s existence. Lack of representation in state industries may also contribute to lack of mentorship for women seeking to enter the workforce in these fields, Madsen said.
Advancing higher education for women in male-dominated industries can also improve access, she added.
“We still have a lot of businesses that start up and don’t grow and fail, but there really is a formula in terms of businesses that tend to be more successful and have more education about it,” said Madsen said.
Not only have women in the workforce been hit harder by the COVID-19 pandemic, but 64% of women-owned businesses have seen their revenues decline and around 25% – 5% more than those owned by men. — have completely shut down, according to research by Inc.com.
“Women tend to gravitate toward certain types of businesses and these are the types of businesses that have been hit the hardest,” said Ann Marie Wallace, Utah Women’s Business Center.
Top employment industries include healthcare, accommodation and food services, and administration and support. These three sectors account for 47% of total industry employment by women-owned businesses, according to the US Small Business Bureau.
Other barriers identified by the US Small Business Bureau include:
- Women are more likely than men to run home-based businesses.
- Women with children were more likely to have a home-based business.
- Men with children were less likely to operate their business from home.
- Women with children at home were less likely to work in high-growth industries, while the reverse was true for men.
- Women with a university degree were more likely to work in high-growth sectors such as construction and accounting/reservation services; while men in high-growth industries tended to have proportionally fewer college degrees.
What can be done?
Solutions include increased education for women business owners, increased awareness and access to resources such as the Women’s Business Center, creating incentives for contact work with women-owned businesses, mentoring , advocacy and networking opportunities.
“If a woman wants to start a business, she shouldn’t have any obstacles in front of her just because she’s a woman. There are still obstacles out there and some of them are unconscious biases and other things are flat out wrong and people can make changes to that,” Wallace said.
To learn more about resources available to women-owned businesses, visit SBA.gov’s Women’s Business Centers webpage.