There is still a very, very, very, very long way to go before women truly become equal competitors in the business arena, but it would be silly to say that things are not going in the right direction. In New York City, a trend can be observed where women entrepreneurs are entering pretty much every industry in style, founding businesses and starting to play the game. And while the Big Apple is definitely gaining the most momentum of all American cities, it is actually not the city where women business owners generate the most revenues.
It is not even close. This is just one of the findings made by a report called Breaking Through: Harnessing the Economic Potential of Women Entrepreneurs. The report was done by the Center for an Urban Future and aided by Capital One’s Future Edge initiative.
The Center for an Urban Future is a think tank based in NYC whose mission is to identify the critical challenges and opportunities that the city is facing New York and other cities. Its focus is on expanding local economies, diversifying them along the way and enabling working-class and low-income neighborhoods to tackle their problems more efficiently.
Capital One’s Future Edge Initiative is a program which will put $150 million in grants and initiatives to help empower an increasing number of Americans to succeed in an economy that was never as fluid as it is today. As its name suggests, the study and the report they have completed together dives deep into the surge of women entrepreneurs in American cities over the period between 2002 and 2012 (the last for which they could find conclusive, verified data). Due to the nature of The Center for an Urban Future, the city of New York was examined in most detail, but this does not mean they had not looked at other major urban centers in the United States. More precisely, they looked at America’s largest 25 cities.
One of the most interesting things their study discovered is that New York City is not even in the Top 10 of cities where women generate the most revenues annually. The city that topped the list was Dallas where women business owners on average generated $198,599 in revenue. San Antonio came in second with $191,223, Fort Worth was third with $186,435 and Houston came in fourth with $181,122. Trailing four Texas cities was San Fransicso, in turn followed by Indianapolis, Boston, San Diego, Phoenix and Seattle. New York City was only 18th, with the average annual revenues of $128,268.
A probable reason for this is the overall large number of women-owned businesses which is by far the greatest in the country. For instance, there were 413,899 women-owned businesses in NYC in 2012 to just 52,798 in Dallas. One of the most positive findings of the study is that the number of women-owned businesses is growing rapidly, especially in major metro areas. For example, while in 2007 the percentage of NYC private businesses owned by women was 33 percent, in 2012 it was 40 percent. We do not have the numbers for 2016 yet, but we are certain it will be a number bigger than 40.
Another very interesting finding of the study has to do with investments in companies with female founders. The latest available data is from 3Q 2015 and it shows that only 16.9 of all venture capital deals go to firms with a female founder. This is in New York City, mind you. In Boston this is 14.8 percent and in San Francisco, usually considered a progressive, liberal city, this percentage is lower, at only 12.1 percent.
In short, there is room for improvement. A lot of room for improvement. This is especially true if you consider the fact that around 90 percent of all women-owned business in the United States have no paid employees. According to last available data, this means that almost 9 million companies owned by women in the U.S. employ no additional people besides the founders. If just a quarter of them found the way to employ just a single person, this would create more than 2.2 million new jobs. These are staggering numbers. Think about them.