Numbers in the marketplace show that women-owned businesses are steadily on the rise. According to an American Express-sponsored 2017 study on the state of women-owned businesses, the report shows that, from 1997-2017, the number of women-owned companies grew by 114%, compared to the 44% national growth rate for all new businesses. (1) Women continue filing into the marketplace, filling a variety of gaps as they venture into entrepreneurship.
The forward momentum is so strong that there is no sign that women intend to retreat from this exciting wave. The main question women entrepreneurs may have is the top trends that they should anticipate when developing their startups.
The Top Anticipated Trends in New Women-Owned Startups for 2020
If you are considering launching a startup in 2020 or soon after, it may help you to know what awaits you in your industry and the overall marketplace. Here are some top anticipated trends for women entrepreneurs in 2020 and beyond.
The Rise in Women Entrepreneurship Is Making a Big Impact on the Economy
Female entrepreneurs drive economic growth, proven by the fact that women were the sole or majority owners of 12.3 million U.S. businesses early in 2018. Further, women start new businesses at a rate of 1,800 per day. (2) Female owned companies also deliver higher revenue with more than twice as high per dollar invested as businesses founded by men. Another positive note for future female entrepreneurs is that many female startup leaders are serial entrepreneurs who gain success with one company, sell it for a profit, and then start the process again, according to Forbes. (3)
Scaling Upward Remains a Challenge for Women Owned Firms
While women have broken down so many barriers in launching businesses, there remains the challenge of vertical growth. As women start companies at a breakneck pace, 90% of those companies have no employees other than themselves and fellow founders, compared to 82% of firms in the marketplace. Only 2% of women-run companies have 10 or more workers, which suggests that women stumble when it comes to scaling their businesses upward. This issue is most notable in venture-backed, high-risk, high-growth and high-return industries. Common fields in this arena include technology, science and business services. Women will need to continue to focus on ways to break through “glass walls” to take their aspirations higher and work to start high-growth and high-return firms. The likely solutions for this challenge involve a combination of women committing to this difficult path and the private and public sectors’ meaningful efforts to support and prepare female entrepreneurs to dive in and play a significant role in boosting the economy. It is important for women to consider launching a business in these areas to seek out support programs and services available to help them thrive in this vital area.
Solo Side Hustles and Independent Work Are Still Vital Paths to Success
Not all new businesses start in the same way. One frequent way that women find new business paths is through side hustles and other independent business ventures. Working as a “one-woman show” is nothing new for women who frequently juggle several life tasks at once, such as holding a regular job, parenting and caring for the family home. What’s one more task when it builds up the bank account and builds a reputation for reliability and expertise? Entrepreneurism is not bound by a single path, such as a five-person startup launched in someone’s garage or a hundred-person enterprise. One-woman operations allow entrepreneurs to define, refine and expand their business as they can, and as they choose to do so. Media Village shared the results of a Harris Poll reporting that 61% of employed women have a side hustle or are considering adding one in the future. (4)
Startups Focusing on Women’s Well-Being Still Flourishing
Just as women setting out to launch their own startups can use encouragement, so can women from all walks of life. Everyone facing struggles may welcome friendly and useful guidance from a trusted female business owner, making wellness enterprises of all kinds highly successful. Many of the world’s most profitable companies focus on helping people resolve real issues in their lives. (5) Anything that makes people’s lives more convenient, easier, healthier, or happier offers opportunities to women who have the respective expertise and passion. What’s more, companies specializing in FemTech, a rapidly emerging healthtech category set to become a $50 billion dollar industry by 2025, are already emerging to great success. (6) Areas in this niche industry largely involve fertility and reproductive technology. Women in business with specializations in healthcare and technology are the ideal candidates to lead the charge in this up-and-coming field.
Women Are Joining Forces to Gain Access to More Venture Capital Funding
Venture capital (VC) can give entrepreneurs and startups the financial boost needed to successfully launch a new business. VC is a type of private financing and equity provided by wealthy investors or financial institutions to startups and small businesses. While investors often work with entrepreneurs in a similar industry, that is not the rule. As of 2017, women received only 2% of VC dollars and seed amounts of 4-5% of all seed dollars, compared to the percentage found in male-only startup teams, who were awarded 83-85%, according to Tech Crunch. (8) Women are working to shrink the gap for their startups by teaming up and working together to help boost women-oriented startups make their way up the ladder, earning more VC dollars.
Self-Employment Offers Another Tract to Entrepreneurial Success for Women
Similar to side hustles, self-employment offers women a solo opportunity to developing a startup on their own. Women offer significant contributions to the country’s economy and are instrumental in changing the face and nature of the workforce. Such independence is particularly important amid the COVID-19 pandemic, which has left millions of Americans without employment due to layoffs and furloughs. (8) Independent of the fallout regarding the coronavirus, the occupational landscape is likely to change in the coming years, regardless. COVID-19 simply sped things up, as employers realize their employees can adapt to working at home, managing their own technology and workspace while potentially saving in overhead. Further, they can outsource certain work, such as writing, to freelancers and contractors. Women who make a name for themselves in their specific field can build on that success and ultimately parlay it into their own startup that comes loaded with clients and other connections. They can eventually become employer firms, taking on staff and working to employ other women while scaling up their companies to serve broader markets.
Millennial Women Are Entering the Women Owned Startup Arena
Millennial women are increasingly seeking new ways to earn an income and develop their place in the business landscape as entrepreneurs and business leaders for startups. As is often the case, millennials bring their own style to the startup world, embracing the latest technologies, strong communication strategies and interpersonal skills, implementing unconventional leadership approaches, and avoiding traditional and outdated models of hierarchy found in the corporate environment. Often striving to bring more meaning to the work environment through charity and community service, they also focus on work-life balance to keep workers happy, satisfied and productive. For them, workplace satisfaction and cooperation often mean more than a high salary and benefits. In startups, millennial women have more opportunity to set the tone in the workplace as a founding member or business leader. They have the power, passion and ability to create and foster a working environment that serves their clientele and their employees.
Political Issues Attract More Women Today
Since 2020 is a general election year, it is important to note that women have become increasingly passionate and vocal about the state of the world, especially how it impacts women. The personal has increasingly become associated with the political, and women seek a positive social impact in their personal and professional lives. Women increasingly seek out ways to take part in activism and politics regarding their work. National, state and local issues such as those involving healthcare and the gender wage gap hit close to home, so women-owned business leaders are often invested in working on behalf of fellow women.
Minority Women Are Making Strides in Entrepreneurial Pursuits
Latina and black female business founders have increased substantially in the past few years. As of 2018, Latina women in business have grown by 172%, as black women founders have grown by 164%. Minority women can speak to their respective communities, offering products and services perfectly suited to them since minority startup leaders understand their community members’ needs from a personal perspective. They also reach beyond their respective minority markets, generally tapping into women’s needs. Still, their ability to reach marginalized communities as experts and influencers offers them unique opportunities within those communities. (9)
Sustainability Remains a Huge Issue to Which Women Can Speak
As people continue to look at issues such as climate change and the planet’s limited resources, women can help wake up customers to the need for sustainability. Women can work in a huge variety of areas to address these issues with products and services, helping their audience understand how they can become part of the solution. The fashion industry, preventive healthcare, food, transportation, water, waste and finances are a few areas where women can help shed light on sustainable innovation.
Digitization Is Critical
Digitization has remained a conversation piece in overall anticipated business trends for several years. Amid the COVID-19 pandemic, the need for digitization has become crystal clear for everyone. Per the U.S. Chamber, anything possible to digitize should be digitized. (10) Employers were forced to require employees to work from home, adopting and adapting to an abrupt digital transformation. Now that workers have become accustomed to a digitally focused work life at home, they and their employers may prefer the arrangement, which would allow organizations to reduce overhead and other costs associated with a full-time staff on the premises.
The 2020 Trends in New Women-Owned Startups Show That Women Can Explore a Variety of Opportunities
It is an exciting time for women entrepreneurs to launch their startups. As technology offers unprecedented opportunities and women team up for capital, all women with an entrepreneurial spirit should explore the possibilities.