Some Serious Advantages to Operating a Woman-Owned Business in the 2020s

In a man’s world, it hasn’t always been easy for women in the workforce. It’s been even harder for a woman to get a potentially thriving business off the ground. But times have changed for the better. In the 2020s, many women business owners find themselves not only making good money but also winning coveted awards for their unique services and products. Included in these celebrations for a job well done are Chamber of Commerce awards and State Municipal Awards.

Says EDCO, suppliers of trophies and occupational awards, Chamber of Commerce Awards, and State Municipal Awards are intended to recognize the best of the best. That’s because when giving out such a prestigious award, organizers look at the big picture. Who has contributed the most to a city or town’s business sector as a whole? What things have they done other than providing great service and products that deserve recognition?

That said, while women continue to thrive in the 2020s workforce, what are some of the advantages of owning and operating a woman-owned business? According to a recent report by Business Woman Media and a study by the Women’s Business Enterprise Council, women are increasingly choosing to become business owners. Australia is said to lead the “Anglosphere,” with 32 percent of businesses, or about 700,000, owned by women. In the U.S., about 25 percent of all businesses are owned by women, or about 12.6 million. In the U.K., 17 percent of all businesses are owned by women, or about 1.5 million.

These companies not only employ more than nine million people but they are said to generate $2 trillion in revenues in the U.S. alone. Plus, women-owned companies are said to be thriving in every business sector. Think moving companies that hire big, burly men to heft all that furniture around are owned and operated mostly by men? Think again. A new study by movingcompanyreviews.com demonstrated that lots of moving companies are actually woman-owned businesses.

Less than ten years ago, women owned less than 500,000 businesses in the U.S. So then, what’s the cause of this massive growth? Are there specific advantages to being a female business owner? There are indeed. Here are just a few.

Easy Access to Government Contracts

Via the Small Business Administration or the SBA, the U.S. government awards around five percent of its contracts to female-owned and operated businesses. Maybe at face value, the figure appears to be small. But when you consider the massive amount of government spending and the many government departments where the contracts come from, the sum total of all business transactions ends up being in the billions of dollars.

For example, in 2015, women-owned businesses were granted five percent of the $90 billion that were allotted to the SBA. This amounted to around $4.5 billion. Fast forward to 2019, when the Departments of Defense and Energy awarded more than $11.2 billion in contracts to women-owned businesses.

Also, there are said to be four more departments that granted contracts that year to women-owned businesses that totaled more than $3 billion each, with the Department of Justice dishing out another $1.5 billion in taxpayer-funded work orders.

Aside from these lucrative contracts, close to 80 departments planned to increase the amount. Five percent of these contracts were allocated to women-owned businesses. If a woman business owner feels that a contract should have gone her way, she has the right to pursue a “bid protest.” This is why it’s important for all women-owned businesses to be aware of the bid protest process.

Easy Access to Government-Backed Loans

Says Business Woman Media, the SBA typically does not issue loans. It does, however, back several loans specifically geared for women or female-owned and operated businesses. What this means is if you should happen to default on your loan, the agency will pay a certain portion of the cash back to the lender.

It’s because of this financial guarantee that banks and other lenders will be more willing to finance a woman-owned business that falls under the jurisdiction of the SBA program. Once you qualify for the loan, you are expected to pay a relatively low-interest rate of around 5 to 10 percent over a period of about seven years or more.

In the interest of catering to a larger variety of business interests, a female business owner has a choice of more than just one SBA-backed loan. For example, an SBA 7a loan is said to come with a $5 million guarantee along with a terrific 25-year repayment period. By contrast, a Microloan is capped at $50,000, and the CDC/504 comes with several fixed rates.

Just in case of disaster, a woman-owned business can apply for a low-interest Disaster Loan. This can come in handy for companies that operate in areas where hurricanes or brush fires are a frequent concern.

Aside from SBA-backed loans, women-owned businesses are also eligible for numerous grants. But keep in mind these grants do not come without lots of paperwork, high-interest rates, lender fees, plus loan-associated collateral. The reasoning behind the financial hurdles is said to be simple: grants do not have to be paid back. That said, they come with stipulations that you, as a business owner, must abide by if you expect to receive funding.

Also read: Sad But Real Challenges Female Entrepreneurs Face

Easy Access to Business Grants

One of the most popular grants that can be issued to a female-owned business is called the InnovateHer. These grants can range from $10,000 to $40,000. The grant is offered by the SBA and is purposely engineered to target working women and families.

A variety of other financial grants are offered by state governments, charitable foundations such as the Torch Burch Foundation, and even private companies like Huggies and FedEx.

That said, if you’re still asking yourself why female-owned companies have increased from fewer than 500,000 to close to 10 million in just a few decades, it’s because, aside from substantial profits, the companies come with lots of benefits. Among these benefits are the many loans, grants, and government contracts that are purposely set aside for women. There’s never been a better time to start up a women-owned company or a woman-owned division of an existing company.