Good morning and welcome. Thank you all for coming. I would especially like to thank our participants for taking the time to share their thoughts and experience with us. I know that all of you are tremendously busy, either with running a business or working in some way to support woman’s entrepreneurship, and I appreciate your taking the time to share your wisdom with us.
This roundtable today is an official roundtable of the Senate Committee of Small Business and Entrepreneurship. As such, it will be recorded and used to inform the actions of the Committee.
Women entrepreneurship is important, not just for the small business owner, but for the economic and social well being of this nation. Thirty percent or 7.7 million businesses are 51 percent or more owned by women. These firms employ over 7 million people and generate $1.1 trillion in annual sales. In Massachusetts, 189,297 businesses are majority owned by women, generating $30 billion in sales and employing 177,020 thousand people. Women are leaders in creating new businesses. Between 1997 and 2006, the number of firms majority-owned by women increased by 42 percent – almost double the growth seen among all firms.
However, despite their recent successes, women-owned small businesses still continue to have lower revenue and fewer employees than their male counterparts. Although 6 percent of men-owned businesses have revenues of $1 million or more, only 3 percent of all women-owned firms do so. In regard to employment, only 16 percent of all firms with employees are owned by women. Even in federal procurement, women-owned firms receive less than 4 percent of all federal contracts.
The hurdles that prevent women from reaching their full economic potential harm not just the entrepreneur but society as a whole. Studies show that entrepreneurship correlates positively with increased income and decreased poverty among women. Since almost a quarter of all households with children under 18 are headed by a woman, this success translates also into a benefit for children and society.
The importance of women to the economy is well understood in global economic projects. Last week, Goldman Sachs announced a $100 million project to educate 10,000 women globally about business. The project was based on their research that showed that educating women leads to higher wages, better health, and improved economic returns. This impact continues in the following generations.
There is often a sense in Washington, DC, that the problems affecting women have been solved. Any discrepancy in the success of women owned firms can be explained by women’s desire to balance work and family or a lack of desire in running a large corporation. Although this is the case for some women (and men), it is not the case for all women. And, according to accounts heard by this Committee, women who seek to start and especially grow a business face higher hurdles than men. It is not that the hurdles are different – men and women both need to find capital in order to finance growth. However, women face additional obstacles that they must overcome.
In today’s roundtable, we will discuss what these hurdles are, and I hope to hear from each of you about what you think the problems are. The challenge of accessing capital is one concern that this Committee hears about repeatedly. Also, the problems in selling goods and services to the federal government are a common complaint that I hear. However, I know that there are more issues, and I encourage you to share your thoughts about what they are.
In addition to the problems, we will discuss ways to address those problems, and I encourage you all to share your thoughts on this too. One part of the solution, in my mind, will be implementing an effective Women’s Procurement Program. The proposed rules by the Small Business Administration, which list only 4 of 140 categories as underrepresented by women, is simply not realistic. It is not effective and the Small Business Administration must do better. However, I know that there is much more that can be done, and I look forward to hearing your thoughts.
As you all know, the problems facing women entrepreneurs are complicated. However, addressing them is vital to the economic and social well-being of the nation, and I look forward to having this discussion here today.
The general format of the roundtable is that if you would like to make a comment, signal by standing your name plate on its end, and I will call on you. Please keep your answers concise so that everyone can have a chance to speak.
Representative Richardson, I now turn the mike over to you for your opening remarks.