The Status of Women and Entrepreneurship in Utah: A 2020 Update

Setting the Stage

Throughout the nation, women are building and running successful businesses. In 2016, the Utah Women & Leadership Project (UWLP) asked whether Utah was a good place for women to start and run businesses. The answer to that question was released in a research and policy brief titled, “The Status of Women and Entrepreneurship in Utah,” which became part of a series that focused on understanding the status of women’s leadership in Utah’s politics, education, nonprofits, business, government, and other settings.

Since that time, Utah’s economy has thrived. In fact, Utah was the focus of a recent Wall Street Journal article, “Why Utah Has Become America’s Economic Star.” It has been ranked the #1 Best State for Entrepreneurs in both 2018 and 2019 and was ranked #2 as the Best Place in America to Start a Business in 2019. Utah was ranked #2 in 2019 as the Best Economy, and Forbes ranked Utah #3 as the Best State for Business. And since 2012, Utah has held the #1 spot among the top five states with the best economic outlook.

National Trends -- A Time of Growth

Women are at the center of the American economy, make up half of the US workforce, and serve as the primary or sole breadwinner in 40% of households with children. They also control the vast majority of household spending decisions, wielding tremendous influence and buying power.

The greatest growth in women-owned businesses from 2014 to 2019 occurred at the extremes of the revenue spectrum; low-revenue companies and million-dollar-plus businesses. Women-owned businesses generating less than $25,000 in revenue grew by 31%, and businesses with $1 million or more in revenue grew by 24%. The 2019 American Express Report claims that the impressive growth in the high-revenue segment “proves that women are ambitious and have the chops to succeed.”

Nationally, women-owned businesses are a large and fast-growing force in the US economy and are considered just as successful as men-owned businesses as measured by business starts, revenue growth, job creation, and number of years in business. Overall, women are more likely to start a service business in the professional services, retail, healthcare, and education industries, while men are more likely to start a business in construction and manufacturing.

Utah Trends

How does Utah fare in comparison to the rest of the nation? Utah is home to 287,803 small businesses that have 572,888 employees—46.2% of Utah’s workforce. In 2016, Utah was ranked 8th for women-owned businesses, 11th in growth by number of firms, 4th in growth by revenue, and 30th in growth by employment. By 2019, the state’s thriving economy contributed to Utah’s ascent to 6th in the nation in economic clout for women-owned businesses (behind Georgia, Oregon, Idaho, Nevada, and South Dakota), and 5th for revenue growth (19.2%), 10th in employment growth (7.6%), and 12th in growth by number of of firms (12%). It is also important to note that Utah’s overall population was 3 million in 2015 and grew to 3.2 million in 2019, a 7% increase. Another key indicator is employment vitality, which is calculated by comparing the employment growth rate with the average number of employees. In 2019, Salt Lake City was ranked the #1 metropolitan area in the growth of employment vitality in women-owned businesses—a meteoric rise considering that in 2018, Salt Lake City was ranked 10th in the nation.

Women's Decisions to Start and Grow Businesses

According to The Status of Utah’s Female and Minority Small Business Owners, commissioned by JP Morgan Chase & Co., women entrepreneurs list four major motivations for choosing to start small businesses:

1. Having the necessary experience
2. Being financially ready
3. Following a passion
4. Desiring flexibility in their personal and professional lives

Research by the National Women’s Business Council also found that women who experience discrimination or face challenges in male-dominated workplaces are increasingly turning to entrepreneurship as an alternative career model. These reasons for starting a business are reflected in three trends that are emerging nationally: sidepreneurs, women of color entrepreneurs, and encore entrepreneurs.

Barriers to Women's Entrepreneurship

In 2016, it was noted that women-owned businesses were critical to job and wealth creation for women, particularly those in microenterprises having fewer than five employees. Three barriers for women entrepreneurs included fair access to capital, insufficient federal contracting jobs, and access to specialized business counseling and training. Current research indicates that these challenges persist. Many women struggle with feeling the need to be “super women,” constantly having to prove themselves, being treated differently than men, and feeling isolated.  Although the obstacles for each woman may be different, research consistently identifies four types of barriers:

1. Unequal access to financial capital
2. Lack of mentors or role models
3. Difficulty accessing affordable child care
4. Lack of awareness of available resources and training

Recommendations & Current Efforts

To support the potential economic trajectory of women-owned businesses, changes are needed in business practices and attitudes. Below are five strategies that can be adopted by both public and private organizations in our community to improve and support the success of women entrepreneurs:

1. Creating connections
2. Adopting a "bigger is better" attitude
3. Changing perceptions
4. Collecting and using data
5. Committing to diversify supply chains

Conclusion

We call on debt and equity financers to consider new and innovative ways to improve accessibility and opportunity for women. We call on women to engage in government contracting, where possible, and to diversify and expand their potential for success. We call on colleges and universities to provide gender-specific initiatives and programs to inspire girls and young women toward entrepreneurship and to educate more adult women from a variety of majors on how to start and grow businesses. As an important segment of productive business owners, women certainly are getting things done and, by so doing, are impacting others and blazing a trail to an improved future for Utah.

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To learn more about The Status of Women and Entrepreneurship in Utah: A 2020 Update read the brief.