New survey shows number of women-owned businesses growing in Virginia
The average woman-owned business in Virginia has been operating for nearly 12 years, employs 9.7 people and has average annual revenue of $779,119.
That data was part of a survey released Wednesday on the state of women-owned businesses in Virginia done by Richmond-based Chmura Economics and Analytics. The Richmond chapter of the National Association of Women Business Owners (NAWBO) commissioned the survey as part of its 40th anniversary celebration. It sponsored a program to share the survey results that drew about 160 people to the University of Richmond’s Jepson Alumni Center.
Chris Chmura, CEO of Chmura Economics and Analytics, told the audience that Virginia ranked 12th among the states with 237,371 women-owned businesses, based on 2012 data. Her update for 2015 estimates that Virginia has 277,154 women-owned businesses employing 328,350 people and generating revenue of $57.2 billion a year.
The average payroll cost per paid worker is $38,754. Overall, total payroll accounts for 40 percent of the gross sales of the women-owned businesses, the survey said.
“In 2015, women-owned businesses accounted for 36.3 percent of all private firms in Virginia,” Chmura said. ”Women-owned businesses are doing well, and they’re growing fast.”
While 79 percent of the 255 businesses surveyed reporting having fewer than 10 employees, employment at women-owned businesses is expanding. It grew 9.7 percent from 2013 to 2014, a higher rate than the 0.6 percent overall employment growth in the commonwealth for the same period.
This trend tracks national data. Between 1997 and 2014, when the number of businesses in the U.S. increased by 47 percent, Chmura said the number of women-owned businesses increased by 68 percent — a rate 1½ times the national average.
In Virginia, 86 percent of the survey respondents said they started their businesses from scratch. A majority of them are sole business owners. Nearly half, 45 percent, operate in the professional and business services sector. The second largest sector was “other,” which includes personal and consumer services, such as restaurants and hair salons, and 10 percent of the survey’s respondents were in the construction sector. Fifty-one percent of the companies are certified as woman-owned businesses, which can make them eligible for state and government loans.
More than half of the respondents, 51 percent, reported using a credit card to access capital, followed by 27 percent who relied on commercial bank loans and 22 percent who turned to family and friends.
Government loans and contracts got lower marks in the financing area with 57 percent of the borrowers rating them as “insufficient” or “very insufficient.”
A majority of the businesses said they did not borrow money in 2014, and 87 percent reported that they earned a profit that year. On average, the profit margin was 7.5 percent.
In terms of challenges, more than 50 percent of the businesses listed business operations, including financial management, time management, staffing, business development and funding sources.
Forty-three percent expressed a need for mentorship and close to 30 percent said business development and client management were among their key challenges.
Chmura’s findings were based on surveys involving women-owned businesses in Northern Virginia, the Richmond area and Hampton Roads. The study has a margin of error of less than 7 percent.
In his remarks on the survey, Maurice Jones, Virginia’s secretary of commerce and trade, noted that for the first time Virginia has set aside $400,000 in a loan fund for small, woman-owned and minority-owned (SWAM) certified businesses. “We probably haven’t done a good job of marketing the program,” he said.
The state also has set a goal of allocating 42 percent of the $5.5 billion it spends annually on contracts and services to SWAM businesses. Under the McAuliffe administration, 37 percent of that business now goes to these businesses, Jones said.
The state spends half of this money on construction, he added. “We need more women in the construction business.”
Another state goal is finding more balance as it builds a diverse economy, Jones said. While the state’s unemployment rate is the lowest in the Southeast at 4.3 percent, many of the new jobs being added are coming from Northern Virginia. Of the 36,700 jobs added year over year in 2015, 30,000 of them were in NoVa, Jones said. Another 4,000 came from the Hampton Roads area.
For every defense spending-related job that has been lost in recent years, “it takes four Walmart jobs to make up for that and that’s if you just look at salary … We have an imbalance in our economy that is a huge risk.”
The state would like to see more growth in the public sector and welcomes the growth of women-owned businesses. “That’s why this data is so helpful,” he said, because it helps the state see how it’s doing in creating a more balanced economy.
Lee Brazzell, president of Richmond’s NAWBO chapter, said the organization is looking for ways to strengthen the wealth creation of women-owned businesses. “Once we do that we are helping to create wealth for the commonwealth.”