The White House Wants Job Creation and Economic Growth? Talk to Women Business Owners.
This month’s roundtable with President Donald Trump and Prime Minister Justin Trudeau of Canada on women-in-business — a marquee issue of presidential daughter Ivanka Trump — is laudable in drawing attention to this topic. However, those invited to sit around the table were far from representative of the women most needing support from the extraordinary platform of the White House.
Women-owned small businesses employ 9 million U.S. workers and generate more than $1.6 trillion in annual revenues. Yet, more than 80% of these businesses generate less than $100,000 a year. There is great potential to grow these enterprises more robustly — providing greater economic security for themselves and their families, as well as contributing more to the overall U.S. economy. While the topics directly raised during the White House roundtable are important — childcare support for working mothers, recruiting and retaining women workers, and creating a conducive environment for women in the workplace — women small business owners have specialized needs which were not addressed at this week’s meeting with C-suite executives of mega-corporations like General Motors, General Electric and Accenture.
As of 2016, there are 233,200 women-owned companies in the greater Washington region. This is an impressive increase from 175,869 in 2007, a 32.6% jump in the last 10 years. But research shows that there are still significant barriers to entry for women owned small businesses and hindrances to their growth, including: (1) lack of natural networking and collaborative opportunities; (2) lack of clear guidelines and role models to learn how to grow; and, (3) inability to access financing, whether through lines of credits from banks, angel investors, private equity or venture capital firms.
To assign a prescription to meet those challenges and include even more women in contributing to economic growth, the White House should take three concrete steps. First, fully fund local Small Business Administration offices. As Secretary Linda McMahon undertakes a review of her agency’s programs, she must recognize the value in supporting the nearly 100 offices across the nation which offer free counseling, information, loan services, training and advice to minority, women and veteran individuals. In this region alone, there are five offices across the District, Maryland and Virginia that are vital to smaller business operators.
Secondly, government spending on contracts to women owned small business has not yet met its very modest 5% goal. While the federal contracting process can be complicated, agencies can and must do better to encourage competition and reward contracts to women. Businesses in the D.C. region have a geographic advantage given their proximity to governmental agencies. They can service contracts close to their source; an opportunity for greater collaboration which can lead to better outcomes for the work. But they need the awards.
Finally, access to capital continues to be a challenge in the 8 years since the financial collapse of 2008/2009. Availability of financial vehicles are elusive to women who need simple investments in their business to grow them. Loosening the regulatory reins and allowing freer flow of money would give these business owners latitude to remain creative and nimble in growing their market share.
Governmental intervention is not the only solution and the private sector has already and will continue to step in to foster inclusion and growth for women in business. Working with women across the nation’s capital region — from Prince George’s, Maryland to Loudoun, Virginia and across neighborhoods in the District — I have spent years providing brass tacks counsel to business owners and understand what they want. They want to know how to better operationalize their business for scalable growth, innovative sales and product strategies, how to project and manage their financial progress, etc.
Of course, it is not the role of the White House to be so granular. But understanding the underlying factors is important for an authentic dialogue. As the new administration puts forth its agenda on women-in-business, they should invite the > 80% who are not maximizing their potential to hear from them directly and learn from their experiences. That is how we can achieve shared economic growth together.