In a previous post-COVID survey, UpCity explored the career needs and expectations of women in the workplace that have emerged in the wake of the pandemic. In one section of the survey, we asked women to weigh in on their future career plans, and discovered that many were interested in training in new skills to enter a new career.
These results got our team to thinking, and we decided it would be valuable to further explore the path of women in the workforce, especially those who had started as or left a career to become entrepreneurs and startup owners.
UpCity recently partnered with Pollfish to conduct a survey of 400 U.S. women entrepreneurs in order to explore women’s entrepreneurship and their journey towards business ownership. We have broken down the survey metrics into three discussions:
- Industries in which women are starting businesses
- Reasons for becoming entrepreneurs
- How entrepreneurs are growing, evolving, and improving their businesses
Industries In Which Women Are Starting Businesses
Women account for 40% of entrepreneurs in the modern economy, more now than ever in history after a massive rise in women forming startups in 2021. With women increasingly taking the plunge to leave their established careers and become owners themselves, we used the Pollfish survey as an opportunity to find out what industries women were leaving, and in which segments they were focusing their efforts to become owners.
In a previous post-COVID survey, UpCity explored the career needs and expectations of women in the workplace that have emerged in the wake of the pandemic. In one section of the survey, we asked women to weigh in on their future career plans, and discovered that many were interested in training in new skills to enter a new career.
These results got our team to thinking, and we decided it would be valuable to further explore the path of women in the workforce, especially those who had started as or left a career to become entrepreneurs and startup owners.
UpCity recently partnered with Pollfish to conduct a survey of 400 U.S. women entrepreneurs in order to explore women’s entrepreneurship and their journey towards business ownership. We have broken down the survey metrics into three discussions:
- Industries in which women are starting businesses
- Reasons for becoming entrepreneurs
- How entrepreneurs are growing, evolving, and improving their businesses
Industries In Which Women Are Starting Businesses
Women account for 40% of entrepreneurs in the modern economy, more now than ever in history after a massive rise in women forming startups in 2021. With women increasingly taking the plunge to leave their established careers and become owners themselves, we used the Pollfish survey as an opportunity to find out what industries women were leaving, and in which segments they were focusing their efforts to become owners.
Before becoming entrepreneurs, 50.75% of women worked for businesses focused on a mix of B2B and B2C
It’s common in the modern economy for businesses to diversify their services and products to meet a diverse customer base, often resulting in businesses that serve both other businesses and consumers. Drilling deeper into the survey results, though, more women entrepreneurs got their start working for business-to-consumer focused brands.
According to our Pollfish metrics, close to 31% of respondents previously worked in sales and customer service, with an additional portion of 23% of respondents coming from a mix of other service-focused industries. When considering that both B2B and B2C industries rely on service providers in IT services, marketing and advertising, accounting and finance, you could make the argument that an even higher percentage of women looking to open their own business started in services-focused roles.
46.25% of women entrepreneurs surveyed say the business they opened remains focused on a mix of B2B and B2C
While returning to school to get the necessary skills in order to transition to different careers was a priority for many women in our previous survey, the Pollfish data in this adjacent study shows that many women entrepreneurs were doing so to fill in the gaps in their business acumen.
Yet most have gone on to open service-focused businesses similar to those they were leaving, often for a variety of reasons related to working under someone else’s guidance and vision. The trend towards an overall majority being a mix of B2B and B2C holds for the opening of new businesses, while there is a slight increase in B2C-focused new businesses opened by women after leaving their previous careers.
Nearly a quarter of women started a business in sales and customer service
About 20% of our survey respondents opened businesses focused specifically on sales and customer service. A portion of the 26% claiming that their industry focus is “Other” in our dataset can be tied back to a service-based industry. Fewer women, however, were apt to open related businesses focused on services such as accounting and finance, marketing, IT, and human resources.
7% – Accounting & Finance
8% – Marketing & Advertising
10% – Design & Development
5% – IT Services
6% – Human Resources/Recruiting
20% – Sales/Customer Service
8% – Healthcare
3% – Legal
3% – Logistics/Transportation
7% – Real Estate
26% – Other
Reasons for Becoming Entrepreneurs
While the path to entrepreneurship is often a very personal and individual journey, the motivations are similar, as many women face similar challenges professionally, regardless of the industry in which they are working. We asked Pollfish to explore women entrepreneurs’ motivations for leaving their careers to open a business, and found that our respondents were driven by an interesting array of factors.
The main motivation for women starting a business is wanting to be in control of their schedule
One of the major reasons highlighted by respondents speaks to the growing number of resources and tools increasingly being made available to women professionals that have inspired them to pursue business ideas they’ve wanted to pursue for years.
The marketplace has opened up significantly over the last year, as demand for services and products spiked in 2021, leaving many gaps across industries. Enterprising individuals have recognized these gaps for what they are—opportunities to capitalize on a business opportunity—and 47% of our respondents say that taking this leap into entrepreneurship is something that they’ve been planning for.
While their aspirations of ownership were important, our business owner respondents keyed in on two other factors in their decision to open a business of their own rather than remaining in the traditional workforce.
First, they wanted to establish themselves as financially independent, ensuring that they didn’t need to rely on someone else’s employment or ability to earn to provide for either themselves or their families. This is an especially important factor in the uncertain post-pandemic economy where large businesses are restructuring and streamlining.
The second key driver for women owned-businesses has been the need for work-life balance and control over their own daily schedule. While ownership is in no way an escape from long hours, ownership does provide a certain level of flexibility not usually possible when working under the workforce arrangements in place under someone else’s brand.
On a scale of 1-10 (1 being the most important)
I was earning less than my male counterparts
I was passed up for a promotion
I was laid off or fired from a role
I wanted to be financially independent
I’m the primary breadwinner of my household
I wanted to be in control of my day-to-day schedule
I’ve had a business idea that I’ve wanted to implement for years
I come from a family of entrepreneurs
I wanted to work remotely and/or travel
Other
Having control over their schedule allows respondents to create the right workplace arrangements for their work style
Several of the Pollfish queries drilled down into scheduling as a driving factor of why entrepreneurs opened their own business and found that women were very invested in the ability to create a workplace arrangement they could control and that allowed them to remain flexible to other factors in their lives.
The survey asked entrepreneurs at what times of the day they do their best work, and there was a fairly equal distribution across the work day as to the preferred time of day. Most revealing, though, in the need for flexibility is that 33.75% of respondents stated that it depended upon the day when they did their best work, making flexibility a powerful tool for instilling efficiency in their operations that they may not have been able to leverage working as an employee under someone else’s brand.
The study also delved into where respondents preferred to work. While 45% of respondents had established a fully in-person business setup, it’s more telling of the need for flexibility in that 55% of our respondents had chosen either a flexible hybrid arrangement or a fully remote arrangement for themselves and their staff. While there is flexibility in where they are working, the data supports our earlier statement that entrepreneurs are by no means equating flexibility with the ability to reduce how much time they are working.
29% – 100% remote
27% – Hybrid
45% – Fully in-person
Entrepreneurship isn’t a free ticket to not put in long hours and hard work. Only 14.5% of respondents are working less than a traditional 5-day work week, with a majority 53% working between 5-6 days a week. The dedication and effort being expended by entrepreneurs in our survey is evidenced by the 32.5% of respondents who are working 7-day work weeks in order to keep their businesses up and running and evolving with the needs of their customers. Not only are respondents working most days of the week, but they are also putting in a significant number of hours keeping their businesses in operation, with 28% working at least a traditional 40-hour work week and 44.25% working over 40 hours.
44% – 40+ hours per week
28% – 40 hours per week
28% – Less than 40 hours per week
How entrepreneurs are growing, evolving, and improving their businesses
We spent the remainder of the survey exploring the state of women-owned businesses, such as the tactics used by our entrepreneurs and startup owners to build up the business from first envisioning it into a viable business model.
46.25% of respondents started their business while working full time
Starting a business takes an investment of time, which we’ve discussed above. However, it also requires time and an investment of capital and resources. This is hard to achieve when working full-time, and very few business owners started with the cushion necessary to simply leave a full-time job and immediately open a new business. That is why 46% of our respondents worked on establishing and growing their business on the side, while working full-time.
Almost 53% of our respondents started their business by either leaving their full-time jobs to do so or during a period when they were unemployed. This was especially the case during the COVID-19 pandemic, which greatly disrupted vast swathes of the economy throughout 2020 and led to a significant number of layoffs in the beginning.
As the economy started to recover in 2021, employees started to reevaluate their goals and career choices, and the Great Resignation began in earnest, with many employees leaving their full-time careers for other opportunities.
During these two periods when a large portion of the workforce found themselves either unemployed or in a position to leave their full-time jobs and shift their focus, we saw a great many new business owners emerge, including a large number of women entrepreneurs and startup owners.
47% – I started my business on the side while working full-time
27% – I left my full-time job to focus on starting my business
26% – I was unemployed when I began my business
1% – Other
51% of women entrepreneurs first started growing their business on the side as a freelancer or consultant
The entrepreneurial journey for a majority of our respondents began as a side-gig providing consulting services or completing freelance contracts. This helped many of our respondents create relationships that evolved into long-term contracts necessary to get the business off the ground.
While many respondents went about this process alone, almost 22% leveraged the productivity and efficiency afforded by outsourcing work and acting as a middle-man in the workflow to build their reputation for getting work done and meeting the needs of their clients, where they later formed into more established and reliable contracts.
71% of women business owners were sole founders
We talked above about the importance that financial independence played in the decision to open a business for many women entrepreneurs. It shouldn’t be a surprise then that when carrying out their business plan, that close to 71% of them founded their businesses as sole owners without a partner.
While some of our respondents do rely on a co-founder to navigate the business world, our data shows that there are a number of other resources women entrepreneurs are relying upon as sources of mentorship and inspiration to grow their businesses.
49% of women business owners rely upon family or friends with entrepreneurial backgrounds
As a startup owner or new entrepreneur, it makes sense to stay close to home at the start due to a lack of funds or resources. Close to half of the business owners responding to the survey pointed to friends and family members as their best sources for inspiration and guidance in building and launching their businesses.
Books and online resources focused on entrepreneurship are crucial informational sources many business owners turn to for guidance, and a growing number of online influencers focused on best practices for entrepreneurs are fast becoming the go-to for quick and actionable guidance. For other respondents, turning to role models and mentors from either their early education or from a previous work experience has proved to be an invaluable source of inspiration.
Business ownership is only the first step for 33% of respondents
Talk to most entrepreneurs about their future business plans and you’ll immediately notice that many of them have multiple business plans they plan to execute, if they already haven’t put them into play. Having left the life of a single income gained by working for someone else, many business owners understand the need to diversify their portfolios.
A third of our respondents already have intentions of opening an additional business, while another 38.5% are unsure of their future plans. This high level of uncertainty, along with the 28.5% of respondents currently unwilling to open a new business, is possibly influenced by the potential recession being predicted by financial experts and the resulting economic uncertainty overshadowing 2023.
33% – I intend to start an additional business
29% – I don’t plan to start an additional business
39% – I’m unsure at this time
Opening Doors For Women Entrepreneurs In 2023
The post-COVID-19 economy has been rife with opportunities for aspiring women business owners to realize their dreams of opening their own business. We hope that our readers who might be considering a similar path are inspired by the journeys of our survey respondents and the steps they’ve taken towards success.
Our UpCity catalog of articles includes a number of resources for aspiring entrepreneurs, including advice on how much funding you should anticipate deploying to launch your business and how to engage with the Small Business Administration (SBA), credit providers such as American Express, venture capital funding, and other sources to secure that funding.
Feel like you might need the assistance of a consultant or freelancer yourself in executing your business launch and building out your portfolio? Our marketplace of B2B service providers can connect you with a professional capable of helping you navigate your own journey to entrepreneurship in 2023.
UpCity’s Survey Method
UpCity used Pollfish to survey 400 U.S. women entrepreneurs of all adult ages. A majority of our respondents are 35-44 years old (33%) and have had their own business for three to five years.