Linda McMahon, the president’s nominee to lead the Small Business Administration, made a point during her confirmation hearing saying that she wants to grow women’s entrepreneurship.
She’s not alone.
Momentum on women’s issues has reached a fever pitch, making this the perfect time to empower McMahon, if confirmed, to make good on that goal by giving her the tools she needs to harness the entrepreneurial energy of our nation’s 10 million women business owners. We urge the president and Congress to join her in helping women business owners and the economy prosper.
Our organizations, which represent micro-businesses and women entrepreneurs, propose the government make a significant investment in women-owned businesses. This investment would increase business training services, prioritize gender parity in access to capital, and increase federal contracting opportunities—giving women entrepreneurs the coaching, capital and connections to markets they need to grow and thrive.
The SBA invests $17 million in Women’s Business Centers; these 106 centers reach 100,000 women business owners with coaching and training—just 1 percent of the 10 million women-owned businesses in the U.S. This work is crucial, as McMahon knows from her support of WBCs in her home state of Connecticut. When a business owner receives training, she is 80 percent more likely to still be in business three years later and will create two additional jobs, according to the Aspen Institute’s Field Program.
Imagine if we increased funding to $100 million. More than a five-fold increase would allow WBCs to serve 500,000 women entrepreneurs. Let’s say 80 percent start their own business. The return on investment would include 1.2 million jobs and $20 billion in revenues generated at a conservative $50,000 per business. Studies from Civic Economics find that $20 billion from locally-owned businesses will circulate at least three times more in their local economies than money from big chains do, creating a total value of $60 billion. That’s a huge return on investment, in terms of new jobs, greater revenues, and stronger local economies.
Take Lidia Mendez who went from strawberry picker to café owner of Taqueria Lidia in Watsonville, Calif. She supports her family, takes her special needs child to work with her, and is free from back breaking work. Jessica McGinty started Jessicurl, a curly hair care product line, out of her Arcata, Calif., kitchen and now sells around the country and employs eight. Rebecca Weston went from massage therapist to owner of Sacred Mountain Spa in Mount Shasta, Calif., and has four employees. None of them did it in a vacuum – they all received support from a Women’s Business Center.
If President Trump is serious about creating jobs and stoking America’s economic fire, he should make women business owners’ access to capital needs a top priority, as well. Women entrepreneurs lag woefully behind their male counterparts when it comes to their ability to get a loan. Only 3 percent of venture capital funding goes to women, and women entrepreneurs receive a paltry 4 percent of commercial loan dollars. What’s more, a 2016 Fundera study found that on average, those dollars come with a higher interest rate and must be paid back sooner.
Another way the federal government can help women business owners is to open up federal contracting opportunities. WIPP released a report in 2016 that found women-owned small businesses have limited opportunities to win some of the federal government’s most sought-after contracts, despite a proven ability to deliver innovative goods and services across the globe.
Despite these challenges, women have been tremendously successful in business. Between 1997 and 2015, the number of women-owned businesses grew by 74 percent—a rate that’s 1.5 times the national average, according to the State of Women-Owned Businesses Report by American Express. Women of color are starting businesses at three times the rate. Today, women-owned businesses generate more than $1.4 trillion in revenues and employ 8.4 million people.
We propose the following agenda for President Trump and McMahon’s first 100 days:
- Increase funding for Women’s Business Centers to $100 million;
- Re-authorize legislation for SBA’s Women’s Business Centers;
- Target women-owned businesses to obtain the capital they need from the SBA and other agencies such as Treasury and USDA;
- Open the door to women on large, multi-year government contracts.
Claudia Viek is the CEO of CAMEO (California Association for Micro Enterprise Opportunity) the statewide network of 190 nonprofit business service providers, lenders, economic developers and banks that serve 40,000 micro and small businesses annually in California. Jane Campbell is the president of Women Impacting Public Policy (WIPP) and the director of the Washington, D.C. office of the National Development Council (NDC).
The views expressed by this author are their own and are not the views of The Hill.