October is National Women’s Small Business Month. There’s big news happening every day, so why should we focus on women small business owners?
Because women business owners—the vast majority of whom own small businesses—make up more than a third of our economy. And women start businesses at a rate five times higher than the national average. Clearly, women are driving economic growth, making it more important than ever that we recognize and supercharge their economic might.
But to help women business owners truly thrive, we must recognize the deck is stacked against them.
Women entrepreneurs receive just 4 percent of commercial loan dollars, and only 7 percent of venture capital funding goes to companies with a female CEO. On the tax front, research by American University’s Kogod Tax Policy Center and Women Impacting Public Policy (WIPP) found women business owners are missing out on $255 billion in tax incentives because of how they’re legally organized or the industries they’re in—and Congress has never looked at how the tax code impacts them, even while in the thick of tax reform.
What’s more, women small business owners still only receive a tiny fraction of government contracts—often falling shy of the 5 percent goal the government set more than 20 years ago.
WIPP, the nonpartisan organization I lead, held its annual conference this month, bringing more than 100 women entrepreneurs to Washington to find solutions to these problems. We held advocacy and media trainings to teach them how to effectively speak about issues important to the women business community.
The passion and commitment from these women is profound. Here are the policy solutions they say they need to thrive:
- Policymakers must change the country’s capital infrastructure to address women business owners’ capital access needs. This includes tax incentives for angel investors, developing more female fund managers through the Emerging Managers SBIC Program and rethinking how credit scores are calculated.
- Congress should establish equitable tax treatment for all businesses—specifically the 90 percent of businesses organized as something other than a “C Corp.”
- Congress must study how the tax code impacts women business owners so policymakers can make evidence-based tax decisions for women entrepreneurs.
- Congress must fully fund women business owner centers to the tune of $21.75 million. The nation’s 106 Women’s Business Centers reach 100,000 women business owners with crucial coaching and training. 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, Aspen Institute’s Field Program has found.
- Women-owned companies are often bypassed on large Multiple-Award Contracts in the field of government procurement. But, when they do gain access to those contracts, they win 20 percent of the bids, according to WIPP research. Congress must create socio-economic set-asides within these contracts for women-owned small businesses.
Progress is being made here. The Senate included in the National Defense Authorization Act language from a bill by Sens. Joni ErnstJoni Kay ErnstSwalwell slams House Republican for touting funding in bill she voted down Alabama GOP gears up for fierce Senate primary clash Biden's court picks face fierce GOP opposition MORE (R-Iowa) and Kirsten GillibrandKirsten GillibrandThe Hill's 12:30 Report - Presented by Connected Commerce Council - Biden faces reporters as his agenda teeters Former aide says she felt 'abandoned' by Democrats who advanced Garcetti nomination as ambassador to India Schumer vows to push forward with filibuster change: 'The fight is not over' MORE (D-N.Y.) asking the Small Business Administration to conduct a study on all socio-economic group participation, including women, in these contracts.
- The administration and Congress must create a path forward for federal contracting businesses that have outgrown their “small” status. Businesses with more than $38.5 million in revenues or 1,500 employees must compete with the largest businesses—more than $500 billion in revenue—for contracts, putting many contracts out of reach. Working with the Montgomery County Chamber of Commerce to address this problem we have asked agencies to bring the large Multiple-Award Contracts in-line with the capabilities of mid-size firms, change how the size of a company is determined, and allow companies to deduct R&D expenditures from their total revenue for size determination to help them transition from a small to a midsize business.
Celebrating women small business owners for a month a year isn’t enough. Enacting just a couple of these policies would help unleash the full economic potential of women entrepreneurs.
Women are an impressive economic force, now. Imagine what they could achieve with some help from lawmakers.
Jane Campbell is the president of Women Impacting Public Policy and director of the Washington, D.C. office of the National Development Council.