From the July 2001 issue of Entrepreneur

Does your business count? Perhaps not-at least, not under new definitions that the Census Bureau used when performing its most recent survey of women-owned businesses.

In its 1992 survey, the Census Bureau defined women-owned businesses as those with female ownership of 50 percent or more, including public companies. But in its recently released "1997 Survey of Women-Owned Business Enterprises," the Census Bureau changed its definition to include only privately held companies with 51 percent or more female ownership. The result? According to the survey, the number of women-owned businesses dropped from 6.4 million in 1992 to 5.4 million.

The change was made to be consistent with government procurement guidelines, under which businesses must have 51 percent female ownership in order to be certified as women-owned. And, in releasing the data, the Census Bureau was careful to note the new definitions and to point out that, after adjusting data from both years to allow for "approximate comparisons," the number of women-owned businesses actually increased 16 percent between 1992 and 1997.

Next Step
To voice your opinion about the guidelines we should use to classify women-owned businesses, e-mail Lynn Sheri King at lynn.king@sba.gov.

Still, the new count effectively ignores two large segments of women-owned businesses: public companies (even those that are majority women-owned) and companies owned equally by husband-and-wife teams or other male-female partnerships. In fact, the Census Bureau noted that its survey counted 2 million husband-and-wife partnerships, which under the new definition could not be considered women-owned.

Julie Weeks, director of research at the National Foundation for Women Business Owners (NFWBO), understands the reason for the change, but the image the new numbers convey concerns her. (The NFWBO, which uses government figures on the number of women business owners as a starting point for its own, most recently said there were 9.1 million women-owned businesses in 1999, and is waiting to issue new numbers until it decides how to deal with the new Census definitions.) "If you just look at the number of firms now counted and the employees and revenues counted," Weeks says, "people would get a mistaken impression about the economic contribution of women-owned firms, thinking it to be a lot less than it truly is."

How will that mistaken impression affect women's access to capital and assistance? Will bankers be less likely to lend to you if they think women-owned businesses are a declining breed? Will a smaller pool of women entrepreneurs be seen as deserving a smaller slice of the government pie?

The answers to these questions remain to be seen, but Acting Chief Counsel for Advocacy Susan Walthall believes the new statistics offer a valuable opportunity to open a dialogue about women-owned businesses. The SBA Office of Advocacy is one of many organizations working to ensure the new numbers are understood in context. To that end, on May 1 the National Women's Business Council (NWBC) sponsored a task force meeting that included representatives from the Census Bureau, the Federal Reserve, the NFWBO and the SBA as well as members of various small-business organizations, academicians and entrepreneurs.

The goal, says NWBC deputy director Lynn Sheri King, was to devise widely accepted guidelines for what constitutes a woman-owned business in time for the 2002 economic census. The issue is representation, stresses King: "Policy-makers look to data sources for information. If women who own 50 percent of a business aren't counted, they won't have the seat at the policy-making table that they rightly deserve."


Contact Sources