Purchase, NY —Women are opening businesses in record numbers and with increasing success: Nearly three quarters (72 percent) of women-owned businesses are more than five years old, with almost half (45 percent) having been in operation for more than ten years, according to the results of a MasterCard Worldwide survey in recognition of October as Women’s Small Business Month. Forty-two percent of women entrepreneurs make more than half of their purchases with a credit or debit card, helping them gain a handle on cash flow, according to this year’s Women in Small Business survey, conducted by Ipsos on behalf of MasterCard.
“The MasterCard survey shows that women business owners want the autonomy and control to make decisions on their own terms,” said Lori Byrne, vice president, Business Development, Global Commercial Products, MasterCard Worldwide. “MasterCard is working closely with our issuers to provide small businesses with the resources and solutions they need to more efficiently manage their businesses and compete in the marketplace.”
A Driving Force
Women small business owners are a driving force in the U.S. economy. Between 1997 and 2006, the number of majority women-owned firms grew from 5.4 to 7.7 million, an increase of 42 percent, according to a study conducted by the Center for Women’s Business Research. These gains represent an increase almost double that of all firms (23 percent).
The MasterCard survey explored the unique needs and challenges facing women small business owners in trying to establish and run successful businesses. The survey covered topics such as the reasons why women start their own business and how they pay for business-related expenses. The following results suggest that women are working to separate personal and business finances, and are using payment cards to help run their businesses more efficiently.
Money Management, Establishing and Growing a Small Business
The use of business credit and debit cards among women small business owners is almost ubiquitous. Most hold either a credit (52 percent) or a debit card (30 percent), and 19 percent hold both. A full 42 percent of women entrepreneurs leverage payment cards to make more than half of their purchases.
More than half of women small business owners (53 percent) say they completely separate personal and business finances, while 34 percent say that they do overlap to some degree.
One-third (33 percent) of women small business owners use a money management software application to handle their finances, up from 27 percent in 2005. This reflects a shift from 2005 when women business owners looked to accountants as the primary method for financial management.
Women Want to Be Their Own Boss
The primary motivator for women to start their own business is the desire to be their own boss (33 percent). This is followed by the opportunity to generate household income (21 percent), have more schedule flexibility (19 percent) and have more time for family and personal interests (17 percent). These top reasons are relatively unchanged from 2005.
Women working full-time are more motivated by a desire to be their own boss (41 percent), while key motivators for women working part-time include a desire for flexibility in their schedules (29 percent) and having more time for family and personal interests (24 percent).
Despite Success, Challenges Remain
The main challenges women entrepreneurs said they face are stretching themselves across multiple roles and projects (25 percent), health care costs (18 percent), balancing family and work (14 percent) and effectively managing cash flow (7 percent).
“Payment cards are a critical tool to help small businesses mange cash flow and can help entrepreneurs grow their businesses,” said Byrne. “MasterCard remains committed to providing women business owners, and entrepreneurs everywhere, with a comprehensive and innovative spectrum of payment solutions, which can lead to successful financial management of their business.”
The MasterCard Worldwide Survey
The MasterCard Worldwide survey was conducted by Ipsos between August 29 and September 5, 2006, and polled approximately 300 women small business owners from around the country. The survey has a margin of error of ±5.7 percent.
About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes close to 14 billion payments each year and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard Worldwide serves consumers and businesses in more than 210 countries and territories. For more information, visit www.mastercardworldwide.com.
Ipsos is a leading global survey-based market-research company, owned and managed by research professionals. Ipsos helps interpret, simulate and anticipate the needs and responses of consumers, customers and citizens around the world. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media and public affairs research, as well as forecasting, modeling and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2005, Ipsos generated global revenues of $853.8 million. To learn more, visit www.ipsos.com.