Yes, but is that a good thing?

A recent study by American Express OPEN found that GA now leads the nation in women-owned companies.

Atlanta Journal Constitution article

As a feminist, I find that exciting. It's pretty cool to see the changes going on.

But then I read closer...

• GA now has 317,200 women owned businesses, up 118% since 1997.

• They employ 240,200 people, and have sales of $45.6 billion.

So, of the 317,200 businesses, they employ on average less than 1 person each. Huh?? They don't even employ themselves??

There MUST be at least 1 business that employs 100 people. Does that make 100 other businesses with less than 0 employees?

Then there is the revenue. $45.6 billion sounds terrific. But that is an average of $144,000 per business. That's nice, but how much are the owners making? It's not a very big number to run a business on (and this is the statewide AVERAGE).

Sounds like the reality is that desperate times call for desperate measures, and owning a business has been an act of desperation, not of growth. (I'll admit, sometimes an act of desperation is what it takes to succeed, so there may be great opportunities here.)

Is the reality of this situation that these represent 240,200 people who are under-employed and not covered by any form of healthcare? Honestly, I don't know. I have no idea how to interpret it.

But this study is spread all over the news agencies, and it is frustrating to see the spin is nothing but 100% positive. Is it possible that the headlines should read something else? Could we talk about both sides? If we did, it would help us understand what we need to work on.

I want to see REAL growth and advancement. I'm not too interested in reports just looking to spin something positive or be sensationalistic. I am not a mushroom, and don't like being kept in the dark and fed manure.

I suspect the truth is somewhere in between. Perhaps half of those businesses are inactive, and the real numbers look a whole lot better. I'd just like to talk about it in a balanced manner.

Most of the women and minority owned businesses that I have dealt with (certainly not all) are an offshoot of a larger company that was established to get government contracts. They have a huge advantage, often bypassing the bidding process altogether, and many times "sub-contract" the actual work out to their parent company. I bet a percentage of those "female owned" businesses are owned by the wife of the owner of a much larger company. Paper tigers I'm afraid.

Maybe some trickery involving a bunch of shell companies?

In reply to pinchvalve:

I've seen that too.

But that would reverse those numbers. It would make the average revenue go up, not down.

pinchvalve wrote: Most of the women and minority owned businesses that I have dealt with (certainly not all) are an offshoot of a larger company that was established to get government contracts. They have a huge advantage, often bypassing the bidding process altogether, and many times "sub-contract" the actual work out to their parent company. I bet a percentage of those "female owned" businesses are owned by the wife of the owner of a much larger company. Paper tigers I'm afraid.

I've seen this in GA a lot. I've worked for a couple, although I don't now. You would think that the 'average' would have to be above one, but I would bet that someone listed as the business "owner" doesn't count as an "employee." So, most single person businesses may actually have 0 employees. Maybe.

I agree that news is skewed. But the only reason they have publicly available news is to sell more breakfast cereal and appliance cars.

I'm wondering if that doesn't count the owner as an employee too. It definitely looks like the media hasn't taken a very in depth look at what's going on. There are quite a few sorts of things that could be classified as owning a business that may not pull in very much money in a year - for example, that's how I put down the royalties from my 2 books and various freelance writing gigs on my taxes, and that doesn't amount to much (the IRS employee who missed decimal places notwithstanding).

^Truth^

Owners of sole proprietorships do not count as employees.

However, owners of corporations and LLC's DO count as employees.

Seems to me shell companies ought to be corporations.

Regardless, it is still the average of an awful lot of companies.

I bet a ton of this is multi level marketing that highly targets females. Tuperware, candles, bags, etc. Most all under employed and acts of desperation.

Maybe it's Oprah opening 1000 shell companies that make less than $250k per year to lower her tax bill.

FWIW, my wife owns her own, 1 woman business and she did that because she was a stay at home mom when her kids suddenly went to all-day school and left her bored. We had a household income that allowed her to risk something new instead of going back to a career that was stressful and unrewarding. There are zero actual employees. There are 1099s that help with big jobs and paperwork.

It makes large numbers (100k+) on paper... but it also has very high overhead so the actual net income is not quite as stellar as a news article on the subject might indicate.

I'm guessing at least half of those are hobby businesses that pull in less than $10k a year and have zero employees.

So in Georgia you are as likely to have the Avon lady come to your door as a Jehovah's Witness?

Shell companies, stay-at-home moms, Avon, MLM's, minority owned businesses are all good theories, and obviously have a big impact. My wife is part of that statistic too.

But 317,200 is a lot of businesses. And less than 1 employee per business as a statewide AVERAGE is troubling.

It's not good news. It's bad news masked as a warm fuzzy.

I think the real headline might be something more like "GA tops the nation in female-run shell companies", or "GA leads nation in tax fraud and abuse of government contracts", or "Minority Business Fraud".

The biased interpretation of the data is not good journalism.

So what i'm getting here is that females tend to gravitate towards mismanaging businesses and/or tax fraud.

Right?

If half the businesses are hobby businesses with zero employees, the remaining 158,600 companies average 1.51 employees per company.

The numbers are still terrible.

Swank Force One wrote: So what i'm getting here is that females tend to gravitate towards mismanaging businesses and/or tax fraud. Right?

No comment. I'm a married man an intend to stay that way.

Pinchvalve's answer could explain everything, I think he got it right.

My ex- owns either 2 or 3 'businesses'. She even had a sales tax number for awhile. The first was the making doll house furniture (the tax number was for this). The second was for selling custom tire bags and other MINI accessories. The third was an engineering side business.

Three businesses. Zero f/t employees. (I did some 1099 work for her engineering business for one project, but that was the only one she did) Only the bag business actually turned an appreciable profit. She eventually cancelled the tax number as she didn't have many NJ sales and she hated doing the quarterly filing.

So 317K businesses and 240K employees? Doesn't surprise me at all.

I'm wondering how the numbers work out for all businesses total; this may not be specific to woman owned businesses.

In reply to Ian F:

I agree. There are reasonable explanations.

Doesn't excuse the bad journalism.

Latest Headlines:

Internet blogger SVreX bashes women owned businesses in Georgia (click hear to read more)

(click here to advertise on this site)

MadScientistMatt wrote: I'm wondering how the numbers work out for all businesses total; this may not be specific to woman owned businesses.

That's a good question.

I looked at the 2008 Census numbers:

GA:

Total # Businesses 907,068

Total # Employers 175,574

Total # Employees 3,119,000

Employees per company 3.4

Employees per employer 17.8

US:

Total # Businesses 27,287,452

Total # Employers 5,930,132

Total # Employees 120,903,551

Employees per company 4.4

Employees per employer 20.4

So, they are not completely out of whack, but as a headline the women owned companies are still awfully low compared to the state overall. It's still hard to spin it as a positive.

aircooled wrote: Latest Headlines: Internet blogger SVreX bashes women owned businesses in Georgia (click hear to read more) (click here to advertise on this site)

thanks.

lol (I think...)

FWIW, it is not a bash. I am interested because I have a legitimate (and vested) interest in seeing women excel in this area.

I'll run with the assumption you were being humorous.

I'm an independent contractor as a side job. I pull in less than 7k a year doing it, but I bet that I would count as a business owner. While not a woman, you can certainly see how that would skew the data as far as what constitutes a business owner.

SVreX wrote:

aircooled wrote: Latest Headlines: Internet blogger SVreX bashes women owned businesses in Georgia (click hear to read more) (click here to advertise on this site)

thanks. lol (I think...) FWIW, it is not a bash. I am interested because I have a legitimate (and vested) interest in seeing women excel in this area. I'll run with the assumption you were being humorous.

Yes, very much in humor. Forgot the .

Can I ask, as someone with interest in the area, what you think of the "women make less then men" thing we have been hearing lately? It's obviously a bit politicized, so it's hard to know where the truth is.

I have heard that that statement is lacking in perspective / context. In some cases they are not referring to the same jobs (men tend to take more dangerous higher paying jobs) and in others may not be accounting for other factors (e.g. women are more likely to drop out of the workforce for family reasons). Thoughts?