Iowa near last in women-owned business startups

Iowa trailed most of the nation in women-owned business startups between 1997 and 2011, according to a new report based on census data.

The number of women-owned businesses in Iowa increased 20.1 percent compared to a nationwide growth of 50 percent in women-owned businesses during the 14-year period, according to the report from American Express Open.

Only Alaska (8.8 percent) and West Virginia (17.8 percent) had slower rates of growth in women-owned businesses.

Julie Weeks prepared the report for American Express Open, which provides payment cards for small businesses. The 50 percent growth in women-owned businesses outpaced the overall growth in business creation of 34 percent, Weeks said.

Women-owned businesses did not experience the growth of other businesses after reaching roughly $1 million in sales and 100 employees, Weeks said. Women-owned businesses also tended to be concentrated in a few sectors – health care, education and social assistance.

Weeks was unable to explain Iowa's poor showing in growth of women-owned businesses. She said the state's relatively slow population growth could be a factor, since states with the biggest increase in women-owned businesses tended to be the fastest-growing states.

The fastest growth in women-owned businesses took place in Georgia (97.5 percent) followed by Nevada (87.6 percent).

Weeks also lacked any explanation for the 3.1 percent decline in revenues of women-owned firms in Iowa over the 14-year period. It was the only state to see a revenue decline.

The director of the Iowa Commission on the Status of Women, Rachel Scott, said she is concerned after reading the report. She believes state economic development incentives tend to be focused on areas in which women are less likely to start up businesses, such as biotechnology, computers and advanced manufacturing.

Financing may also be lacking for businesses in the areas of heaviest entrepreneurial activity by women, Scott said.

“With the redesign of the state's economic development agency, with a strong woman like Debbie Durham at the helm, hopefully we'll have an opportunity to change that,” Scott added.

Scott said it's possible that the high rate of two-income households in Iowa are one reason fewer women start businesses. A whopping 80 percent Iowa mothers are in the work force, Scott said.

In 2011, Iowa had 69,100 women-owned firms, the report said. The number of firms was up 20.1 percent from 57,527 in 1997, but the number of people they employee was down 19.3 percent to 57,900.

The report was prepared by the consultancy Womenable based on the Census Bureau's Survey of Business Owners. The survey is conducted every five years in years ending in two and seven.