More Women Own Businesses Than Ever: Are Female Entrepreneurs Really Better Off?

Are Female Entrepreneurs Better Off? The Truth Behind the Headlines

More women own businesses than ever before, but are female entrepreneurs actually better off financially? The short answer is no. While the number of women-owned businesses has risen sharply, the revenue they bring in has not kept pace. In fact, many women entrepreneurs earn less than they would in a regular job, and the gap between women-owned and men-owned businesses is growing.

What the Data Really Shows About Women-Owned Businesses

According to the Wells Fargo report, women own 15.7 million businesses—40.6% of all U.S. businesses. That sounds like great news. But when you dig deeper, the picture changes.

Revenue Is Shrinking, Not Growing

Businesses owned by women generated $2.7 trillion in 2024, $3.3 trillion in 2025, and then dropped to $2.8 trillion in 2026. Their share of total U.S. business revenue fell from 6.2% to 4.6%. More businesses are being started each year, but they are earning a smaller slice of the economic pie.

The Average Woman-Owned Business Earns Much Less

• Average revenue for a woman-owned business: $179,000 per year
• Average revenue for a man-owned business: $896,000 per year
• Typical revenue for most women-owned businesses: just $35,000 per year

That typical $35,000 is before taxes, health insurance, and other costs. Many women would earn more in a regular full-time job.

The Racial Gap Is Getting Worse

The situation is even harder for women of color. For solo businesses (no employees):

• Average Black woman-owned firm: $22,000 per year (down from $23,000)
• Average white woman-owned firm: $38,000 per year

Total revenue for Black women-owned businesses with employees dropped from $74 billion to $58.5 billion, even as the number of businesses increased. Meanwhile, the number of Black women losing regular jobs has risen sharply. Many are being pushed out of employment and into entrepreneurship—without the support they need to succeed.

Why Women Start Businesses in Low-Paying Fields

Most women-owned businesses are in service industries like hair and nail salons, laundries, cleaning, healthcare, and retail. These fields pay low wages because society undervalues care work. Women who leave jobs to start businesses often stay in the same underpaid industries. Entrepreneurship does not free them from occupational segregation.

The Hidden Costs of Being a Solopreneur

9 out of 10 women-owned businesses have no employees. Being a solopreneur sounds empowering, but it comes with serious financial risks:

• Self-employment tax: You pay both halves (15.3%), not just half like in a regular job.
• No employer health insurance: You pay the full cost yourself.
• No retirement matching: You save for retirement alone.
• No job-protected leave: The Family and Medical Leave Act does not cover the self-employed.
• Weak Social Security benefits: Low earnings mean low future benefits.

In short, many women trade a job with a safety net for a business with no floor at all.

Why These Reports Keep Missing the Big Picture

Counting how many women start businesses is easy. The number keeps rising, and that makes a good headline. But a shallow look at the data leads to shallow solutions. Webinars and mindset seminars won't fix the problem. What women really need are:

• More good W2 jobs with fair pay and benefits
• Pay equity so women earn the same as men for the same work
• Real access to capital for women who want to build businesses that can grow
• Public investment in upskilling and training for high-paying fields

The Bottom Line: Are Female Entrepreneurs Better Off?

Entrepreneurship can be a powerful path—I know because I've been a founder three times. But for most women, starting a business is not a shortcut to wealth or security. It is often a fallback when jobs disappear. Until we measure financial well-being instead of just business counts, the headline "more women own businesses" is not a sign of progress. It is a sign that many women have been pushed out of stable employment, trading a safety net for a story about ambition.