Study: Women Businesses Beating the Odds

Women businesses are gaining more ground with corporate purchasing managers than the average provider

Washington, DC — November 9, 2006 — Women-owned businesses are beating the industry average of keeping and growing corporate contracts, suggests a recent study commissioned by the Women's Business Enterprise National Council (WBENC), an advocate of women-owned businesses as suppliers to corporations and large government organizations.

The results reveal that 40 percent of WBENC's corporate members increased their spending by at least 10 percent over the last three years with women-owned firms, which is 16 percent above the average provider.

Not only are women businesses gaining more ground, they are losing less when budgets are cut or the supply chain tightens, according to the study conducted by the Center for Women's Business Research. On average, 24.5 percent of corporations decreased their spending with suppliers, but only 14 percent cut contracts with women-owned providers.

"This study shows when the playing field is level women will win because of their talent, dedication and superior customer service." said Linda Denny, Interim president of WBENC. "Our challenge now is helping more women-owned businesses raise financing to expand their scale and grab more market share."

The study indicated that there is competition for those corporate dollars within the community of women-owned firms. According to the study, the bulk of corporations — 59 percent — concentrate their spending with fewer than 200 women-owned businesses. Only 18.9 percent spend with 200 to 499 women-owned businesses and only 21.6 percent with 500 or more.

"This illustrates the highly compressed supply chain for all suppliers, including WBEs. That is why we foster ways to open it up again through second- and third-tier WBE supplier goals for corporations and strategic alliances among WBEs," said Denny.

Other key findings:

  • Eighty-two percent of corporations said that global procurement has had no effect or a positive effect on their suppliers who are women-owned businesses
  • Seventy-six percent of corporations say their supplier diversity programs are too small
  • Eighty-two percent of corporations have supplier diversity advocates in different areas of the company
  • Ninety-four percent send supplier diversity representatives to women's business conferences and trade fairs
  • Sixty-seven percent of corporations have a budget of $199,000 or less for the supplier diversity program
  • Eighty-one percent of corporations do not discuss their supplier diversity programs in their annual report
  • Fourty-five percent of CEOs are involved in setting and communicating diversity policies and goals

Seventy-seven WBENC corporate members participated in the online survey programmed and administered by the Center for Women's Business Research.