Women-owned businesses continue to grow in number across the United States, yet a significant revenue gap persists when compared to other business segments. According to recent data, women-owned businesses now represent 40.6% of all U.S. firms but account for only 4.6% of total business revenue. This disparity highlights the ongoing challenges many women entrepreneurs face in scaling their operations beyond startup phase.
Chanel Christoff Davis, founder and CEO of Dallas-based sales tax advisory firm Davis Davis & Harmon, has navigated this landscape by transitioning from government contracting to private sector corporate clients. Her firm’s evolution offers insights into how revenue structure, not just revenue access, affects the ability of women-owned businesses to scale.
Government Contracting Provided Initial Market Entry
Davis launched her firm in 2001 after winning a contract with the Texas State Comptroller to audit companies for unpaid sales taxes. The assignment provided valuable exposure to corporate financial environments and complex multi-state compliance practices. Additionally, the firm expanded its public-sector work to include contracts with municipalities such as the City of New Orleans.
However, the economics of government contracting presented significant obstacles to growth. According to Davis, public-sector clients did not pay market value for services, and payment cycles often extended six to nine months. Meanwhile, the firm needed to cover operating costs through short-term borrowing, which reduced profit margins and limited the ability to hire staff or invest in infrastructure.
Revenue Structure Constrained Scaling Potential
While government contracts delivered steady workflow and operational credibility, they did not provide the financial foundation necessary for expansion. Davis recognized that predictable revenue alone was insufficient if compensation levels and payment terms prevented reinvestment in the business. The disconnect between stability and scalability became increasingly apparent as she evaluated long-term growth strategies.
Research on women-owned businesses indicates that employer firms—those with paid staff—generate the majority of revenue within the segment. Women employers accounted for 82.2% of total revenue generated by women-owned businesses, according to the 2026 Impact of Women-Owned Businesses report. This underscores the importance of crossing the threshold from solo operation to employer firm, a transition that requires sustainable revenue streams.
Corporate Relationships Opened Private Sector Opportunities
The shift toward corporate clients emerged organically through relationships developed during government audit work. While working alongside CPA firms, Davis frequently consulted with business owners and finance teams facing sales tax audits. These conversations led to independent requests for assistance outside the government contract framework.
CPAs began asking Davis to help their private clients with audit defense and compliance issues. Over time, these individual requests evolved into a private advisory practice that offered significantly better compensation and payment terms. Christopher Bass, VP of Tax at a Fortune 100 company, noted that Davis Davis & Harmon consistently delivered measurable sales and use tax results across multiple states.
Specialization Strengthened Market Position
Rather than competing broadly across accounting services, Davis focused exclusively on sales and use tax advisory work. This specialization allowed the firm to develop deep expertise in an increasingly complex field, particularly as digital commerce expanded. The strategy proved advantageous following the 2018 Wayfair decision, which gave states broader authority to tax online transactions and increased demand for multi-state compliance support.
By concentrating on a narrow specialty, Davis positioned her firm to compete effectively despite its smaller size. The approach created differentiation in a market dominated by large accounting firms with broader service portfolios.
Service Diversification Reduced Client Concentration Risk
While focusing on sales tax advisory work, the firm diversified its service offerings within that specialty. In addition to audit defense, Davis Davis & Harmon expanded into refund recovery, multi-state nexus analysis, voluntary disclosures, and compliance support for companies operating across jurisdictions. This broader service mix allowed the firm to engage clients at different operational stages and reduced dependence on any single engagement type.
The firm also diversified across industries including telecom, retail, energy, and manufacturing. This strategy mitigated risks associated with client concentration and internal champion turnover within client organizations. Furthermore, Women’s Business Enterprise National Council certification provided access to supplier diversity networks and corporate procurement channels that facilitated introductions to large corporations.
Economic Impact Concentrated Among Employer Firms
The revenue gap between women-owned businesses and other firms reflects more than funding disparities or sector concentration. It stems significantly from whether revenue streams support the transition from solo operation to employer firm. Black women-owned employers outpaced national growth rates in firm count, employment, and revenue between 2022 and 2025, demonstrating the potential for scaled growth within the segment.
Davis’s trajectory illustrates how capabilities developed through government contracting can support repositioning into higher-margin markets. Public-sector work provided regulatory insight and access to corporate environments, while private advisory engagements created the financial structure needed to build a team and pursue larger opportunities. Terrie Moore, Manager of Tax Compliance at Ericsson US, described the firm’s performance as exceptional, and Ericsson recognized Davis Davis & Harmon as a Supplier of the Year.
As women-owned businesses continue expanding their market presence, the distinction between participation and scalability will increasingly shape workforce and economic outcomes. The composition of revenue streams, including compensation levels and payment terms, plays a critical role in determining whether firms can successfully make that transition and contribute proportionally to overall business revenue generation.
