The women entrepreneurship is growing globally as more and more women are starting new businesses both out of necessity and self-motivation. The following key statistics about women-owned businesses validate this:
- There are approximately 13 million businesses owned by women in USA.
- There are approximately 13 million businesses owned by women in USA.
- The women owned businesses are growing @5%.• The businesses that are owned by women generate $1.9 trillion.
The above figures suggest that momentum for women entrepreneurship is building. Despite impressive growth of women entrepreneurship, however, the fact remains that entrepreneurship is still a male domain and start up women founders have to face a lot of hurdles and challenges across the globe. In this article I will deliberate upon hurdles that deter women entrepreneurship but firstly have a look on some interesting statistics about female entrepreneurship:
What do the figures speak?
- 40% of US businesses are women-owned. (Fundera).
- Nearly 9 million Americans are employed by women-owned businesses.(Become.Co)
- There are 114% more female entrepreneurs than there were 20 years ago. (Fundera).
- Women-owned firms represent 39% of all businesses but they are responsible for only 8% of employment and 4% of revenues. (Startup Nation).
- Every day in US, women start about 849 new businesses. (Inc.Com)
- 71% of new women owned businesses launched each day are owned by women-of-color. (Startup Nation).
- For every dollar of funding, startups founded by women generate 78 cents, compared to 31 cents for startups founded by men.(Inc.Com)
Now we discuss some of the top challenges faced by startup women entrepreneurs.
Among all the challenges faced by Women entrepreneurs, the issue of patriarchy is the most inhibiting in nature. It is the mindset of a society that specifies certain roles for women like housewives and subordinate positions. Take the example of the only superpower USA, where no woman has become head of state till date while this has happened in many countries .i.e. India, Israel, Pakistan, Sri Lanka etc. According to Keisha .N. Blain, the president of African American intellectual history society and professor of history at University of Pittsburgh, “Patriarchy is the biggest challenge facing women in the United States”. She further explains the phenomenon by stating that the patriarchal nature of U.S society fosters the perception that women are less qualified and less competent than men.
Imagine what would be situation in other countries when the most developed country like USA has this social perception about women. It is no surprise therefore that there are serious challenges faced by business women.
This tops the list of all challenges and almost every woman faces this. Based on certain preconceived notions the male chauvinistic societies, decide that certain attributes which are essential for controlling and doing a business are male-specific. These are self-esteem, confidence, ability to take risk and making prudent decisions independently.
There is a wide funding opportunities gap between male and female start up business owners. In USA, only 1.3% of the companies that receive venture capital funds are owned by women. (Harvard Edu).The global statistics also present a sordid picture. A 2019 Crunch Base report revealed that female founders received only 3% of the invested capital while companies with male founders received 89% (Rise & Lead women).Some of the reasons underlying low funding to women start up entrepreneurs are as follows:
- Women are considered as riskier investments.
- There is a misconception that women have more potential for failure and men are more prone to success.
- Less women seek financing compared to their male counterparts. Just 25% of the women seek financing for their business which is significantly low as compared to 34 % of men seeking finance.(Small Biz Trends)
To maintain a fine balance between family and business is quite a big challenge for most of the women entrepreneurs especially at early phase. The main problem revolves around time management as women need to give equal importance to start up and family. In most of the cases the support system is quite weak because people view the female entrepreneurship as merely an extension of their family responsibilities or just hobby.
Getting acknowledged is not that easy:
The societal norms and misleading perceptions do not lend people to acknowledge women’s struggle as a startup founder. Generally, in a male dominated industry and workplace the leadership role of women is seldom accepted. The CEO of American Chemical firm Jelmar in an interview to Business News daily stated the following:
“As a female entrepreneur in a male dominated society, earning respect is a struggle.”
Based on conventional wisdom regarding women certain social misnomers (Myths) are present in almost all the countries. Some very common beliefs are listed below:
- Women are not good negotiators.
- Women are bad at numbers.
- Women can’t lead due to lack of confidence.
The researches and studies have proved all these myths and perceptions as totally wrong.
Women of color face insurmountable hurdles in their startup businesses compared to both male and white women. This result in their achievements that are undermined. The average revenue for African American women-owned-businesses is less than 20% the average revenue of all women-owned businesses. (Become. Co).Check some of the challenges faced by African American women entrepreneurs:
- Additional racial bias in addition to usual gender bias.
- Dismal representation of colored women in business meetings.
- Lack of access to networks.
- Lack of mentorship.
- Limited access to capital.
Women are perceived as weak managers because of their soft nature and polite manners. If a woman is aggressive and commanding she is viewed as bossy unlike their male counterparts who are described as Confident for the same attributes. The management issues arise due to lack of access to knowledge and training especially in following disciplines:
- Financial literacy.
- Entrepreneurial skills.
- Marketing techniques and strategies.
Not enough support:
Women who start a business generally do not have family support. They lack mentors and role models or any other person to guide. In such situations when they are literally on their own they miss a guidance for dealing with teething problems. According to Inc nearly half (48%) of the women founders of startups cite that a lack of advisors and mentors is responsible for holding them back.
The lack of a support system hinders the growth of the startup, because the female owners find it difficult to tackle even the common mistakes by entrepreneur which are not gender specific.
Lack of mobility:
In many cases limited mobility may cause problems and become a real challenge for developing contacts and establishing networks. This is more obvious in underdeveloped countries. There are various reasons which make mobility of women entrepreneurs difficult. Have a look on some of these:
- Responsibilities towards family.
- Family restrictions to travel abroad or to other cities.
How can Women entrepreneur successfully thrive?
As discussed above, the challenges for female business entrepreneurs (especially for startups) galore but still there are confident and bold women who are running thriving businesses overcoming those challenges? Here’s what can be done and how to go about it:
- The Government and NGOS must provide counselling and training to aspiring women entrepreneurs.
- Women on their own part, must increase their entrepreneurial skills using online resources.
- Seek help from Forums focused to business women. There are many forums such like efinternatioanl and FEW (Forum for women entrepreneurs).
- Have confidence in yourself. Sharon Davis, director of Dales Marketing, states: “I think as women we struggle with confidence in ways that men don’t.
- Create schedule and system to have work-life balance.
- Get inspiration from successful female business entrepreneur’s stories.
- To tackle the issue of funding, women need to make efforts to involve more women investors. Presently only.
For women the struggle is not yet over .Things are however improving. There are 12.3 million businesses that are owned by women in US today. (Small Biz Genius).This is proof of how women entrepreneurs are harnessing their capabilities to excel as founders of businesses. With a boost in synchronized efforts by societies, Governments and women themselves to provide equal opportunities and enhance learning, the gender gap in entrepreneurship will be no more.