According to statistics released by the National Association of Women Business Owners, more than 11.6 million firms are owned by women in the U.S., and these firms generated a whopping $1.7 trillion in sales in 2017. Those numbers are up from 9.4 million firms and $1.5 trillion in sales in 2015.
Woman-owned companies account for 39 percent of all privately held firms in 2017 (up from 31% in 2015). It is clear that, while women entrepreneurs are active and growing, there is still much room for improvement in equalizing entrepreneurial opportunities for women. For instance, only 1 out of 5 firms with revenue in excess of $1 million is woman-owned. And only 4.2% of woman-owned business have revenue in excess of $1 million.
Why is that the case? All entrepreneurs face challenges, and entrepreneurship is not for the faint of heart. However, proportionately speaking, women entrepreneurs face some challenges that their male counterparts simply do not.
Here are a few of those challenges, along with some recommendations for how they can be addressed.
1) Societal Pressure to Act in a Certain Way
Female entrepreneurs may face pressure from associates, clients, and creditors to act in a more genteel, polite way than their male counterparts. The problem with that is, when women give in to this subtle societal pressure, they may be perceived as weak and ineffective.
While it is true that entrepreneurs do not have to be aggressive to be successful, they do have to be assertive in bringing their vision to life. For women, the line between assertiveness and aggressiveness is often blurred by society at large. Whereas an assertive man may be seen as a strong leader, an assertive woman may be seen as a shrew or diva.
What is the solution? Since it is almost impossible to shift societal perception on their own, women entrepreneurs must rise to the challenge by assuming their rightful place at the helm of businesses they create. Embrace assertiveness when it is needed, and relish the work of bending a little corner of society to your will.
2) Tendency to Avoid Taking Risks
Entrepreneurs must embrace risk in order to succeed, and studies indicate that males are more apt to do so than females. Risk avoidance can run deep in the female psyche, largely due to the societal roles that women have typically had.
However, if you want to succeed as a woman entrepreneur, it is vital to understand and embrace the concept of risk taking. That is not to say you should proceed with your entrepreneurial plans with wild abandon. A solid risk assessment is a part of any business plan.
Rather, embracing risk means you are willing to put something of value on the line in order to reach your goals. Make peace with the fact that starting any new business involves some factors that you simply cannot completely control and that will expose you to a certain amount of risk. When you weigh risk against potential rewards, you will likely see that risk is manageable with a little creativity and out-of-the-box thinking.
3) Fear of Failure
Akin to an aversion to risk is the fear of failure. Many women have been schooled to believe that failure is "not an option." That sounds great on a movie poster, but in the real world, many new business ventures fail.
According to the U.S. Bureau of Labor Statistics, only 50 percent of new businesses last past their fifth anniversary, and that number drops to 30 percent at the 10-year mark.
Those statistics may not at first glance inspire great confidence. However, if you shift your focus, you can overcome a fear of failure. So what if 70 percent of businesses fail within 10 years? All that means is that you have a 3 in 10 shot of being successful a decade into your venture, and you can increase those odds by making good business decisions in the interim.
Moreover, there are abundant examples of entrepreneurs who failed spectacularly with one venture and then hit a home run with another. Failure is not the end of your journey; it is merely a step in the process toward success.
4) Strong Desire for Work-Life Balance
A good work-life balance is the goal of many entrepreneurs, whether male or female. However, for women entrepreneurs, sometimes this is a much more elusive achievement. For the most part, women may still find themselves handling the bulk of household chores, child care, and care of aging parents, in addition to the tasks they perform at work.
In such an environment, work-life balance is incredibly difficult to achieve. One strategy that women entrepreneurs can steal from the playbook of their male counterparts is the art of delegation. Learning how to delegate tasks in your business as well as in your personal life can help you achieve a better work-life balance. Hire an assistant, search for top talent, and build strong teams that can handle the work you delegate. Perhaps most important, do not feel guilty for delegating tasks, since this is one of the top skills of an effective leader.
5) Failure to Showcase Professional Accomplishments
For many women, the concept of highlighting their own accomplishments is somewhat repellent. Trained to believe that showcasing talents is the same as boasting, some women either consciously or unconsciously minimize their successes. Sadly, this is often coupled with emphasizing their deficiencies.
In order to be competitive in a tight entrepreneurial market, you have to learn to highlight your achievements. When networking with others who can help you advance toward your entrepreneurial vision, learn the subtle art of promoting yourself and your brand. There is no shame is underscoring what you have done, are doing, and will do in the future.
Showcasing your talents and your accomplishments will have the added benefit of increasing your confidence and ultimately, the confidence that others have in your ability to succeed.
6) Limited Access to Funding
Most entrepreneurs, regardless of gender, may encounter problems with funding their business ventures. However, women entrepreneurs historically have less access to venture capital than their male peers. This may be partly due to gender bias in lending practices, as well as societal views of the relative merits of female business owners.
However, there are some excellent resources that are available to women that should not be discounted if you are looking for funding. The U.S. Small Business Administration, for instance, offers several resources for women entrepreneurs, including specialized loan products, access to professional financial counseling, and more.
We at Independent Bank would love to talk through additional funding options with you!
Regardless of which options you pursue to secure funding, your success in finding it hinges, in large part, on the details of your business plan. Crafting a solid business plan is one of the essential components of funding successes. Therefore, if you need help with crafting such a plan, do not hesitate to invest in hiring a professional to help you.
7) Lack of Professional Mentors
In a world filled with excellent business role models and mentors for men, women entrepreneurs often feel like the odd woman out when it comes to building professional relationships. However, this may be more of a mental hurdle for women than it needs to be.
Role models and mentors do not have to share your gender to be inspiring and educational. While it is always nice to find a female mentor, you do not have be reluctant to reach out to male professionals whom you admire in order to learn and grow.
Favorable Factors for Female Entrepreneurs
Despite the challenges that women entrepreneurs face, there are some factors that work in favor of females in business. For instance, female entrepreneurs are often more organized and focused than their male peers, which can give them a significant competitive edge once their business is established. Female entrepreneurs tend to make a more thorough assessment of risk than men, which can work in their favor if they are careful not to let risk assessment turn into unbalanced risk avoidance.
Additionally, women entrepreneurs often excel at communication and other people skills, making them excellent leaders and team builders. As proactive listeners, they are often able to keep their finger on the pulse of the market and their internal company culture to ensure better brand positioning.
Lastly, women entrepreneurs often show remarkable resilience and persistence in the face of obstacles and hardships. These qualities are key components for every entrepreneur, and women often have them in spades.
The Bottom Line
Entrepreneurship is fraught with hurdles, but perhaps this especially is the case for women. Female entrepreneurs can find success by:
- Resisting societal pressure to behave in a certain way.
- Not permitting risk assessment to become unbalanced.
- Embracing the possibility of failure on the road to success.
- Learning to delegate tasks personally and professionally to achieve good work-life balance.
- Showcasing professional achievements more fully.
- Investigating multiple sources of business funding.
- Finding professional role models and mentors from which to learn.
Following these recommendations, women can make huge strides toward joining their male peers in the ranks of successful entrepreneurs.
