3 MAJOR CHALLENGES FACING WOMEN ENTREPRENEURS
One of the best days of my life was when I finally realized how I really wanted to spend my working hours: helping women get unstuck and launch their businesses. I was not one of the lucky ones who got their inspiration like a lightning bolt out of the sky. My business idea came like a slow-moving storm that finally hit 15 years into my corporate career.
I was equal parts exhilarated and terrified.
Women face extra challenges when starting a business, including:
Limited funding:
While funding is a challenge for all entrepreneurs, it’s even harder for women. A 2021 article in the Harvard Business Review noted that after years of increasing, venture capital funding for women-led startups decreased from 2.8% in 2019 to 2.3% in 2020.(Note that 2.8% was an all-time HIGH! Meaning most money goes to male-led startups. But that’s a conversation we’ll save for later.)
The news is only slightly better when it comes to bank financing. According to Lendio, while women own 42% of American businesses, only 24% of companies that use bank financing are women-owned.
Why is this important? The first rule of business is don’t run out of money (DROOM). Cash flow is king. You need capital to pay for equipment, supplies, and, if you are lucky, staff in the early days. There is often a delay between the time money starts flowing in and when the bills are due. Capital from outside sources can help fill the gap.
2. Balancing responsibilities:
Ask any woman entrepreneur what she needs to start a business, and she will most likely say time. For partnered women with children, it is something more profound. It has been well documented that women do almost twice as much domestic work and childcare even though they outnumber men in the paid workforce. Though the entrepreneurial experience of single mothers has not been studied in-depth, it’s safe to assume that these issues are magnified. Finding time to research whether you should incorporate as an S-Corp or LLC or think through new ways to reach your target market ends up on the “wish plan” instead of the business plan. Having social support to balance starting a business and family and social obligations is crucial.
3. Lack of confidence.
A critical factor that influences whether someone starts a business is their belief that they have the skills and capabilities to act on opportunities. The GEM 2018/2019 Women’s Entrepreneurship Report noted that globally, 43.4% of women compared to 55.6% of men believed that they had the capabilities to start a business. So why do women still lag men despite being better educated and more qualified than ever before? GEM notes that “it is most likely related to perceptions that being an entrepreneur is a male or masculine occupation which results in women having lower self-efficacy in their perceived ability to be entrepreneurs.” However, S&P’s When Women Lead, Firms Win report found that women-led organizations perform better and have higher profit margins compared to male-led companies. And that the economic benefits translate into profits of up to $1.8 billion globally.
Say what?!
I’ll say it again for the people in the back: when women lead, companies win and the world wins. As Glennon Doyle says, “we can do hard things.” And apparently one of those hard things is kicking ass at leading businesses.
The risk of failure is high!
So, how can I turn my idea into a successful business?
In the following posts, I’ll share ideas and strategies you can use to take your idea and turn it into a successful business. They include hard-won lessons I learned working in Product Management where I had some products flop and others succeed wildly. They’ll also include the latest information from the field and professionals to help guide you on your startup journey.
Next Steps
Ready to start your business? Looking for proven strategies to help you get started? Get a sneak peek at the lessons I learned: Download a copy of the six steps to creating a product that sells itself infographic.
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