In the past 20 years, the number of female-owned businesses in the United States has risen 114 percent. While this statistic is an excellent milestone for business-minded women, the story behind this number reveals some startling truths.
According to a 2018 Inc. article, the reason for the almost exponential increase in women-owned businesses is connected to many of the struggles women face in the workplace. The article highlights a 2017 report that revealed that women are engaging in “necessity entrepreneurship.”
Typically, this would mean that someone launches a business to address an economic need. However, in this case, many women are jumping into business ownership for non-economic reasons such as gender discrimination in the workplace, a desire for greater autonomy, a better work-life balance, and childrearing.
Unfortunately, many women are moving into entrepreneurship because they feel they have no choice. At the same time, these individuals are also facing unique struggles as entrepreneurs. While women may be finding better flexibility and autonomy outside of the workplace, they still may be facing obstacles that hinder their progress. Below are some of the most common issues female entrepreneurs are experiencing and strategies to overcome them.
Lack of Mentorship
Mentors are critical to professional development. Not only do they provide wisdom and knowledge, but they can also connect mentees with influencers in their network. Both characteristics can be incredibly valuable to a female business owner.
Unfortunately, many women have never had a mentor. According to a study by Development Dimensions International (DDI), a Pennsylvania-based global HR consulting firm, 63 percent of their 318-respondent group of businesswomen had never had a mentor.
How to Overcome This: If you are still searching for a mentor, take a look at female-based business affinity groups or even business associations in your city. Many do offer mentorship programs that can connect you with mentors. Also, friendship and alumni networks are critical. A “friend of a friend” may know someone that can fill the role of mentor.
Juggling Business and Family Life
Even though women are taking on careers and working hours that are almost on par with men, most still handle more housework and childrearing activities than men. This practice can make managing the everyday demands of running a business almost impossible. Life can be even more challenging for a woman who is the only parent in the home.
How to Overcome This: An approach to managing family obligations and business demands can vary depending on individual needs. However, a great starting point is taking a day to see where most of their time goes. Spend a week observing your busiest days, your children’s schedules, and the time needed for household duties.
You can then begin to see where you are saving time and where your problem areas are. Unaddressed household chores or errands can take away from your productivity. So, delegate tasks to your partner or older children, and see where you can acquire additional help if need be.
A Lack of Access to Investment Funding
An article from Business Insider France revealed that on average investments in enterprises founded by women were around $935,000, while investments for men were $2.1 million. There is a wide gap in investment and venture capitalist funding for female entrepreneurs.
However, the same article showed that for every dollar of funding, startups founded by women generated 78 cents for every dollar while men only made 31 cents. Unfortunately, women are fighting a gender perception problem regarding business investment.
How to Overcome This: Many female investors have realized this funding gap and have developed firms to fund women entrepreneurs. There are a variety of female venture capitalist firms that have emerged over the last decade.
So, see if one of these is in your area. There are also resources like the Female Founders Fund, Backstage Capital, and Women’s VC Fund that provide funding for women and underrepresented groups. Also, be sure to create relationships with potential funders. Research and attend pitch competitions, and business accelerator events in your area as many venture capitalist should be in attendance.
Recognizing The Value You Provide
A professor of social psychology at NYU asked 64 women and 68 men to compose an essay about computer shopping. When both groups were asked how much they would pay someone to produce the same composition, women paid themselves 18 percent less than men even though their work was seen as equal by other reviewers. Typically, women undervalue their skills and services when compared to men. This study easily translates over to business, as women may be more likely to undershoot their pricing. This activity can make it challenging for women to profit from their company.
How to Overcome This: Take a look at your skills and the services you provide and begin to get a feel for the typical costs for your service. This process allows you to have the confidence to ask for what you are worth. Also, feel confident in the fact that you know your business better than anyone. If you have done the work, learned about your industry, and invested in your learning, then you should feel prepared to talk to clients and investors.
Female entrepreneurship is on the rise. However, women are pursuing business ownership out of necessity. In addition to this, many are finding that they are facing unique struggles that male business owners may not encounter similarly.
While these difficulties will arise, the good news is that there are steps women can take to tackle these problems. Hopefully, as more women step into entrepreneurship, many of the struggles above will evolve into issues that are more manageable or even non-existent.
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