Women-owned businesses contribute $2.8 trillion to the US economy. That is one in five firms with revenue of $1 million or more are woman-owned. An astounding number if you think of the many obstacles that women entrepreneurs face.
Why I work with women entrepreneurs.
I really enjoy working with women, make that LOVE working with them! Mostly because I can relate so much to women entrepreneurs and know I can help them succeed. Don’t get me wrong, I like working with men too, and have had very successful business relationships with them.
I have learned so much over the years through my experiences and writing and researching about women entrepreneurs. Firsthand knowledge of the challenges that women face every day in business is a shorthand that I don’t need to learn. It is a privilege to be able to share that knowledge and learn at the same time. It is my experience that women seem to be more open to this kind of exchange.
Here it goes, this is not guy bashing but…… male entrepreneurs are often cocky and difficult to convince in business – to their detriment. I have encountered, it’s my way or the highway. Too many men have read the Steve Jobs bio and bought into it without having the genius to back it.
Why are women important?
We are one of the biggest contributors to the economy. The McKinsey Global Institute (2015) estimates that a scenario in which women achieved complete gender parity with men could increase global output. The potential impact, given the opportunities, could lead to more innovation and growth.
What are some of the BIG differences? Let’s face it, women face very different challenges than men.
I am not going to lie, it’s still tough for women in business, especially entrepreneurs. Women have greater ambitions to become serial entrepreneurs and we are equally ambitious to start and scale businesses. Our barriers to entry and success are much greater.
What about the Money?
There are some BIG issues that most women entrepreneurs face or will face. First and foremost is that there is still no gender equality when it comes to money. Even though women represent over 50% of the labor force, when it comes to money and power, women have very little of either. As women, our Socioeconomic status (combination of education, income, and occupation) is lower than men – this is comparing equal education and occupation, the big disconnect is INCOME.
Despite the fact that women overall continue to outnumber men in college degrees. On average salaries of American women are about 77.3% of that of American men. In the US the median household income for women is $29,022 vs the male median household income of $40,762. This disparity really affects entrepreneur women, men might have an ability to save more due to a higher income, providing a cushion to launch a new venture.
Let’s talk about access to capital
To put this in perspective – the Small Business Administration invests $17 million in Women’s Business Centers; these 106 centers reach 100,000 women business owners with coaching and training, that is just 1% of the 10 million women-owned businesses in the U.S.
Women are also less likely to access their own network to raise capital – we just don’t ask compared to men.
Who is in charge?
Today women lack a seat at the table in the most important bastions of wealth and power – boardrooms. Why is it important that there are less than 17% of women in the boardroom of Fortune 500 companies? Fortune 500 companies set the tone in our economy, provide role models and access to wealth and power – without these it is difficult to make change.
Work Life Balance
We juggle so much in our everyday lives, balancing business and family priorities is not easy – even though some of us make it look that way. According to a 2013 Pew Research Center survey, most women bear a heavier burden when it comes to balancing work and family, this can make it harder for women to advance in traditional careers. 84 % of single parent families are headed by women. Being the main breadwinner of a family can hinder your ability to take a risk and start a business.
What do women do differently?
Here are some points that sum up the differences.
- 80% of women say they see opportunities where others might see risk, compared to 67% of men.
- An increase in the number of women in business leadership positions is correlated with increased business returns and payout ratios.
- Display less overconfidence when evaluating the track record of their business, despite reporting higher profits in comparison to men who overstate. 87% vs 73% men. You could say we are masters of under promising and over delivering, I see this with my clients. Women consistently show a preference to be conservative, I think that there is a direct link to how we are raised – girls are often told that it is not polite to be boastful.
- Seek more opportunities in risky environments and are better financial risk takers; After all we need to seek out places where we can compete, these may lead to riskier and less tested environments that may be more open.
- Show equal or more determination when it comes to starting or scaling up the business. In my experience women founders are like warriors, they persist despite failure and disappointment – because of the difficulties that many women entrepreneurs face in business maybe we are more accustomed to both.
- Prefer to reinvest business profits over making equity investments to sustain business growth.
What we need to succeed
- Money – because that is the lifeblood of any business. This means equal access to capital and equal compensation.
- Visibility. I mean REAL examples of successful female entrepreneurs in the media. I don’t mean the Sheryl Sandberg’s of this world, who have nothing in common with the average female entrepreneur.
- Cultural relevancy. You could ask anyone on any street corner who Mark Zuckerberg or Elon Musk are and they would know. But what about Julia Hartz of Eventbrite, and Kathryn Petralia founder of Kabbage, ladies need equal time!
- Creating opportunity. Women simply don’t get the same access to wealth than men do.
- A rightful seat at the table – with only women hold just 4% of CEO positions and only 17% of board seats at S&P 500 companies, according to Catalyst
- Recognizing the Difference. Women lead and do business differently. I have found that in most B-Schools women are taught to lead and negotiate like men. I know this was true for me, and often questioned why I should learn to lead like a man.
- Change the face of VCs. People tend to do business and have trust with others like themselves. VCs are dominated by white males who may be less attracted to fund minorities overall. Although VCs fund women-led businesses that are “women’s domain” they are less inclined to fund for example tech businesses. This is a missed opportunity for both VCs and our economy as tech is a driver for economic growth.
- This is changing, and even the male led VCs recognize a missed market opportunity in women entrepreneurs.
Some Resources – Check back for more