While it’s true that women have made great strides in business ownership equality, they still face challenges not as common among their male counterparts. Here are four of those challenges and the solutions for overcoming them.
Female entrepreneurs have made great strides in a domain traditionally dominated by men. That shouldn’t be a big surprise though — a 2015 study published by the Centre of Entrepreneurs shows that women are better at taking calculated risks, less prone to overconfidence, and more ambitious overall on the climb up the corporate ladder.
Despite these favorable qualities, female entrepreneurs still face significant challenges that their male equivalents tend not to face. Although the United States ranks as the top country for women entrepreneurs according to the 2015 Female Entrepreneurship Index, the country still received a score of only 71 out of 100 on the Dell Global Women Entrepreneur Leaders Scorecard — meaning women continue to be undercapitalized. Women in the U.S. may hold 52 percent of all professional-level jobs, but they make up only 14.6 percent of executive officers and 4.6 percent of Fortune 500 CEOs.
Here are four challenges female entrepreneurs commonly face and how they can be overcome.
Challenge: Funding and Training Gaps
Studies consistently find that women-led businesses receive less outside funding than businesses led by men. Between 1997 and 2000, only 6% of total venture capital funds were invested into women-led businesses in the United States.
Solution: Before pitching to venture capitalists, know that VCs look for a look for products and services that will produce a big return on their investments. Typically they invest large sums of money, want to invest in businesses with a very large market opportunity (think a $ billion or more); products and services that fill a critical marketplace need; and companies that have a management team that can meet the challenge of growing the business. that have and be sure your product or service fits their requirements. While ensuring that your business provides value to investors, it is important that those investing in your business will provide value, such as industry expertise, to you and not just capital.
If venture capital is still unavailable, women entrepreneurs can fund their business through bootstrapping, applying for grants using credit cards if a loan is unavailable (but be sure you’ll be able to pay the credit card bills on time), asking family and friends to help funding, or by locating other angel investors. Microlending is another potential source of funding. A microloan is simply a small loan, available to some businesses that cannot get a traditional business loan from a bank. There are a variety of funding sources that provide microloans, and a list of organizations that offer them can be found here.
Challenge: Government Contracts
In 1994, the federal government set a goal to spend 5% of its contracting dollars on women-owned businesses. In March 2016 — after more than 20 years — it finally met its target. According to Ann Sullivan, the head of government relations for Women Impacting Public Policy (WIIP), the government was able to meet its goal after adopting new rules in 2011 that would allow agencies to set aside specific contracts for bidding by women-owned businesses only. Despite this milestone, women-owned businesses still have a 21% lower chance of procuring a federal contract than men-owned businesses of a similar nature.
Solution: While the numbers are still disappointing, women entrepreneurs can take strategic steps to earn more of the government contracts currently available, including state and local contracts, which can be more friendly to small businesses.
Women entrepreneurs should also get their business certified as woman-owned. This is necessary to do business with both public and private corporations, in addition to local, state, and federal government agencies that have opportunities that have been set aside for woman-owned businesses. Organizations such as the Women’s Business Enterprise National Council (WBENC) and The National Women Business Owners Corporation (NWBOC) can provide national certification, as can several state and local agencies.
Challenge: Work-Life Balance
While work-life balance is a challenge for both men and women, women can often feel more conflicted between work and family life due to social and cultural norms. According to a 2013 Pew Research Center survey, mothers with children are three times as likely as fathers to say that being a parent made it difficult for them to advance in their career. Fortunately for women entrepreneurs, there are several ways to balance out the burden of owning a business and maintaining family and social life.
Solution: The concept of work-life blend has been gaining traction — and for good reason. For many entrepreneurs, it can be difficult to fully shut off from work, and creating a work-life blend means that there is no “ideal” balance between the two to strive for. Instead, entrepreneurs should work for a blend of priorities, which can be regularly shifted, to achieve balance rather than perfection. To find the best work-life blend, women entrepreneurs may need to learn to be comfortable delegating tasks and asking for help when necessary.
Challenge: Gender Discrimination
Women entrepreneurs often face both overt and subtle gender discrimination — for instance, small-business loans for women-owned businesses dropped 70 percent between 2007 and 2013. Anecdotal evidence shows that women may not be taken seriously by investors and that they may not be seen as hard workers, due to socially reinforced expectations that women are the primary caregivers at home.
Solution: Being a woman doesn’t have to hold you back as an entrepreneur, but you may need to work harder and get creative to earn the respect of your male colleagues and contemporaries. Georgene Huang, founder of the female-centric company review site Fairygodboss, agrees. “I generally don’t think gender inhibits or holds me back as an entrepreneur in any way,” she says. “The main thing is that sometimes it’s hard to explain to men how important and useful Fairygodboss is … [which] can be a challenge when we need men to support us (whether they are male advisors, prospective customers, or investors).”
The Future Is Bright
The future of female entrepreneurialism is certainly bright — there are more successful female entrepreneurs than ever and, according to the CEO of Ellevest, a “growing ecosystem supporting women entrepreneurs and women-owned businesses.”
While women may face unique challenges along their entrepreneurial journey, the rewards are worth the effort.
