The number of women-owned businesses are increasing every year. The trajectory for this includes significant growth; growth that is poised to continue indefinitely. However, the challenges faced by female entrepreneurs are significant. They often must deal with limited access to funding, balancing business and family life, and a lack of sufficient mentorship from the very start, (which is almost always resolved once they are up and running). While male entrepreneurs and female employees may have to deal with the same or similar issues, female entrepreneurs tend to take them on with an added degree of pressure.
Seventy-three percent of women business owners cite lack of capital and cash flow as their top challenge. This is because female entrepreneurs feel they are sometimes not taken as seriously by potential funding sources, whether that be a bank or a venture capitalist (VC) investor. This attitude has caused only 25% of women entrepreneurs to seek business financing compared to 34% of male entrepreneurs. In reality, the numbers don’t lie. Women use credit cards, while men acquire equity investors.
Being a successful entrepreneur is a 24-hour a day job, seven days a week. For female entrepreneurs this generally translates to higher rates of satisfaction with their work-life balance. Of all female business owners, 78 percent believe that they’ve achieved work-life balance. Much higher than the 34% of full-time male workers that believe the same. Cheril Clarke of PhenomenalWriting.com and PhenomenalSpeeches.com says, “It’s vital to me to be an entrepreneur because it allows me to control my future. Though much more challenging than working for someone else, the rewards are greater.”
And challenging it can be. While entrepreneurship seems to offer greater freedom, it can also contribute to economic insecurity. After all, 50% of small businesses fail by their fifth year. And women-owned businesses are disproportionately in industries where the median receipts are less than $225,000. Businesses with receipts of less than $100,000 are more likely to fail. Since 62% of women entrepreneurs depend on their business as their primary source of income, there is often a constant fear of failure or financial ruin. Women are also more likely than men to put in extra work hours at night. This can lead to increased stress from neglecting rest and relaxation. However, being a woman-owned business may mean working harder, but it also means that your success is greater as you achieve it! Don’t let the statistics get you down – more than half of all women-owned businesses succeed to great proporations!
Out of women that have founded businesses, one of the greatest challenges arises when 48% cite a lack of available mentors or advisors as holding them back. According to the Service Corps of Retired Executives (SCORE), mentorship increases the likelihood of a business opening and staying open. Working with a mentor for five or more hours greatly increases an entrepreneur’s likelihood of business success. And female entrepreneurs experience greater success when they are mentored, regardless of their mentor’s gender. This clearly shows that a lack of mentorship for women entrepreneurs can have a detrimental effect.
Despite these obstacles, women still turn to entrepreneurship as a way to make a living. In fact, female entrepreneurship grew by a staggering 114% between 1997 and 2017. There is a sense of optimism among all female business owners. Every day in the U.S., women start about 849 new businesses. What makes women willing to face the risks and become entrepreneurs? Polls have shown that the top five reasons women in the U.S. start their own business are:
1. They are ready to be their own boss.
2. They want to pursue their passion.
3. They are dissatisfied with corporate America.
4. An opportunity presented itself to them.
5. They were laid off or their job was outsourced.
Women want more control over their lives, more flexibility in where and when they work, and to pursue work they are passionate about. Research shows that many women start businesses because it seems like a better alternative to the demands of corporate life. Some do it out of economic necessity. Others just want more autonomy. Ultimately, it seems that women want the freedom to guide their lives as they want and desire to do meaningful work. As Cheril Clarke says, “I want to create great work. I want to live an exciting, fascinating, and forward-moving life. I don’t want to be stagnant…. I want to bring a sense of “I’m excited to be here.” This is what gets me up early and keeps me up late.”