Three Factors Influencing the Growth of Women-Owned Businesses
Gone are the days when entrepreneurship was viewed as a men's only club. Today, owning a business is the ultimate feat in the career world for both men and women. Entrepreneurs have the freedom to set their own hours, pursue projects that interest them and create that sometimes elusive work-life balance. It's a sweet gig but not without its challenges, particularly for women. Each year more women take the plunge to launch and lead their own companies. Although, entrepreneurship is still largely enjoyed by men, who make up an estimated 71 percent of business owners in the U.S., the landscape is gradually changing in favor of women. Across all ethnicities, the number of women-owned companies is increasing faster than the number of men-owned businesses according to data released last year by the U.S Census Bureau. However, women still tend to face issues that can create roadblocks for growing and scaling their businesses. These factors include risk tolerance, culture and societal norms, and the availability of financial resources. Being cognizant of these challenges is the first step in overcoming them. 1. Risk tolerance is a very important skill for entrepreneurs. You need to be able to handle risk and to move forward after failure. While women are starting businesses in increasing numbers, their businesses tend to be smaller and take longer to scale than other demographics. In order for women to grow their business, they need to be more comfortable with risk to achieve growth and profitability but it doesn't come easy. The level of risk tolerance is not always about assuming or avoiding risk but managing it. Depending on the size and scope of the business, it may require that you put your career, personal finances and, sometimes, even your mental health on the line (afterall, entrepreneurship can be a zany, yet, thrilling ride). 2. Cultural influences and societal norms in the U.S. have the potential to create unique barriers to business growth, scale and profitability. Despite progress in the equitable sharing of responsibilities on the home front, family-related responsibilities such as caring for children or aging or sick relatives, and running of the household can still fall largely on the shoulders of women. Also, while the rise in the number of single-parent\female head of household scenarios is sometimes a motivation for starting a business, it can also present a challenge when everything falls on one person's shoulders. Finding a nurturing community, incubator or accelerator to share responsibilities, brainstorm ideas and provide support is critical. 3. The availability of financial resources such as, business loans, government grants and investor funding. These types of resources can empower women to thrive as the founders of their own companies. Increasingly, investors are recognizing the unique perspective and skills women can bring to the table. Additionally, they are, albeit slowly, realizing that encouraging this demographic is a critical imperative. In order for startups to be competitive and grow, entrepreneurs need to find funding for their ventures. However, despite this shift, women entrepreneurs continue to experience a higher incidence of being turned down by traditional banks. This has given rise to non-traditional sources such as private grants for specifically women, some federal and state grants, crowdfunding as well as more interest from VCs. While these are but a few interrelated factors which can influence the growth of women-led businesses, they should not be a deterrent for those wanting to make their dream of running their own company a reality.