Women face many challenges in the workplace, and even more in boardrooms and when trying for corner suites, but those challenges are particularly distilled when women move to start their own businesses. Between the difficulty in finding affordable financing, working within and against systematic bias against their gender, and a lack of adequate learning and mentorship opportunities, women-owned businesses can struggle to thrive.
This can reinforce the idea from some economic sectors that women aren’t “cut out” to be entrepreneurs. It’s also important to note that these challenges increase dramatically for women who are people of color, disabled, or otherwise marginalized.
Understanding and quantifying the challenges faced when starting a woman-centric business may help to break down the systematic prejudices and level the playing field for women in the entrepreneurial sector.
When women approach traditional banks for lending, their approval rates are as much as 20% lower than they are for male-owned companies. Although alternative lenders, such as online lenders and loans through payment processors may be more forgiving to marginalized borrowers, these lenders generally have higher interest rates. This can put a woman-owned business at an immediate disadvantage compared to a company owned by a male competitor.
There are programs available through organizations such as the Small Business Administration, but generally a woman needs to have been operating her business for a year or two before she is likely to be approved.
Startup capital is similarly difficult to access, especially if a woman is seeking venture capital. Few VC firms have women on the board, and boards without women in the room are much less likely to approve a pitch from a woman CEO.
It is worth noting that women are having significant success in the crowdfunding sphere, but this is no replacement for high quality loans available through traditional lenders.
Oprah Winfrey, a successful media mogul if there ever was one, has said “surround yourself with only people who are going to lift you higher.” In the world of business, this means finding a mentor. In fact, Richard Branson of Virgin has called mentors “an invaluable asset in business.”
Mentors can answer questions, help entrepreneurs connect with their own partners and vendors, and can offer specific advice on overcoming challenges face in building a business long term. While men may be willing to provide mentor relationships to young women entrepreneurs, it is this last category where they may be unable to offer advice.
Women face particular challenges in the entrepreneurial sphere that women simply do not; multiply marginalized women even more so. Men may be able to empathize with these struggles, but they may not be able to give targeted suggestions on overcoming discrimination that they have never faced.
The only solution to this problem is for women to continue to push into board rooms and the highest levels of business so that these women can help others gain success along the way, but that struggle will take time. Women can seek out mentors online and through business focused social media sites, at least letting them overcome the potential challenges of distance in their search.
Finding Balance Between Expectations And Individuality
Every entrepreneur needs to find a way to be an individual within their business, but for women, this can become particularly challenging. Women are often expected to act in particular ways in the business world. They may face prejudice that they are likely to act in stereotypically feminine ways, which are then used to discredit their ability to be successful entrepreneurs, or they may be expected to act like “just one of the boys.”
This male-centric attitude can pressure women to tolerate sexual harassment and other unacceptable behavior. It can also make it more difficult for other women to succeed, as it presents the only possible version of acceptable behavior to be a sort of watered down male behavior.
This is particularly frustrating since companies with women in the boardroom have been financial results than those with less diversity in the highest levels of the company. More diverse perspectives are always beneficial for a company; discouraging women, or other marginalized people, from sharing those perspectives is demonstrably bad for a company.
Women entrepreneurs face many challenges when they try to start companies focused on supporting others of their gender. Time and consistent effort will mitigate some of those changes, but given the obvious benefits to companies that support women in the entrepreneurial sphere, all companies should be supporting the move towards more diverse perspectives and inclusive attitudes at every level of the business world.