Year over year, women-owned businesses are exponentially growing in both numbers and scale. Real progress is being made but women still lag behind men in many significant areas, like access to capital, C-suite leadership positions and career advancement opportunities. Gender bias is still alive and well, but today’s women entrepreneurs are figuring out how to leap over the barriers placed before them to achieve what they know they are capable of.
Some interesting statistics on women-owned businesses from fundera:
- The US has 12.3 million women-owned businesses.
- These businesses generate $1.8 trillion a year.
- 40% of US businesses are women-owned.
- Women started 1,821 net new businesses every day in 2022.
- 64% of new women-owned businesses were started by women of color last year.
- Latina women-owned businesses grew more than 87%.
- There are 114% more women entrepreneurs than there were 20 years ago.
- 62% of women entrepreneurs cite their business as their primary source of income.
Although more women are starting their own businesses, many roadblocks still remain
1. Access to capital
One of the biggest challenges women-owned businesses face is access to capital. More venture capitalists, angel investors and plain old banks need to invest in women-owned companies. When women can’t secure the funding they need, it makes it really hard to get their businesses off the ground, especially if they’re just starting out with limited financial resources and little or no track record of success.
Here’s a difficult fact: Given that women have a hard time getting financing from typical male-controlled funding sources, you would think they would find a willing audience in women-run capital firms, right? Wrong. A March 2022 study of more than 2,000 venture-backed firms by Kaisa Snellman and Isabelle Solal found that “firms with female founders who received funding from female rather than male VCs are two times less likely to raise additional financing.” The study also reports that “pitches by female-backed female entrepreneurs receive lower evaluations compared to all other pitches…undermining the long-term success of female entrepreneurs.” This is not great news.
2. Gender discrimination
Even though it is illegal to discriminate against women in the workplace, many women-owned businesses face bias from potential customers, vendors and partners, making entrepreneurial success harder to obtain. One particular challenge is getting into the supply chains controlled by others. A promising sign is that more companies are recognizing the importance of promoting diversity, equity and inclusion (DEI) in their supply chains and have established Supplier Diversity programs or have set goals to work with diverse suppliers. Some large corporations have even made public commitments to allocate a certain percentage of their procurement spending toward diverse suppliers.
Here are a few examples of companies that are doing that:
- IBM is committed to creating diverse and inclusive supply chains and has set a goal to spend $20 billion with diverse suppliers by 2025.
- Microsoft has set a goal to double its number of Black-owned U.S. suppliers and has launched a Supplier Diversity Academy to help diverse suppliers build capacity and capability.
- Coca-Cola has a Supplier Diversity program that seeks to increase the number of diverse suppliers it works with and offers training and resources to help these suppliers grow their businesses.
- Johnson & Johnson‘s Supplier Diversity program seeks to build relationships with diverse suppliers and help them become more competitive in the marketplace.
- Walmart has initiated a Supplier Diversity program and is committed to diversifying its roster of suppliers and helping boost their businesses.
3. Balancing work and life
Women business leaders often have a hard time finding the right balance between work and family responsibilities in ways that men typically do not. They must juggle running their businesses with caring for children or elderly family members, which can be a significant source of stress and burnout.
Because companies now recognize that to attract and keep female (and male) employees in this post-pandemic world, they must support their workers with childcare needs. Many have implemented various forms of assistance, including subsidies, flexible work arrangements and referrals to childcare resources. These companies are some that are doing a good job of assisting with childcare:
- Patagonia offers on-site childcare for employees at its Ventura, CA headquarters and financial assistance for childcare expenses.
- Microsoft offers a range of childcare support options, including on-site childcare centers, backup care and a Dependent Care Spending Account that allows employees to use pre-tax dollars to pay for eligible childcare expenses.
- Google provides on-site childcare centers and a Childcare Financial Assistance program that reimburses employees for a portion of their childcare expenses.
- Deloitte offers a variety of flexible work arrangements, including reduced schedules, telecommuting and job sharing to help employees balance their work and family responsibilities.
- Cisco backup care services and access to a network of licensed and accredited childcare providers across the United States through its Bright Horizons program.
4. Lack of visibility
Even though women-owned businesses are often as successful (or even more so) as those run by men, they typically lack visibility and support from the wider business community. As the saying goes, If nothing changes, nothing changes. So things have got to change!
A sampling of women startup success stories
Let’s celebrate the incredible achievements of these women and applaud their skills and smarts:
- Kylie Jenner: At 19, she launched Kylie Cosmetics, a makeup line that quickly became a monster success. In 2019, Forbes named her the youngest self-made billionaire ever.
- Whitney Wolfe Herd: She founded the wildly popular dating app Bumble when she was 24, and has become a leading voice for women in the tech industry.
- Danielle Weisberg and Carly Zakin: This duo founded The Skimm, a daily newsletter summarizing the news, when they were both 25. Their company has grown to over 7 million subscribers and expanded into other areas, including podcasts and books.
- Leila Janah: At 25, she founded Samasource, a nonprofit that connects people in impoverished countries with digital work opportunities. The organization has since helped over 50,000 people rise out of poverty. (Sadly, Leila passed away in 2020 at the age of 37.)
Note that these women’s ideas were not simply duplicating something already on the market. They were very much Blue Ocean thinkers, searching for ways to create solutions to unmet needs.
What’s next for women in business?
Despite these many challenges, women-owned businesses are succeeding. Remember that 40% of all US businesses (12.3 million) are owned by women. Women-owned businesses employ over 9.4 million workers. Women are three percentage points more likely to start a business than men. By supporting and empowering women entrepreneurs, we are creating a more equal and just business landscape for everyone.
At SAMC we are committed to helping women entrepreneurs succeed. Want to talk?
At Simon Associates Management Consultants, we work with businesses across industries to help support and promote their female talent, improve their diversity and pay parity, and coach and mentor women to become the best they can be. By so doing, we help recraft the narrative about what women can accomplish in our society. If you are a business owner or manager, male or female, we urge you to take advantage of our leadership academies and individual coaching to help you recruit, retain, develop and empower women as effective members of your team, as leaders, and as innovators. We invite you to contact us and let’s start a conversation.
From Observation to Innovation,
Andi Simon, Ph.D.
CEO | Corporate Anthropologist | Author
Andisimon.com
Simonassociates.net
Info@simonassociates.net
@simonandi
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