Women in Entrepreneurship (Blog Post)
| Women in Entrepreneurship (Blog Post) | |
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Abstract
A blog post concerning the common problems women entrepreneurs may face and possible solutions.
Blog Post
In the United States, women-owned businesses account for about one-third of all types of businesses. However, many of these women-owned businesses are nonemployeer firms which have no paid employees. Among employer firms, women-owned businesses are only about 16 percent of the total, and their share of revenues and employees are in the single digits. Moreover, among high-growth firms, women usually account for less than 10 percent of founders in any given sample. [1] Although there is a substantial growth of women's participation into the labor force and women now earn majority of bachelor and master's degrees in the US, women still face many problems when they want to start businesses today.
Lack of Access to capital is the top problem that affects women-owned businesses. According to the report from National Women’s Business Council (NWBC)[2], on average, men start their businesses with nearly twice as much capital as women ($135,000 vs. $75,000). This disparity is slightly larger among firms with high-growth potential ($320,000 vs. $150,000), and much larger in the Top 25 firms ($1.3 million vs. $210,000).One of the primary keys to solving the problem is to get more women investing, and that can come from more women. Felena Hanson, founder of Hera Fund, a female angel investor group, said that groups like hers are "looking to not only inspire and encourage female investors, but to grow and support other female entrepreneurs through both funding and strategic educational workshops." [3] In addition, women entrepreneurs can look for other money sources such as grant for women. The Small Business Administration (SBA) provides considerable information about grants for women. Other grants for women can be found through state and local government programs. Many of these require recipients to match funds or combine the grant with other types of financing such as loans.[4]
The other crucial problem is the difficulty in expanding the business and sustaining the growth. Women need mentorship and entrepreneurial education to show them how to think and grow their businesses. Merely teaching and business skills and financial knowledge is not enough. Women entrepreneurs need more intense mentoring and educating programs. For example, Godman Sachs 10,000 Women initiative provides women entrepreneurs around the world with business management education, mentoring and networking, and access to capital. According to their progress report, by 18th months after graduation participants increases revenues by an average of 480%, and nine out of ten graduates have paid it forward by mentoring other women entrepreneurs. [5]
Other than practical solutions, government also recognized the importance of expanding the role that women-owned businesses play in the national economy and several policies are in place to support women entrepreneurship. The Small Business Jobs Act of 2010 increases the availability for credit and fund for small businesses. It enhances loan provisions and increases loan limits, and a significant share of loans goes to women-owned businesses.[6] Moreover, SBA implemented the Women’s Equity in Contracting Act to address the lack of opportunities for women-owned businesses and seek to help women obtain more federal government contracts.[7].
We should view women entrepreneurship as an economic issue instead of a gender equality issue. The growth in women-owned businesses, which create more jobs and income, will eventually benefit everyone. Encouraging women to enter into the field of high-growth entrepreneurship would be the United States’ economic driver.
