12 Things Women Entrepreneurs Need to Know
By Rieva Lesonsky
1—The Global Gender Pay Gap
We’ve all heard the stats: It will take approximately 170 years to wipe out the disparity in pay and employment opportunities for men and women.
But, which countries are scoring the best for equality? Aria, a digital marketing agency, worked with Ecard Shack to create The Global Gender Equality Gap which compares the attitude towards equality by country across the world.
Iceland is leading the way when it comes to eliminating gender inequality.
The top countries:
- Score: 0.874
- Score: 0.845
- Score: 0.842
- Score: 0.8
The bottom countries:
- Score: 0.516
- Score: 0.556
- Score: 0.567
- Saudi Arabia. Score: 0.583
- Score: 0.587
The U.S. ranks 45th out of the 144 countries ranked against the criteria, which includes wage equality, number of women in parliament and life expectancy.
Check out the infographic below for more details.
2—Do Women Make Better Entrepreneurs?
Marsha Kelly, a serial entrepreneur who sold her first business for more than a million dollars, thinks so. Catch up with Marsha on her small business blog. And check out her infographic below.
3—Best Cities for Women to Start a Business
If you want to start a business, you might want to consider Baltimore, or so says the latest survey from ShareFile. The ShareFile Businesswomen Power City Index ranked cities based on their suitability for women entrepreneurs, looking at the percentage of women-owned businesses, the number of executive roles held by women, the cost of living in each area and the wage gap between men and women by location.
Baltimore had the highest combination of all factors, with the highest women’s buying power score and the 10th highest percentage of women-owned businesses (23.3%). Baltimore was also in the top ten for number of women executives (31.3%) and ranked 26th for earnings when compared to men, with a wage gap of 18.2%.
The top 10 best cities for women to start a business are:
- Baltimore, MD
- Tampa, FL
- Washington, D.C.
- Las Vegas, NV
- Orlando, FL
- Sacramento, CA
- Minneapolis, MN
- Hartford, CT
- Miami, FL
- Providence, RI
To learn so much more, check out ShareFile’s blog.
4—Outlook of Women Small Business Owners
The American Express OPEN Small Business Monitor, which has been conducted since 2002, took a look at women-owned businesses.
Here are some of the highlights:
- More women entrepreneurs are using social media (70%, up from 59% last year)
- Women are more positive about the economy and their business prospects over the next six months (69%, up from 64%)
- They are less likely to say they are on track to save the funds they need for retirement (56%) when compared to their male counterparts (62%)
- However, they are less worried about their ability to save for the retirement they want than they were a year ago (45%, down from 52% in 2016)
- On average, they believe they will need $1,090,000 to retire, $50,000 more than they estimated last year
- They are more likely to pay themselves an annual salary compared to last year (50%, up from 42%), but less likely when compared to their male counterparts (58%). However, on average women are earning more than they were a year ago $65,290, a $1,700 increase
- 44% (up from 35% last year) plan to hire within the next six months (vs. men and overall, 45% each)
- 41% say their businesses are “staying-afloat” and that the economy has brought challenges, but their businesses are surviving
- Their most important priority is growing their businesses (34%). However, fewer plan to grow their businesses over the next six months (71% vs. 76% in 2016)
- Their biggest growth challenge? Finding the right staff (26%)
- Over the last three years, they experienced 11% revenue growth, the same as men and business owners overall
Cash Flow Issues
Women business owners are just as likely to expect cash flow issues over the next six months, (33%) compared to men and on par from last year (each, 34%). Their biggest worry is the ability to pay bills on time (9%), followed by the ability to accurately track cash flow (8%), accounts receivable (7%), having enough cash to win new business (5%), and the ability to meet payroll (4%). The primary way they will address cash flow challenges that arise is to use personal/private funds (30%).
Investments & Access to Capital
- 80% are confident they can access the money they need to build their businesses
- 49% will make capital investments over the next six months (vs. 62% of men)
- 36% will invest in technology
- 20% will invest in office equipment
- 13% will invest in real estate investments
- 10% will invest in manufacturing/production equipment
- 8% will invest in office furnishings
70% of women (up from 59% last year) use social media for their businesses
- Instagram & YouTube—8% each
- Foursquare & daily deal sites—2%
Truthfully, I’m a little surprised at the platforms the women are using. First rule of social media—go where your customers are.
Why are they using social media?
- Attract new customers—52%
- Create a dialog with customers—25%
- Drive sales—23%
- Gain insights from customers—18%
- Create communities where customers can talk to each other—14%
5—3 Obstacles Faced by Women Small Business Owners & How to Overcome Them
Guest post by Yumi Clark, VP of New Product Development, Capital One Spark Business
- Negative stereotypes impacting perception:From being less business-savvy to not being as strong of leaders, negative stereotypes and biases about women persist to this day. As outdated as they are, these stereotypes impact women’s ability to secure funding and loans, network, hire, and more. Consider for example a recent Harvard Business School study that found 32% of women received funding interest versus 68% of men when pitching the exact same script. Even more worrisome, Fundera found women entrepreneurs get offered smaller loans and pay significantly higher interest rates than their male counterparts.
- Industry bias:Aside from the biases women face about their own abilities, there is often biases associated with the type of business they’re starting or the industry they’re targeting. For example, women starting businesses in traditionally “feminine fields” (e.g. beauty, fashion, wellness, etc.) often face skepticism from male investors, lenders and business advisers about the viability of their business and the market need it addresses. Additionally, women looking to crack into traditionally male-dominated industries—a car mechanic for example—may face hurdles as potential customers, employees or investors may doubt their qualifications based solely on gender norms.
- Starting with a smaller nest egg:The highly-documented gender wage gap has an effect on the amount women save over time, compared to their male counterparts. Simply put, making 76 cents for every dollar that male colleagues earn in the same jobs means female entrepreneurs likely have less money to launch their own business, or have to wait a bit longer to make the leap.
How to overcome them
- Start with microloans:As much as we’d like to make negative stereotypes disappear overnight, it’s going to take time. One of the best ways for female business owners to prove their reliability, business savviness, and leadership is to establish a good financial history. Start with a microloan from an organization like Kiva or Grameen America that specializes in providing female entrepreneurs access to capital. Microloans can help you build financial history that demonstrates you’re worthy of bigger loans in the future.
- Develop your network and find a mentor:Connect with women you admire—those who are like-minded and have “already made it.” Ask her how she got there, and her advice so that you can do the same. You’ll learn a lot from what a mentor tells you to do, but also what she tells you to avoid. By learning from others’ mistakes, you’re setting yourself up to skip some of the valleys that come along with entrepreneurship.
- Befriend your banker:Aside from building a network of other business owners, befriend a business banker. This person will prove to be an invaluable resource that can provide knowledgeable financial advice when you need it. Bankers are also emotionally neutral and can give objective advice or guidance that those close to an entrepreneur may not be able to provide. Additionally, establishing a strong relationship with a banker early on can be the key to helping entrepreneurs get the financing they need down the road when looking to expand and scale.
6—Women & VC Funding
Sadly, a mere 8% of U.S.-based startups who closed a round of venture capital funding last year have at least one female founder and a female CEO. However, among the female-founded, VC-funded startups, 51% have a woman at the helm. These findings are from a recent study from online graphic design marketplace 99designs analyzing Crunchbase and 99designs data.
99designs took a deeper look at the VC funding gap unveiled in previous entrepreneur surveys this year showing female founders tend to raise significantly less outside capital than their male counterparts. Using Crunchbase data, 99designs looked at startups that raised a Seed, Series A or Series B round in 2016 to identify who among the female-founded and female-led companies had secured the most funding, which industries were getting funded and which geographic regions were spinning out the most VC-backed, female-founded, female-led businesses.
“Women own about one-third of the businesses in the U.S., but these women-founded companies account for only about 16% of companies that received venture funding in 2016,” says 99designs Chief Marketing Officer Pamela Webber.
More than half of the female-founded and VC-backed startups currently have a woman at the helm. While only 16% of all the companies who closed a seed, A or B round of funding in 2016 had at least one female founder, 51% of the 246 funded startups who did have a female founder also have a woman CEO.
San Francisco Bay Area/Silicon Valley leads the country in female-funded entrepreneurs.
San Francisco Bay—38%
New York City—22%
Los Angeles/Orange County—7%
Chicago & Boston rounded out the top 5 areas
Healthcare and Commerce/Shopping are top industries for female-founded and funded startups. Healthcare, Commerce/Shopping, Software, Biotech and Data/Analytics are the top five industries represented by female-founded and led companies. Three of the 10 highest funded, women-led and founded startups who closed a round last year were Biotech businesses.
Dark blue, “combination mark” logos most common among top-funded female startups. 99designs’ branding experts also analyzed the logos of the top 50 funded, female-founded and female-led companies to note common themes. The majority (68%) of companies used a “combination mark” logo, which is when a pictorial, abstract or a symbolic element is used alongside the typographical element. When it comes to color, dark blue emerged as a predominant trend (34%), most often paired with white or orange. Within specific industries, grey ruled among consumer brands, pink within marketing and collaboration tools and black among luxury brands.
7—You Are a Powerhouse—Now Put It to Good Use
Guest post by Samantha DeBianachi, founder, DeBianchi Real Estate, and the first woman to star on Bravo’s Million Dollar Listing Miami. She is committed to the success of small businesses and female entrepreneurship.
What do you do once you have broken the glass ceiling? Women everywhere are achieving far beyond what was thought possible not too long ago. For women, there is some work yet to be done, but in the business arena women are making names for themselves as serious power-players.
Once you achieve your first bout of success, you can better help others do the same. As a woman in the industry myself, I know how hard it is to defy the odds and surge beyond expectations.
Here are some things I learned along the way that can help you achieve your goals of success:
Help connect friends and other professionals: In business, once you have been around the block a few times, you notice patterns. Know who can benefit from your network, and if applicable connect them yourself. Once you are not needing to jump through so many hoops, you are able to help other people jump through theirs. Watching your friends succeed is wonderful, and helping them get there is a true gift.
Attend marketing events and share your knowledge: Continue making connections in the industry. The networking aspect is one thing that is endlessly helpful. Serendipitously many influences occur, and that next random event might be the big ticket. Always keep your mind open to new possibilities. In business, fluidity is pivotal in progressing your professional persona.
Continue to let it grow: Whatever business venture you went on that landed you in the lap of success is probably not over, unless you sold. You will need to nurture your business for it to continue growing. If you would like to continue to generate more income, use your successful business to plant seeds for other projects. The connections you develop are endless, and only lead to more opportunities. A lot of times, the more you cultivate your business skills the more success you can achieve in your next project.
Keep the momentum up: There is a confidence boost once you achieve the goals you set forth. Seeing the constant expansion and growth taking place in business is a reason to continue aspiring for more. Momentum creates motivation which in turn creates opportunity. One of these opportunities might be your big break in the industry.
Hang around people that are successful: Their energy is contagious and will be a great influence for you and others. Feed from their inspiration and you do the same for those around you. Collectively, the energy can be a breeding ground for great ideas.
Be open and adapt to change: Get committed to a new idea or reevaluate a previous idea and recommit. Refinement is necessary in business to make sure you are in tune with the best circumstances. Refine goals you have set for your business within an entrepreneurial perspective. Everything is constantly morphing into something else and the evolution will not end, so take advantage.
The only way to succeed in business is to hang on for the ride and not get too attached to specific ideas or concepts. Ride it out and figure out the best strategies for the specific situation. Being adaptable is one of the best qualities in a person, business or otherwise.
Give back: Giving back can take on various definitions. This can be through volunteering to help kids develop business skills in the community, or with reaching out to those in your network to assist them in their business ventures. Your skillset, after you achieve initial success, expands to include even more practical knowledge.
You can give back by getting involved in the entrepreneurial community. Book speaking gigs and get your information out there. If you developed methods that worked well for you, there is no reason to not share them with others. After all, we’re living the collaboration age. Writing a book is another sure-fire way to share your tips to success and simultaneously expand your brand.
Overall, success is not a finite concept and can truly be enjoyed when it is spread among many with a good purpose. Making the money is tough, but so worth it in the end. In retrospect, it is easier to identify the methods that worked. From those successful strategies, lend techniques to those in need of assistance.
8—Government Contracting Free Webinar
There is a lot of opportunity for women-owned small businesses to get involved with government contracting. The government has a goal to award at least 5% of all federal contracts to women-owned small businesses (WOSBs). Although this goal was met for the first time in FY15, the government fell slightly short in FY16, awarding just 4.79% to WOSBs.
To help WOSBs gain a competitive edge, Give Me 5 is hosting a free webinar, Give Me 5: Follow the Money on October 25, which will provide specific information on how you can build a government strategy—including a checklist for success. The webinar will also cover best practices for using public information to find out what goods and services government agencies buy and how to market to them. The webinar will be led by Ann Sullivan, President, Madison Services Group, Inc. & Chief Advocate, WIPP Government Relations.
You can register here.
9—How Women in Leadership Roles Can Change the Workplace
Guest post by Andi Simon, Ph.D., author of On the Brink: A Fresh Lens to Take Your Business to New Heights, corporate anthropologist, and founder and CEO of Simon Associates Management Consultants.
As women have taken on greater leadership roles in the business world, it’s paid off for both them and business. A study by the Peterson Institute for International Economics found that firms with women in the C-suite were more profitable. Meanwhile, the number of women-owned businesses grew 45% from 2007 to 2016 compared to just a 9% growth in the number of businesses overall.
But will all those women in leadership roles change the workplace culture to make it more female friendly – and does it matter? As a corporate anthropologist, I’m aware of the recent shift in thinking surrounding how cultures should be restructured in order for women to thrive in the workplace. This has caused me to ask: What type of culture do women really want and is it that different from what men want, too?
The results of my research were surprising. In many ways men and women want similar things in the workplace. Both prefer a strong clan culture that emphasizes collaboration, teamwork and a focus on people.
So, what lessons does that hold for women who start their own businesses or are hired or promoted into leadership positions in existing businesses?
Here are some ways women can succeed when leading an organization and make the workplace more attentive to the needs of both men and women:
Create a culture that blends work and home. [One founder I talked to intentionally took a whole-life approach and didn’t force employees to choose between work and family. That company won all sorts of local awards for being one of the best places to work in the area.
Encourage staff to be innovators. Often even the employees who think outside the box are reluctant to act outside the box for fear of repercussions if things don’t work out quite the way they hoped. But for innovation to happen, a good leader needs to empower employees to try new ideas.
Be an adventurer, stay curious. If you expect your employees to try new ideas, you need to be willing to do so as well. Don’t worry about failing. Keep tinkering and trying stuff and sooner or later you’ll hit upon your a-ha moment.
In my research, I found the women who know how to create success are not just building better businesses; they are changing the way people work. The corporate cultures in women-run businesses reflect the personal beliefs and values of the women leading them. And those businesses tend to be highly successful.
10—New Community Platform for Women
The Ewing Marion Kauffman Foundation gave Astia an Inclusion Challenge grant to underwrite the expansion of the Astia Expert Sift™ methodology developed by Astia to source, screen, advise, and select the best-in-class women-led companies for investment. Developed over a decade, the Astia Expert Sift™ has proven to be a gender-neutral method for sourcing and selecting best-in-class innovative companies; the method has demonstrated results commensurate with top-tier venture firms while maintaining a commitment to considering only investments with women in positions of equity and influence.
“The Kauffman Foundation has been a funding partner since 2003 and its support and research has helped to shape Astia’s programs that directly address the intractable problems of bias in the innovation economy,” says Sharon Vosmek, Astia CEO. “Together we continue to put a spotlight on the persistent gap in funding for women and minorities and together we intend to level the playing field for these underrepresented groups.”
The funding will in part support the roll-out of Astia Community, a new platform built on Salesforce Community Cloud that will allow for a direct and more robust engagement of the more than 5,000 Astia community members around the globe and the entrepreneurs who apply to Astia. The new platform will give its companies real-time access to expertise, networks, and capital.
11—Do You Own a Trustworthy Business?
When it comes to shopping local, what defines a trustworthy small business and what turns us off? Paychex conducted a survey to understand what factors build trust with customers and what keeps them coming back to support local businesses.
Here are some of the findings:
Women business owners are considered more trustworthy than men by every demographic—including men.
Millennials were more likely to support business owners their own age than those who were older and were more inclined to frequent women-owned businesses.
You can see full study here: Microbusinesses and Trust.
12—In Case You Missed It
Here are some links to articles I’ve written recently about women entrepreneurs
8 best small business grants for women