Over the last few years, women have been shown to be a driving force in business. According to an article from Entrepreneur.com, there are over 9 million businesses owned by women operating in the U.S. alone, providing an estimated 5 million or more jobs.
Women are founding their own companies at a historic rate when compared with other small businesses; In fact, over the past 15 years, women-owned firms have grown half again faster than average, and the number of self-proclaimed women entrepreneurs has twice as fast as that of their male counterparts.
From finance and retail sales to science and social causes, start-ups by women reflect an increasingly broad range of talents, interests, and industries. Studies have also shown that women entrepreneurs out-perform men, arguably due to being considered more trustworthy within their respective communities.
This is not to imply that male entrepreneurs are less successful than in the past: there are obviously highly successful male and female entrepreneurs in a wide variety of industries around the globe. As successful as men are in entrepreneurial endeavors, however, women seem to surpass them.
Different Genders, Different Approaches
Men and women are different, of course, but research shows that in the realm of entrepreneurship, some characteristics are shared by both genders. Similarities may exist demographically and psychologically; they’re more likely to be married and—interestingly enough—are often the first-born child. Also, while there were most likely guided into entrepreneurship by a role model or mentor, both male and female entrepreneurs had previous business experience prior to going out on their own, often in the area of the business they founded.
Yet female entrepreneurs also show distinct differences from their male counterparts. For starters, female entrepreneurs are more likely to have earned a liberal arts degree as opposed to something in a more technical field, such as engineering. Where men show a tendency to focus on the financial/economic rationales for starting a business, women tend to balance those reasons with a desire to contribute to their community or even society at large. And while both genders are drawn to the autonomy and control of a self-started business, studies have found the most important reason women give for their entrepreneurship is the desire to feel self-fulfilled.
Different Genders, Different Problems
Despite all of this, women still seem to face more hurdles in going into business, and most of them revolve around money.
“The biggest challenge women face when starting and growing their businesses is access to capital, especially equity financing,” according to Geri Stengel, author of the book Forget the Glass Ceiling: Build Your Business Without One.
Statistically, the average female entrepreneur has less access to even basic banking services like checking accounts; many are forced to use their own savings, small short-term bank loans, loans from family members, or even crowdfunding to finance a fledgling business. Such piecemeal financing is usually more expensive and causes problems for women when it comes to decisions that affect their business long-term. On the other hand, this need to be creative and develop innovative solutions to problems has been shown to be one of the greatest strengths of the female entrepreneur.
Despite these slow-to-change inequalities, current trends indicate that women will have a profound influence on entrepreneurial growth for some time. Even with women in emerging economies starting to follow the lead of their contemporaries in the U.S. and other developed nations, the potential for female entrepreneurs still remains largely untapped. Hopefully, we can continue to cultivate a more stable and sustainable climate promoting economic prosperity by offering opportunity for female entrepreneurs around the world.