Female entrepreneurs in the US have been making great strides over the past five decades. The wealth and power that they have earned thus far is only proving that they will continue to grow. Women-owned businesses, on average, have increased by 506 firms each day from 2007 to 2014 and fully by 1,288 firms per day over the last year. According to a 2014 study by American Express Open, there are nearly 9.4 million women-owned businesses, making up about 30 percent of all privately-owned companies in the US.
These companies are generating more than $1.5 trillion in revenue and employing more than 7.8 million Americans. However, only 2 percent break $1 million in revenue, while businesses run by men are 3.5 times more likely to break $1 million in revenue.
Challenges women face when starting businesses
A 2014 survey by the National Association of Women Business Owners and Web.com showed that 61 percent of women business owners said access to capital was one of their most significant business challenges.
Source: 2014 State of Women-Owned Businesses Report by Web.com and NAWBO
In many instances, start-up businesses are initially funded with personal cash. On average, women make 23 percent less than men in terms of annual salaries, which gives them less capital to get a big business up and running. In other words, women start with less money. And while the number of female angel investors amount to about 20 percent, the reality is that there are way more male investors than women.
Of course, there may be some biases in the workforce. It’s not necessarily that male investors purposefully exclude women; they just want to make money and some may might not think investing in a female-owned business is the best way to go about it. In some circles, the thought is that women have to be better than their male counterparts in order to get venture backing. However, the irony of it all is that venture-backed women-owned companies generally bring in 12 percent more revenue than male-owned companies. Still, only 3 percent of venture capital actually went to companies with a female CEO between 2011 and 2013.
If you take a look at the Fortune 1000 CEOs, you’ll see that only 5 percent are women. However, Sara Davidson, founder and CEO of Hello Fearless – a school for female entrepreneurs – said, “There’s a paradigm shift happening in entrepreneurship right now that’s all about business and life integration.”
How women can ensure success as business owners
Having the courage to grow is important when running a successful business. A business is an investment and sacrifices will certainly have to be made at some point. However, in times where the work seems to be overflowing, it may be beneficial to add to the team. Businesswomen who understand the need for help can alleviate the stresses of running a business. Successful women will hire a team who will complement their strengths and then work together to build a company that’s bigger than themselves.
Of course, it’s more than delegating tasks. Running a business requires being a leader. There is so much power behind being a public spokesperson for a company. Many of the most influential women are the ones who put themselves out there as thought leaders, bloggers and speakers. Female entrepreneurs know their company and the industry inside and out. Being a public leader open doors to building relationships and becoming someone of value within the industry.
Most business won’t reach a level of success without some sort of collaboration. Working with other businesswomen is essential to building key relationships, reducing learning curves and, most importantly, reaping collective benefits. Erica Nicole, founder and CEO of YFS Magazine – a publication that connects and empowers startups and entrepreneurs – said, “When women work together, we are a pivotal force in the start-up ecosystem.”