Around the world, women’s entrepreneurship is growing, but women continue to face significant barriers to starting and growing businesses. According to the World Bank, women own only 20% of businesses worldwide and receive less than 1% of venture capital funding. In the developing world, between 8 and 10 million small and medium-sized enterprises have at least one female owner, according to the Female Entrepreneurship Resource Point. The pandemic did not help women-owned businesses either, as women’s companies were more likely to close due to their high engagement in service sectors, which were affected by the closure of businesses around the world.
There are many reasons for this gender gap in entrepreneurship. Women often face discrimination in accessing finance, and lack of training, and mentorship opportunities. They are also limited by cultural norms discouraging women from taking risks or starting their businesses.
However, there is growing recognition that investing in women’s businesses is a win-win for the economy and society. Women-owned businesses are likely to create jobs, pay taxes, and reinvest in their communities. They are also more likely to be sustainable and profitable. Investing in women-owned businesses can generate higher returns for society because women invest more of their income in their families. There are economic and social benefits to supporting women entrepreneurs, including helping to meet Sustainable Development Goals (SDGs) 5 & 8, Gender Equality, and Economic Growth, respectively.
This blog post will explore seven ways to invest in women-owned businesses.
1. Provide Access to Finance and Credit
Women face a $1.7 trillion financing gap. A critical area of any business is access to finance and credit; for women business owners, this access is frequently constrained. Women entrepreneurs receive less funding and investment compared to their male counterparts. Financial institutions and investors can highly influence the leveling of the playing field between female and male-owned businesses in terms of accessing financing needed to grow. It is important for venture capitalists and lending institutions to develop gender-specific financial products and services by offering alternative solutions like cash flow financing or removing some collateral requirements.
The gender prejudices that have long prevented women from obtaining necessary financial resources should be aggressively addressed by organizations as they actively endeavor to provide equitable lending opportunities. Targeted financial assistance to women-owned enterprises can foster innovation and spur economic expansion. Institutions can empower women’s enterprises to scale by providing access to finance, lending, and funding.
2. Provide Training and Mentorship Programs
The foundations of entrepreneurship must include mentoring and education. Like their male counterparts, female entrepreneurs can gain much from training and mentorship programs designed specifically for them. Training and mentorship programs can boost female entrepreneurs’ confidence and business management capabilities. Training programs should get funding from governmental bodies, businesses, and nonprofit groups to assist women in acquiring the information and abilities required to excel in the business. Strong training and mentorship programs would enable women-owned businesses to manage entrepreneurship challenges successfully.
KilSah Consulting offers specific training and mentorship programs targeting women-owned businesses, which address obstacles they face and how they can overcome them and build thriving companies.
3. Reform the Legal and Regulatory Landscape
Legal and regulatory obstacles frequently facing female business owners make it difficult to launch and expand their enterprises. According to the World Bank, over 90% of economies worldwide possess legal structures that discriminate against women. These structures include laws that limit women’s ability to establish, manage, and grow a business.
Governments and civil service organizations play a big part in removing these obstacles. Reforms to eliminate discriminatory laws and put laws that favor gender equality in business are crucial. To improve the regulatory landscape, local, national, and regional governments should provide more accessible and equitable processes for women entrepreneurs that limit gender bias.
Women’s World Banking (WWB) is a global non-profit organization that provides financial services and training to women entrepreneurs in developing countries. WWB’s legal and policy work focuses on advocating for reforms that make it easier for women to access finance and providing technical assistance to governments and businesses to implement these reforms in the business environment.
Regionally, 83% of economies in sub-Saharan Africa, 72% of economies in East Asia and the Pacific, and 65% of economies in Latin America and the Caribbean do not protect women from gender-based discrimination in access to credit. Implementing women-friendly laws can remove the structural barriers that have kept women-owned businesses back.
4. Promote Positive Role Models
Women are underrepresented in leadership positions. According to Women CEOs, 8.8% of Fortune 500 CEOs are women; although an increase, there’s much work to be done to get parity. For aspiring and current women entrepreneurs, role models are essential. Role models can inspire future generations and show them that being a successful entrepreneur is possible. Women who run their businesses need to see other women who have overcome obstacles and succeeded in their fields.
To inspire and motivate the upcoming generation of female leaders and entrepreneurs, highlighting the stories of successful women entrepreneurs in the media, academic programs, and business events is pivotal. These entrepreneurs serve as role models for women, proving that gender is not a barrier to entrepreneurship success and encouraging them to set lofty goals and make wise business decisions.
5. Invite them to Supportive Networks and Communities
Entrepreneurship can be a difficult and sometimes lonely journey, but supportive networks and communities can make it better. Supportive women’s groups and networks can help strengthen women-owned businesses by giving them a group of other women to talk to and access opportunities. These support networks, which provide guidance, resources, and moral support to female entrepreneurs, are beneficial. Female entrepreneurs can even start a small group of other business owners or join networks sponsored by governments or regional bodies, commercial enterprises, and nonprofit organizations. Supportive networks enable women to successfully traverse the entrepreneurial landscape by developing a sense of community and giving access to valuable tools.
A great women’s network group is Ellevate Network. They provide women with access to mentors, training, and networking opportunities. Another excellent support network group is Women Who Startups. They provide women with access to resources, events, and support that help them grow their businesses. Strong networks like these provide valuable support and resources, open doors to new opportunities, and can drive female entrepreneurial success.
6. Buy from Women-Owned Businesses
Nothing beats buying from women-owned businesses. Purchasing from women entrepreneurs is one of the surest and obvious ways to support them. In addition to buying from them, write positive reviews and recommend their businesses to your family and friends.
This straightforward but powerful action can promote the expansion of women-owned businesses, inspire more women to launch their businesses and advance the nation’s economy.
7. Speak Up Against Gender Discrimination
In many regions of the world, gender discrimination is still a significant problem. One in three female entrepreneurs still face gender bias. It could take up to 132 years to bridge the gender gap. Women face assumptions and stereotypes that can affect their access to finance.
Research has shown that female entrepreneurs face a higher level of bias compared to their male counterparts, especially in male-dominated industries. For the most part, it costs nothing to speak up against gender biases that are affecting women entrepreneurs, especially if you are in a position of authority. It is everyone’s responsibility as informed and accountable citizens to speak out against gender bias whenever we see or hear it. Everyone can help create a fairer environment for female entrepreneurs by standing up against prejudice so that women-owned businesses are valued for their skills and innovative ideas rather than their gender.
Conclusion
Supporting women-owned enterprises benefits society’s advancement both economically and socially. According to Boston Consulting Group, the world economy would grow up to $5 trillion if women and men participated equally as entrepreneurs. Women-led businesses have repeatedly demonstrated that they can create jobs, pay back loans, pay taxes, and reinvest in their local communities. Additionally, they have a higher chance of long-term sustainability and profitability.
We must all work together to remove the obstacles that women entrepreneurs confront if we are to realize their potential fully. Equal access to financial resources, specialized training and mentorship programs, the revision of discriminatory laws and regulations, the promotion of positive role models, and the development of caring networks and communities are all part of this.
People can also make a difference by promoting women-owned businesses, giving their time and talents, and speaking out against gender inequality. The list here is not exhaustive, and other ways exist to support women entrepreneurs. You can do your part by adding to this list and coming up with your way to support women-owned businesses. Any support counts towards creating a level playing field for women-owned businesses.
By following these actions, we can unleash the unrealized potential of female entrepreneurs and promote social and economic progress for all. It’s time to acknowledge and appreciate the essential contributions made by women in business and open the door to a future that is both inclusive and lucrative, as women-owned businesses positively impact the local economy and can create jobs.
Written By: Staff Writer
