What It Will Take For Women Entrepreneurs To Take Over The World
In the U.S., approximately 40 percent of small business owners are women. And they're optimistic about the future. Sixty-six percent of respondents in a recent CNBC/SurveyMonkey Small Business Survey believe that women will own more small businesses than men in the next 20 years. What can we do to get there? It may start with closing the confidence gap.
Says Margaret Donnell, chief marketing officer of Capital One's Small Business Bank, "We have pretty clear evidence around us. We've seen studies out in media, I certainly have, that document a wage gap between men and women. It means that women don't always have as much money as men because of that earning power. It also means that their confidence could have been eroded over time, and so I think there's a lot we can do to lift each other up, and men as allies can lift women up, to help them feel confident and go after getting into business."
A lack of confidence can play a crucial part in risk aversion, ultimately hindering our ability to not just strike out on our own and launch a new venture, but also do what it takes to grow.
According to Capital One's Small Business Growth Index, 63 percent of female business owners report that current business conditions are "good or excellent," up from 58 percent last year, whereas men jumped from 46 percent to the low sixties. But despite feeling more positive about their businesses than their male counterparts, female business owners are more hesitant to take big swings and heavily invest in their companies. According to the same Capital One report, 75 percent of men are likely to hire in the next year, compared to 63 percent of women.
So should we be swinging for the fences more? Donnell has a personal rule of thumb for major decision-making that forces her to reconsider risk-taking, and that is asking herself: "What would a male counterpart in my exact position do?"
"And it might be authentic to me, it might not," she says, "but it forces me to ask the question and flip the gender thing on its head."
"Now the really great news is that calculated risks are what fuel business," Donnell points out. "Women have a really strong skill for calculating and a little bit of hesitation on the risks, but you've got the ability to kind of do the calculated risk thing."
While women struggle with access to capital, a preference for taking calculated risks may also explain why 68 percent of women use personal savings to initially finance their businesses.
"Personally, I was not comfortable taking on debt and having that extra stress of proving myself to someone else," says business owner Patricia Paramo, founder of Parpala Jewelry. "So, I chose to start small, be patient, and really enjoy small growth that was 100% my own. At the very beginning, I utilized my own network and social media to promote my collection and it cost nothing. What it did require was a lot of my own time, effort, and strategy. I began investing money as the business itself allowed me to."
Of course, it isn't just financial resources that are required to get a business of the ground, but as technology continues to democratize entrepreneurship, that's good news for women.
"We live in a world where the entrepreneurial attitude is so incredibly different than what a generation ago was taught to start a business," says Jessie Willner, founder of The Mighty Company. "We have technology and it connects the most disconnected of people and achieves objectives that no one ever planned for. If you can be a teenager recording demos in your bedroom and have them streamed millions of times on Spotify, you can be a completely uneducated person in business and find an audience that will support your product. The key is just to figure out what the hell you're doing along the way so it's sustainable."
Technology and access to resources aren't the only things shifting--power is changing hands too. By the year 2020, women are expected to control two-thirds of the wealth in this country.
"It means the power is shifting, in all the right directions, and in a pretty exciting way," says Donnell. "I think it is on us, the women leaders in the world right now, and on male counterparts, to really inspire, educate, and lift up women through organizations so that we are in a world where having women on executive committees of companies and the CEOs of Fortune 500 companies is absolutely the norm and not something interesting or noteworthy to write about."
"Things are slowly but surely changing, and I think as women are becoming supported in all industries, this percentage will continue to increase," adds entrepreneur and Wingman app CEO Tina Wilson. "Change doesn't happen overnight, but I do believe women are out there making moves and that equality is becoming a normality."