As signs point to the American economy finally shifting into gear after the Great Recession, and years of stagnant growth even after the recession technically ended, economists are acknowledging what women have known for years: the simple fact that women, and specifically women entrepreneurs, are an untapped force in the American economy. As things finally begin to move again, there are several trends that will help women build businesses, expand, and drive the economy forward.
The Economic Impact of Woman Entrepreneurs
Curious about why women entrepreneurs are a big deal? Brace yourself, because their impact on the economy is nothing less than monumental. A study from American Express revealed that in 2018 alone, businesses led by women pumped a jaw-dropping $1.8 trillion into the U.S. economy. But wait, there’s more to this than just dollar signs. These companies are also job-generating machines, creating roles at a pace 1.5 times faster than the national average. From game-changing tech ventures in Silicon Valley to eco-friendly farms in America’s heartland, women aren’t merely shattering old stereotypes; they’re laying the foundations for new paradigms.
Ready for a story that’ll make your eyes pop? Meet Stitch Fix, a fashion-forward enterprise spearheaded by Katrina Lake. Not only has she shaken up the traditional retail sector, but her brainchild also pulled in an impressive $1.6 billion in revenue in 2020. Plus, Stitch Fix has given jobs to a community of more than 8,000 people. Lake’s tale is far from an anomaly; it’s part of an overarching shift that’s reshaping our economic reality.
Consider this: a Boston Consulting Group study posits that if men and women shared the entrepreneurial stage equally, global GDP could leap between 3% to 6%. That’s a staggering surge of $2.5 to $5 trillion in the worldwide economy.
So the next time someone questions the importance of women entrepreneurs, you can confidently say it’s not just a footnote in a business book; it’s the banner headline in the economic narrative of our times.
Potential of Women Entrepreneurs in STEM Fields
Think you’ve heard everything about the impact of women entrepreneurs? Well, there’s an overlooked angle: their untapped capacity in STEM (Science, Technology, Engineering, and Mathematics) sectors. Despite progress in numerous fields, women are still conspicuously absent in STEM businesses. Why does this matter to you? Because it’s more than a gender issue—it’s an economic imperative.
Organizations such as the Anita Borg Institute and Girls Who Code are leading the charge to close this gap. They provide tailor-made resources, including mentorship and funding, to empower women in STEM. Similarly, the National Science Foundation’s ADVANCE program is a catalyst for change, targeting the growth and success of women in academic roles within science and engineering.
Unleashing Economic Power
Just picture the wave of innovation that could flood the market if women had equal footing in STEM entrepreneurship. A McKinsey report estimates that achieving workforce gender balance could boost global GDP by a staggering $28 trillion by 2025. Add to that the impact of women specifically in STEM sectors—think transformative tech, next-level healthcare, and sustainable environmental solutions. The ensuing economic boost would be revolutionary.
Funding and opportunity are just part of the equation; mindset plays a pivotal role too. “Imposter Syndrome” isn’t unique to the entrepreneurial landscape; it’s rife in STEM as well. Initiatives like Stanford University’s “Women in STEM” program are taking on this mental hurdle, offering specialized workshops designed to fortify self-assurance and quash self-doubt.
Challenges Faced by Woman Entrepreneurs
Wondering why there aren’t more women at the helm of businesses, given their remarkable impact? The explanation can be found in the maze of obstacles they face every day. Let’s get into the facts: A Fundera report highlights that just under a quarter—24.9%—of U.S. small business owners are women. The main culprit? Funding.
Despite their impressive successes, women secure a meager 2.3% of all venture capital funds. But the challenges extend beyond mere dollars and cents; societal expectations often act as unseen barricades. Whether it’s the pressure to fit into traditional roles or the nuanced biases that come into play in the corporate world, these social obstacles are as concrete as they are elusive.
And there’s another wrinkle in the fabric: “Imposter Syndrome,” a mental trap that causes people to question their achievements. This issue hits women entrepreneurs harder, according to an Access Commercial Finance study—66% of women face it, as opposed to 56% of their male counterparts. This self-doubt can effectively block the path to further success and innovation. Despite these roadblocks, however, women entrepreneurs are far from just getting by; they’re flourishing. They’re flipping societal expectations and turning funding gaps into innovation opportunities.
So the next time you come across a story of a triumphant female entrepreneur, keep in mind the Herculean efforts she put in to etch her name in the annals of success.
Huge Amounts Of Cash Available to Women Entrepreneurs
Historically, women who start their own businesses struggle to pull together enough cash to get their businesses off the ground. Research from the National Women’s Business Council has indicated that women open their businesses with 50% less capital than men. And yet Carla Harris, chair of the NWBC, has said that “today provides a perfect opportunity, a perfect storm if you will, for women entrepreneurs.” Harris cites historically low-interest rates paired with large amounts of cash on the balance sheets of investors as the factors in play for women with good ideas for their nascent businesses.
The Number of Women Led “Middle Market” Firms Is Rising
Middle-market firms are those that make between $10 million and $1 billion annually. Between 2008 and 2014, the number of middle market firms overall increased by just 4%. The percentage of those businesses owned by women, however, has increased by 32%.
Representation matters. As more women succeed in business, succeeding in business seems more possible to more women. Between the increase in successful businesses and the increased media coverage of those businesses and the fresh acknowledgment of the challenges women face going into business, it seems more and more possible for women to be successful entrepreneurs.
The Role of Government Policies
Curious about the government’s role in the journey of women entrepreneurs? It’s a complex relationship, to say the least. Government initiatives like the Small Business Administration’s 8(a) Business Development program offer a lifeline. Specifically tailored for small businesses owned by disadvantaged individuals, including women, this program grants access to coveted federal contracts. Keep in mind that federal agencies are required to allocate a minimum of 5% of their contract spending to women-owned businesses. However, don’t start celebrating just yet.
There’s another side to the story. Policies such as complicated zoning laws, rigorous licensing protocols, and perplexing tax codes can prove to be major stumbling blocks. Particularly for those newly entering the entrepreneurial world, these obstacles add legal and financial complexity, increasing both costs and entry barriers. It’s not just financial capital at stake here; it’s also the emotional toll and time investment needed to wade through the bureaucratic intricacies.
But here’s the compelling part: Change is brewing. The pending New Business Preservation Act could channel venture capital into startups in marginalized communities, with a spotlight on women-led and minority-led businesses. What we’re looking at could be more than just token commitments to equality; it’s a genuine effort to cultivate it. Envision a world where women entrepreneurs don’t just make ends meet but prosper, all thanks to actionable government support. This isn’t a pipe dream; it’s an attainable future, and it’s long overdue.
Women Are Already Creating Successful Businesses on Main Street
While the news loves to feature venture capital tech firms and women-led businesses that make millions and billions, Maria Contreras-Sweet, head of the Small Business Administration, has written that small businesses in all 50 states and the top metro areas are seeing recovery; those recoveries are being driven by women and their companies.
Traditional Funding To Women Entrepreneurs Is Increasing
According to the NWBC’s 2015 Annual Report, the SBA made over $3.8 billion of capital available to women entrepreneurs last year. This pushed lending to women up 19 percentage points to over 36%.
While women have used nontraditional methods to get enough capital together to start their businesses – methods like credit cards, lines of credit on their homes, or taking loans from non-traditional lenders – these loan types often come with significantly higher interest rates.
Support Networks and Role Models
According to Jacqueline Prause, senior editor at SAP, along with just seeing successful women in the media and at business conventions, the increase in women entrepreneurs also provides young women wanting to venture into business with unprecedented opportunities for networking and role models.
As entrepreneurs, we often talk about the importance of both formal education for budding entrepreneurs, but also local mentorship. While you can learn a great deal about the theory of running a business from the Internet, an MBA program, or a business bestseller, it takes a local expert to teach you what you need to know about the Main Street where your business is located. A local mentor can tell you which bank is friendlier to small business concepts, who to call at the local paper to get your ad in at the last minute, and which events are the best to sponsor.
When that mentor also has knowledge about the particular struggles that a woman entrepreneur (or a minority entrepreneur) is going to face, they can offer extra, more specific advice that can help you succeed.
Women owning businesses is not a new feature of the American economy. For many, many years, women have owned successful businesses and been economic drivers. What is new – and exciting – is finally getting think pieces and public support for the fact that businesses owned by women are a huge opportunity for the American economy to finally build a substantial recovery from the struggles it has had in the early part of this millennium.
From the smallest owner-operated businesses to the largest tech-based companies, women are building businesses, employing people, earning profit, and pushing the economy forward. They have been a giant, untapped force in the economy. By celebrating, encouraging, and pushing businesses owned by women, the economy helps itself grow and succeed.
Women Entrepreneurs in Rural America
While the glamour often gravitates toward Silicon Valley and bustling urban centers, it’s time to shift our attention to the real powerhouses fueling America’s economy: women entrepreneurs in rural regions. Far from merely running cozy B&Bs, these women helm a wide variety of enterprises, from crafting artisan foods to pioneering renewable energy projects. A report from the National Women’s Business Council reveals that these rural entrepreneurs contribute an impressive $68 billion to the nation’s economy. But they do more than just generate revenue; they also stimulate local job growth and reinvest in their communities, enhancing local services and resources.
Here’s where it gets truly captivating: these rural entrepreneurs are capitalizing on local opportunities in ways big corporations frequently miss. A Center for Rural Affairs study discovered that women-led agribusinesses in these areas adopt eco-friendly farming practices at a rate that outpaces the national average by 20%. This not only revitalizes local economies but also paves the way for more sustainable living standards.
So, when you hear about a trailblazing venture next time, don’t be shocked if it originates from a smaller locale and features a woman leading the charge. These businesswomen are not merely staying afloat; they’re flourishing—and they’re doing so with creativity and an unwavering dedication to their communities.
The Future Outlook
The entrepreneurial world for women is undergoing more than just a change—it’s experiencing a full-scale revolution. Traditional strongholds like healthcare, education, and renewable energy are giving way to emerging sectors where women are making their mark—think Artificial Intelligence, Blockchain, and even Space Exploration. A recent PwC report reveals that funding for women-led startups in AI has surged by 72% over the past two years. This isn’t just about diversifying the playing field; it’s a groundswell that promises to redefine both innovation and economic growth. Pioneering ventures like CloudMinds, helmed by entrepreneur Claire Delaunay, are taking robotics to the next level and pointing to a promising future in female entrepreneurship.
But let’s pause for a moment. The burgeoning landscape also owes its vigor to decentralized finance (DeFi), a game-changer in making capital more accessible. These platforms are democratizing finance, enabling women to sidestep traditional fiscal gatekeepers. A Harvard Business Review study reveals that female entrepreneurs gain funding 17% faster using DeFi platforms than traditional means. This isn’t a passing fad; it’s a seismic shift that could upend venture capitalism’s barriers, heralding a golden era for women in business.
The key takeaway? The future for women entrepreneurs isn’t predestined—it’s being actively constructed through coding, data analysis, and crowd-funding. Looking forward, it’s unmistakable that women are more than just contributors to the future—they are its architects. From healthcare solutions powered by AI to eco-friendly space travel, the next era of female entrepreneurship is, quite simply, groundbreaking. And for any remaining skeptics, take note: the future isn’t just female. It’s also intersectional, inclusive, and ripe with innovation.
What sectors have the most women entrepreneurs?
While tech and fashion often steal the spotlight, women entrepreneurs are making waves in the healthcare, education, and renewable energy sectors. These sectors offer not just profitability but also opportunities for societal impact.
How do women entrepreneurs usually secure funding?
Beyond traditional venture capital, women entrepreneurs are increasingly turning to crowdfunding, angel investors, and industry-specific grants. Specialized funding programs aimed at women are also on the rise, offering more than just capital—think mentorship and networking.
What are the common challenges faced by women entrepreneurs?
Apart from funding constraints, women entrepreneurs often grapple with societal biases and a lack of representation in decision-making roles. Additionally, balancing family expectations with business demands remains a unique challenge.
Are there any grants or subsidies specifically for women entrepreneurs?
Yes, numerous grants are designed exclusively for women entrepreneurs. For instance, the Eileen Fisher Women-Owned Business Grant Program and the Cartier Women’s Initiative offer substantial financial support and resources.
How can one find a mentor in the field of entrepreneurship?
Networking events, industry seminars, and online platforms like LinkedIn are excellent avenues. Organizations like SCORE and the Female Founders Alliance also offer mentorship programs specifically tailored for women entrepreneurs.