REASONS WOMEN BECOME ENTREPRENEURS
Women have owned and operated businesses for decades, but they were rarely recognized or given credit for their efforts. Often, women entrepreneurs were “invisible” as they worked side by side with their husbands, and many only stepped into leadership positions when their husbands died. But a variety of factors have combined in recent years to contribute to the visibility and numbers of women who start their own businesses.
As more women joined the work force, they gained the professional managerial skills and experience they would need as entrepreneurs. In addition, many women felt as if they were discriminated against in large companies, which provided them with an incentive to be their own bosses. Some women also have found entrepreneurship to be an ideal way to juggle the competing demands of career and family, while some single mothers have started businesses as a way out of poverty.
Although the small businesses owned by women have traditionally focused on fashion, food and other service sectors, in recent years, women entrepreneurs have been moving rapidly into manufacturing, construction, and other industrial fields. Women business owners still face greater difficulties in gaining access to commercial credit and bidding on government contracts than do their male colleagues, and pockets of resistance to women entrepreneurs remain strong in some industries and geographic regions, But millions of successful businesses launched and managed by women now dot the world’s business landscape, each a testament to the legitimacy of the aspirations and talents of the woman entrepreneur.
Reasons women become entrepreneurs
Many studies indicate that women start businesses for fundamentally different reasons than their male counterparts. While men start businesses primarily for growth opportunities and profit potential, women most often found businesses in order to meet personal goals, such as gaining feelings of achievement and accomplishment. In many instances, women consider financial success as an external confirmation of their ability rather than as a primary goal or motivation to start a business, although millions of women entrepreneurs will accept that financial profitability is important in its own right.
Women also tend to start businesses about ten years later than men, on average. Motherhood, lack of management experience, and traditional socialization have all been cited as reasons for delayed entry into entrepreneurial careers. In fact, over 30 per cent of women entrepreneurs reported that they started a business due to some traumatic event, such as divorce, discrimination due to pregnancy, or the corporate glass ceiling, health of a family member, or economic reasons such as a layoff.
But a new talent pool of women entrepreneurs is forming today, as more women opt to leave the corporate world to chart their own destinies. Many of these women have developed financial expertise and bring experience in manufacturing and non-traditional fields. As a result, the concentration of women business owners in the retail and service sectors – and in traditional industries such as cosmetics, food, fashion, and personal care – is slowly changing.
Problems faced by women entrepreneurs
One of the main problems facing women entrepreneurs is obtaining financing. In the early2000s, study after study confirmed that women business owners did not receive equal treatment at financial institutions. Over half of women business owners believe that they faced gender discrimination when dealing with a loan officer. And 57 percent of women business owners reported difficulty in working with financial institutions. But this figure has declined substantially with 15 percent. Not only have women business owners become more savvy about these matters and boast businesses that are more stable and mature, the banking community has experienced an awakening. They have made tremendous efforts to reach out to business owners and have taken a proactive role in making the relationship better.
Another area in which women business owners have been historically shortchanged is procurement, or the selling of their goods and services to city, state, and federal governments. Some efforts have been undertaken to rectify this situation. If a company is 51 percent owned and controlled by a woman, it can obtain certification and bid for government contracts. In addition, many government agencies at the state and federal levels have created set-aside programs which specifically help women-owned businesses in the bidding process. Nonetheless, the percentage of government contracts going to women-owned businesses still remains very low.
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