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Today, more women are breaking free from the traditional, gender-specific roles and venturing into the business world. Not only are they holding high corporate positions but they are also successfulÂ women entrepreneursÂ who own almost half of all businesses in the United States. The steady rise in female entrepreneurs can be due to many different reasons, most of which share the same rational as their male counterparts-passion for their ideas, the desire to become their own boss, and the need to address philanthropic causes. A recent study indicated that 1 out of every 11 adult women is anÂ entrepreneurÂ in the United States. Women business owners contribute to the overall employment of 18 million workers and generate anywhere from $2 to $3 trillion in U.S. economy revenues.
Many of the important facts that follow will support these findings.
1. Demographic characteristics:
Studies have shown that successfulÂ Women entrepreneursÂ start their businesses as a second or third profession. Many of them have experienced a considerable amount of dissatisfaction with their previous careers and in working for others. Often times, these innate desires to be their own boss are the driving forces that motivated them to pursue entrepreneurship.
As a business owner, these once unhappy individuals are now more satisfied and content with their personal and professional life. In addition, because of their previous careers, women entrepreneurs enter the business world later on in life, around 40-60 years old. Many of them have higher education degrees, a significant characteristic that many successful female entrepreneurs have in common.Â Women entrepreneursÂ also tend to offer better health care benefit packages, on the job training and education, more tuition reimbursement for students and continuing education employees, and provide more vacation and paid leave options to their staff.
2. International implications:
From a large-scale perspective, female entrepreneurs encompass approximately 1/3 of all entrepreneursÂ worldwide. A recent international study found that women from low to middle income countries (such as Russia and the Philippines) were more likely to enter early stage entrepreneurship when compared to those of higher income countries (such as Belgium and Sweden). A significant factor that may play a role in this disparity can be contributed to the fact that women from low income countries often seek an additional means of income to support themselves and their families. As a result, many of them often resort to entrepreneurship in addition to their current jobs. However, womenÂ entrepreneursÂ from higher income countries were more successful at establishing their businesses and exuded more confidence than those of poorer nations, perhaps because of the availability of resources and financial backing from families and friends.
In addition, women who had higher education experience were more likely to transform their existing businesses into successful ones, proving that learning and work familiarity is universal across all cultures and greatly contributes to the overall success of any business venture.
Recent studies also indicate that women entrepreneurs are assembling themselves into groups or confederacies. The reasons behind this trend have to do with the desire to establish solid womenÂ business networks, where members can collectively pool resources and expertise together.
Women business networks have also been found to be more generous in their philanthropic contributions. At least seven out of tenÂ women entrepreneursÂ of a new business volunteer their time at least once per month to community-related causes. In addition, 31% of them contribute $5,000 or more to various charities annually.
Even though manyÂ female entrepreneursÂ have home-based and service-related businesses, they are unafraid of technology and have recently entered many industries that were once male-dominated, such as construction, design, manufacturing, and architecture. In addition, the retail industry still makes up the largest share of women-owned firms.
One of the advantages of working in a women-owned new business is that the workforce is more diverse. Women entrepreneurs are more likely to employ a staff that is more gender-balanced, comprising of 52% women and 48% men on average. On the other hand, most male-owned businesses have a workforce that is often more than 65% men.
4. Sources of capital:
The fact that more women entrepreneurs have risen in the past few years has been made possible in part by the easy availability of business capital. Women entrepreneurs tend to fund their startups with differentÂ sources of funding, including "bootstrap" finances (personal money from savings and credit cards) and commercial loans. Today, not only are there more grants and bank loans made available to women entrepreneurs, but there are also more diversity programs that specialize in providing seed funding to female business owners.
However, despite the recent achievements, research shows that it still remains difficult for women of color to get access toÂ seed funding. According to one recent study on women entrepreneurs, approximately 60% of Caucasian women business owners were able to obtain bank credit, compared to 50% of Hispanic, 45% of Asian, 42 % of Native American, and 38% of African-American women entrepreneurs.
5. Present challenges:
Even though female entrepreneurship and the formation of women business networks is steadily rising, there are still many prospective women entrepreneurs who do not follow through with theirÂ great business ideas. This is widely due to the fact that many challenges exist for them to overcome. First and foremost, many prospective women entrepreneurs may fear the debt associated with their startup. They may not have the resources available to make educated decisions about properly raising capital or may even have been discouraged by family and friends. As mentioned earlier, if anÂ entrepreneur trulyÂ believes in their business ideas, then they will seek any means to move forward and commercialize their concepts.
A second challenge may be their lack of knowledge in information technology and business skills. Even though many successful business ventures are IT-related, there are many other thriving industries that do exist. Experience is always an advantage; however, one just has to conduct ample research on their industry, their consumer base and competitors, and speak to entrepreneurs who have already gone through the process.Â EntrepreneurshipÂ is a learning experience and even the most successful business owners have had to learn new things throughout the development of their company.
Another major challenge that many women entrepreneurs may face is the traditional gender-roles society may still have on women.Â EntrepreneurshipÂ is still a male-dominated field, and it may be difficult to surpass these conventional views. However, it is very important to be aware that despite the negativity that may exist, over 9 million women own their own businesses in the U.S. In fact, of all U.S. enterprises that exist, over 40% comprise of women-owned businesses. The United States Census Bureau predicts that by the year 2025, the percentage of women entrepreneurship will increase to over 55%. Many women feel a great deal of empowerment by the opportunity to own their own company and may now be motivated by such high statistics.
7. Future prospects:
there are many promising predictions for womenÂ entrepreneursÂ in the near future. More coalitions will be formed among female associates, enabling the establishment of female business networks to flourish in the business world. In addition, the U.S. Census envisions that women entrepreneurs and female business networks will both remain dominant, comprising of over 50% of all business in the United States in the next several years. Many women entrepreneursÂ with home-based and service-related businesses will eventually shift to the information technology industry, making this once male-dominated commerce to be one of equal gender appeal.
With progressive changes, the United States economy will refine itself to a financial system that will rely heavily on the internet and e-commerce for their business practices. Enterprises will also focus more on women-related issues and principles.
Independent of the way different studies have been conducted, women entrepreneurs are found to have an important impact on the economy, both in their ability to create jobs for themselves and to create jobs for others. Although the actual economic impact in most OECD member countries has not been assessed, women entrepreneurs have an important impact on the economy both by the number of small firms they are able to create and because a number of them are able to create growing firms.
â€¢ In all countries women still represent a minority of those that start new firms, are self-employed, or are small business owner-managers. Obviously, this economic resource, if not untapped, has not been successfully explored yet.
â€¢ Specific obstacles to women's entrepreneurship are: type of education, lack of role models in entrepreneurship, gendering of entrepreneurship, weak social status, competing demands on time and access to finance.
â€¢ Women's entrepreneurship must be examined both at the individual level (i.e. the choice of becoming self-employed) and at the firm level (the performance of women owned and managed firms) in order to fully understand the differences between men's and women's entrepreneurship.
â€¢ Women's entrepreneurship is dependent on both demand side (political and institutional framework, family policy and market sources) and supply side factors (the availability of suitable individuals to occupy entrepreneurial roles).
â€¢ In addition, women's entrepreneurship depends on both the situation of women in society and the role of entrepreneurship in that same society. Both the factors that affect the gender system and the factors that affect entrepreneurship in society are involved.
â€¢ In order to provide accurate statistics on women's entrepreneurship, a number of possible method biases need to be controlled
Advantages and Disadvantages of women entrepreneurs
Women entrepreneurs face a series of problems right from the beginning till the enterprise functions. Being a woman itself poses various problems to a woman entrepreneur, the problems of Indian women pertain to her responsibility towards family, society and lion work.
The tradition, customs, socio cultural values, ethics, motherhood subordinates to ling husband and men, physically weak, hard work areas, feeling of insecurity, cannot be tough etc are some peculiar problems that the Indian women are coming across while they jump into entrepreneurship.
Women in rural areas have to suffer still further. They face tough resistance from men. They are considered as helpers. The attitude of society towards her and constraints in which she has to live and work are not very conducive.
Besides the above basic problems the other problems faced by women entrepreneurs are as follows:
1. Family ties:
Women in India are very emotionally attached to their families. They are supposed to attend to all the domestic work, to look after the children and other members of the family. They are over burden with family responsibilities like extra attention to husband, children and in laws which take away a lots of their time and energy. In such situation, it will be very difficult to concentrate and run the enterprise successfully.
2. Male dominated society:
Even though our constitution speaks of equality between sexes, male chauvinism is still the order of the day. Women are not treated equal to men. Their entry to business requires the approval of the head of the family. Entrepreneurship has traditionally been seen as a male preserve. All these put a break in the growth of women entrepreneurs.
3. Lack of education:
Women in India are lagging far behind in the field of education. Most of the women (around sixty per cent of total women) are illiterate. Those who are educated are provided either less or inadequate education than their male counterpart partly due to early marriage, partly due to son's higher education and partly due to poverty. Due to lack of proper education, women entrepreneurs remain in dark about the development of new technology, new methods of production, marketing and other governmental support which will encourage them to flourish.
4. Social barriers:
The traditions and customs prevailed in Indian societies towards women sometimes stand as an obstacle before them to grow and prosper. Castes and religions dominate with one another and hinder women entrepreneurs too. In rural areas, they face more social barriers. They are always seen with suspicious eyes.
5. Shortage of raw materials:
Neither the scarcity of raw materials, sometimes nor, availability of proper and adequate raw materials sounds the death-knell of the enterprises run by women entrepreneurs. Women entrepreneurs really face a tough task in getting the required raw material and other necessary inputs for the enterprises when the prices are very high.
6. Problem of finance:
Women entrepreneurs stiffer a lot in raising and meeting the financial needs of the business. Bankers, creditors and financial institutes are not coming forward to provide financial assistance to women borrowers on the ground of their less credit worthiness and more chances of business failure. They also face financial problem due to blockage of funds in raw materials, work-in-progress finished goods and non-receipt of payment from customers in time.
7. Tough competition:
Usually women entrepreneurs employ low technology in the process of production. In a market where the competition is too high, they have to fight hard to survive in the market against the organised sector and their male counterpart who have vast experience and capacity to adopt advanced technology in managing enterprises
8. High cost of production:
Several factors including inefficient management contribute to the high cost of production which stands as a stumbling block before women entrepreneurs. Women entrepreneurs face technology obsolescence due to non-adoption or slow adoption to changing technology which is a major factor of high cost of production.
9. Low risk-bearing capacity:
Women in India are by nature weak, shy and mild. They cannot bear the amount risk which is essential for running an enterprise. Lack of education, training and financial support from outsides also reduce their ability to bear the risk involved in an enterprises.
10. Limited mobility:
Women mobility in India is highly limited and has become a problem due to traditional values and inability to drive vehicles. Moving alone and asking for a room to stay out in the night for business purposes are still looked upon with suspicious eyes. Sometimes, younger women feel uncomfortable in dealing with men who show extra interest in them than work related aspects.
11. Lack of entrepreneurial aptitude:
Lack of entrepreneurial aptitude is a matter of concern for women entrepreneurs. They have no entrepreneurial bent of mind. Even after attending various training programmes on entrepreneur ship women entrepreneurs fail to tide over the risks and troubles that may come up in an organisational working.
12. Limited managerial ability:
Management has become a specialised job which only efficient managers perform. Women entrepreneurs are not efficient in managerial functions like planning, organising, controlling, coordinating, staffing, directing, motivating etc. of an enterprise. Therefore, less and limited managerial ability of women has become a problem for them to run the enterprise successfully.
13. Legal formalities:
Fulfilling the legal formalities required for running an enterprise becomes an upheaval task on the part of a women entrepreneur becauseÂ of the prevalence of corrupt practices in government offices and procedural delays for various licenses, electricity, water and shed allotments. In such situations women entrepreneurs find it hard to concentrate on the smooth working of the enterprise.
14. Exploitation by middle men:
Since women cannot run around for marketing, distribution and money collection, they have to depend on middle men for the above activities. Middle men tend to exploit them in the guise of helping. They add their own profit margin which results in less sales and lesser profit.
15. Lack of self confidence:
Women entrepreneurs because of their inherent nature, lack of self-confidence which is essentially a motivating factor in running an enterprise successfully. They have to strive hard to strike a balance between managing a family and managing an enterprise. Sometimes she has to sacrifice her entrepreneurial urge in order to strike a balance between the two.
It is used to be a guys world. Business used to play naturally into a male mindset.
If you were a woman thinking about a business, it is important to know that you have a lot of advantages in doing so. If you were a guy, well, its time to get back in touch with your feminine side.
Let's face it women are natural networkers. They love to talk, mingle and rub elbows. This is the very reason why husbands rarely ever manage the social calendar. In today's business environment, mastering social media is mandatory and the ladies absolutely have a leg up!
Women in general can size up another person much faster than her male counterpart. In today's ultra-fast paced business environment, you need the ability to quickly identify the allies and the enemies, regardless if you are a male or female, you need to trust your gut.
In business, there are a lot of painful moments. A lot women definitely have an advantage in this area.
Women are known for juggling many tasks at the same time and still being able to produce excellent results. Conversely, the guys are masters at focusing on one thing. Still, the advantage in today's distracting environment goes to women.
Women inherently seem to have more patience. And in today's business environment, patience is key! Aggressive business strategies are not paying off like they once did. Slow and steady wins the race in this category.
Whereas men have the tendency to think in a systemizing manner, women are more apt to developing emotional intelligence, thus empathizing more, building strong interpersonal skills that are vital for networking and strategically using their social networks in order to build support for their ideas.
Women seem to be natural marketers, extremely passionate and enthusiastic about their choices, talking about them and sharing their thoughts. They naturally emphasize the benefits of their potential clients and are aware of how to highlight the positive features.
Most of the women who start a business have a great passion for their work and a philanthropic commitment to society. If they have the drive to pursue entrepreneurship, it means they are not afraid of taking risks and will also make monetary gain a less likely factor in their business pursuits.
Women entrepreneursÂ have become a strong driving force in today's corporate world. Not only are they able to equalize their duties of both motherhood and entrepreneurship but they also comprise of almost half of all businesses owned today. Many women entrepreneurs have an average age of 40-60 years old because they have had previous careers in other areas. Their primary goal is not monetary reward but rather personal satisfaction and community involvement. Many of them are educated and assemble into groups in order to poolÂ business ideasÂ and resources together.
Women entrepreneurs also have more access to business capital andÂ seed fundingÂ than ever before. Yet despite the many opportunities, many prospective women entrepreneurs are intimidated to move forward. Overall, there are many promising forthcoming predictions for women business owners. They will continue to form female business networks, transition towards information technology, and rely strongly on e-commerce as their form of trade.
While female entrepreneurs only represent a small portion of the overall number of businesses in the country right now, make no mistake, that percentage will continue to climb. The research shows that the growth of female owned businesses is growing at twice the rate of male owned ones. The more women take the leap and open their business, the more others will follow in line. And because of these advantages, among others, they should have a pretty good chance of succeeding!Â