It’s an exciting time to be a woman business owner! In 2021, 31% of all small businesses or franchises in the U.S. were owned by women, an increase of 4% since 2020, (1) and that’s in the face of a pandemic that greatly impacted most businesses!
Although business owners work extremely hard and overcome significant obstacles to make their businesses succeed, women face unique challenges in the business world that most men simply don’t have to reckon with. Below are the top 3 challenges I’ve seen women business owners face (and overcome) over the years.
1. Lack of Access to Funding
Research is finding that although more women entrepreneurs are applying for business loans, the loans they’re granted are 36% lower than loans approved for male entrepreneurs, despite a trend for higher average operating expenses within women-owned businesses. (2)
Not to mention, women entrepreneurs have a more difficult time accessing funding from venture capital investors. (3) Reasons for this particular challenge are varied, but one likely explanation may be that male investors prefer to invest in male-owned businesses. Conversely, female investors may be more inclined to invest in women-owned businesses. (The psychological term for this phenomenon is the similarity-attraction effect.) (4)
With fewer women venture capitalists, female entrepreneurs have a smaller pool of potential investors to pitch their ideas to.
2. Not Charging What You’re Worth
Because women have had to work so hard to break glass ceiling after glass ceiling in business and industry, they’ve been inundated for decades with subtle and not-so-subtle messages that their work is less valuable. When it comes to running a business, the services rendered must reflect what the market is willing to pay and what makes sense for the business owner’s bottom line once overhead expenses, taxes, and payroll are deducted. Oftentimes, women business owners charge less for their services or products because they’re afraid potential consumers will balk at more expensive prices. In fact, one survey found that women who work for themselves earn 28% less than their male peers. (5)
To rectify this, women business owners must charge prices that similar businesses in their industry are charging. And if potential clients or customers try to negotiate, move on. More than likely, there are other prospects out there willing to pay you what you’re worth.
3. Not Knowing When to Scale
Working women everywhere know the challenges of balancing career responsibilities with domestic responsibilities, and perhaps no one knows this better than the female business owner. Despite ever-increasing numbers of women in the workforce, many women are still expected (or expect themselves) to shoulder most of the childcare and housework burdens. Case in point: self-employed women bore the brunt of the COVID-19 pandemic, quitting their jobs or scaling back when schools and childcare facilities shut down. (6)
It’s no surprise that women business owners have high expectations for themselves to be able to run their business entirely on their own. But not only is this mindset likely to result in burnout, it’s also likely to hold you back from growing your business and making more money.
For most business owners, there comes a time when it’s in their best interest to spend more time on money-making tasks and less time on administrative tasks. Although hiring outside help might feel counterintuitive at first, knowing when it’s time to scale your business can result in much greater returns down the road.
Conquer These Challenges
At Farrall Wealth, we’ve helped many female entrepreneurs overcome these challenges and more. We provide financial planning services for both your business and your personal life so you can spend more time doing what you do best. To get started, call our office at 219-246-2516, email email@example.com, or schedule a complimentary consultation online. Be sure to visit our website to learn more and connect with us on LinkedIn, Facebook, Twitter, and YouTube.
Greg Farrall is CEO and owner of Farrall Wealth, an independent, boutique wealth management firm that is dedicated to helping women and business owners create customized financial plans that allow them to grow, protect, preserve, and distribute their wealth. Greg is known for being a trustworthy problem-solver who walks his clients through whatever life throws at them. He prioritizes building long-term relationships and is passionate about going the extra mile for his clients so they can pursue their goals and live the lives they want. Greg has a bachelor’s degree in international business from the University of Wollongong in Australia and a bachelor’s degree in finance and marketing from Indiana University Bloomington. He is a Professional Plan Consultant® (PPC®) and a Certified Wealth Strategist® (CWS®) professional. And he recently received his Certified Plan Fiduciary Advisor (CPFA®) designation. You can listen to him on his financial literacy and business topic podcast, Money Matters with Greg, on iTunes, Google and Spotify. He’s also on YouTube, Twitter, and Facebook at @FarrallWealth.
Greg is a pillar of his community and served as the 2013-14 co-chair for the United Way campaign, through which he helped raise $1.8 million for 38 nonprofit organizations across Porter County, Indiana. He also served as president of the Valparaiso Rotary Club. Currently, he is on the advisory board for the Kelley School of Business and Dean of Students’ board at Indiana University. He also holds a position on the Culver Academies parents’ board.
When he is not working, you can find Greg spending time with his family or investing in one of his many passions, which include cooking, Spartan races, fly fishing, and meditation. To learn more about Greg, connect with him on LinkedIn.
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