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Currently, only about 30 per cent of businesses in Europe are owned by women, and the World Economic Forum’s 2020 Global Gender Gap Report estimates that it will take nearly 95 years to close the gender gap globally. According to a McKinsey Global Institute report, increasing women’s equality could boost the global economy by $12 trillion (£9.5 trillion) by 2025. In an ideal scenario, this figure could even rise to $28 trillion (£22 trillion), highlighting the substantial economic benefits of gender equality.
“This impact is roughly equivalent to the size of the combined Chinese and US economies today,” the study noted.
Inequalities Faced by Women in Business
Inequality in business is pervasive, with several disparities separating men and women in the sector. The World Economic Forum reported in 2019 that women typically earn just 54 cents for every dollar men earn. This pay gap reflects broader systemic issues that women face in the workforce.
In the venture capital industry, the disparity is even more pronounced. A study by researchers from Harvard, MIT, and the Wharton School revealed that more than two-thirds of investors chose to invest in pitches made by male presenters over identical pitches made by female presenters. This bias persists despite evidence suggesting that female-founded and co-founded firms often outperform those led solely by men.
Research from the Harvard Business Review indicates that women excel in most leadership roles compared to their male counterparts. Women also outshine men in several critical skills, including problem-solving, creativity, and teamwork. This research underscores the immense potential of women when given equal opportunities through capacity building, mentoring, and access to credit, alongside their inherent leadership abilities crucial for entrepreneurial success.
The Rise of Female Entrepreneurs
Women now control 40 per cent of the world’s wealth, a figure that has steadily increased throughout the 20th century, according to Credit Suisse’s 2018 Global Wealth Report. In the past year alone, nearly 250,000 women-owned enterprises have been established, reflecting a significant rise in female entrepreneurship.
The report also highlights that ethnic minority-led organisations have higher female representation in leadership, with 20 per cent of these businesses having a female CEO. This trend signifies a positive shift towards greater inclusivity and diversity in business leadership.
Five Essential Tips for Women Aspiring to Launch Their Own Businesses
Michelle Ovens, the founder of Small Business Britain and f:Entrepreneur, is on a mission to celebrate the increasing number of female entrepreneurs who make significant contributions to the economy and inspire many along the way. Here are five essential tips she offers to help women launch their own businesses successfully:
1. Build a Strong Network
Establishing a robust support system is crucial for any entrepreneur. Networking can provide valuable connections, mentorship opportunities, and support from other business owners. Engaging with industry groups, attending networking events, and leveraging social media platforms like LinkedIn can help build a solid network that can support and propel your business forward.
2. Secure Funding Wisely
Many female founders are hesitant to cede control to traditional “man-in-suit” investors. Instead, they can prepare a comprehensive two-year business plan and discuss funding options with their bank. Exploring alternative funding sources such as grants, crowdfunding, and angel investors who support female-led businesses can also be beneficial. Understanding the different funding options and choosing the right one for your business can ensure financial stability without compromising control.
3. Seek Mentorship and Learning Opportunities
Avoiding common pitfalls can be easier with guidance from experienced mentors in business or accounting. Speaking with someone who has successfully navigated the entrepreneurial landscape can provide insights and advice that are invaluable in the early stages of your business. Consider joining mentorship programmes, seeking out industry veterans, or connecting with successful entrepreneurs willing to share their knowledge.
4. Be Adaptable
Flexibility is key to surviving and thriving in the ever-changing business landscape. Adopting adaptive business models and open working environments can help your business recover from unforeseen challenges. Staying agile and being willing to pivot when necessary can allow you to respond to market changes effectively and seize new opportunities as they arise.
5. Empower Your Leadership
Harnessing your leadership skills and continually developing them can set your business apart. Effective leadership involves not only managing your team but also inspiring and motivating them. Participate in leadership training programmes, read widely on leadership strategies, and continually assess and refine your leadership approach to ensure it aligns with your business goals and values.
As Michelle Ovens and other advocates continue to highlight, the rise of female entrepreneurs is a testament to the potential that can be unlocked when women are given equal opportunities. By embracing these tips and fostering a supportive ecosystem, aspiring female entrepreneurs can overcome challenges and achieve success in their ventures.
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