Running a successful enterprise involves encountering a wide range of obstacles—even more so if you’re a woman. It’s no secret that the problems faced by women entrepreneurs are unique and often unlike anything their male counterparts experience. Despite all odds, women around the world have been making a mark in the business world, proving their acumen beyond doubt.
In theory, things might be looking up for women in business—statistics show that out of 582 million entrepreneurs in the world, 252 million are women. But numbers don’t always tell us everything. Even though women have been fighting a fierce battle against the challenges of women entrepreneurs, women-owned businesses have to work harder to survive. According to the Sixth Economic Census conducted by the Ministry of Statistics and Program Implementation, a mere 14% of businesses in India are women-owned. It’s clear that the problems of women entrepreneurs are far from over. To understand what these problems are, we must first understand who women entrepreneurs are and how they function.
Who Or What Are Women Entrepreneurs?
In the broadest sense, this is a woman or a collective of women initiating, innovating, organizing and running a business activity. In 1984, the Government of India defined a woman-led enterprise as one that is owned and controlled by a woman who has a minimum financial interest of 51% of the capital.
Entrepreneurship is a tool of empowerment for women. Furthermore, it’s widely acknowledged that including women in entrepreneurship is necessary for a nation’s economic development. And yet, this has not lessened the specific challenges of women entrepreneurs. So what are some of these problems that keep women entrepreneurs in the minority?
Problems Faced By Women Entrepreneurs
Women in business have been proving they’re as bankable as their male colleagues. Yet, they struggle to gain the same degree of acceptance. What are some of the main problems faced by women entrepreneurs in their path toward success?
1. Scarce Funding
This is one of the toughest challenges faced by women entrepreneurs. They’re not taken seriously and investors are hard to come by. Holders of capital are generally reluctant to pump it into women-led enterprises. As a result, women develop their entrepreneurial ventures with little to no financial support. Some use their savings, while others fall back on credit cards. This drives up their credit utilization, causing them to be viewed as less credit-worthy and further dims their chances of getting loans or capital from investors. Many women report being refused aid even though they already run successful businesses.
Studies have shown that women-led businesses are foremost among enterprises lacking financial aid. Data also shows that women entrepreneurs’ applications for bank loans are more likely to be delayed or rejected. According to a 2019 report from the International Finance Corporation, more than 70% of the total financial needs of women entrepreneurs in India remain unfulfilled. This exacerbates the problems of women entrepreneurs, as financial institutions display a marked preference for funding businesses owned by men.
2. Being Accepted As A Leader
The challenges faced by women entrepreneurs who assume leadership roles can be immense. Entrepreneurship is still a largely male-dominated arena. As a result, people are often unwilling to learn from or take orders from women. Earning respect thus proves to be an uphill task for women entrepreneurs.
3. Juggling Responsibilities
This is one of the most persistent problems of women entrepreneurs. The onus of ‘balancing’ work and domestic life—an expectation rarely placed upon men—falls upon women in most cases, even if they’re successful in business. Given the demanding nature of both personal and professional spheres, women often end up feeling compelled to give up one for the other. At home, they may need to juggle home care, child care and eldercare. At the same time, an enterprise also demands leadership and unwavering focus.
This balancing act can exhaust even the most driven individual. It’s especially hard on those women entrepreneurs who don’t have family support or society’s approval; they have to walk their chosen path alone. While some women find they can strike a successful balance, others are expected to be their families’ primary caregivers. They end up feeling pulled in different directions.
4. Limited Business Networks
Among the problems faced by women entrepreneurs in the male-dominated business world is the restricted access to entrepreneurial networks. This prevents women from creating networks of their own. A survey showed that women were not included in crucial business networks which would help them foster connections, grow their enterprise, or find clients, vendors and partners. While men carry out all of these activities with ease because of their robust networks; women entrepreneurs are viewed as not belonging to these circles and have trouble breaking through.
5. Lack Of Access To Financial Knowledge
It’s rare for women in India to be encouraged to be risk-takers in business. As such, they’re left out of crucial financial knowledge about the markets and running an enterprise. They have to actively seek it out and educate themselves. This proves to be among the major challenges of women entrepreneurs. First, it restricts their access to the market and deprives them of valuable information. Second, it diminishes their ability to bear risks, further allowing financial institutions to reject their applications for aid.
6. Risks Involving The Markets
Not having the same access to financial knowledge afforded to men creates more problems faced by women entrepreneurs. They might have to rely on middlemen to get things done. They may even feel the need for a male partner to close deals or carry out negotiations. The markets spell tough competition for everyone, but women entrepreneurs are often at an extra disadvantage as they don’t have a level playing field with their male counterparts.
7. Lack Of Representation
One of the biggest problems of women entrepreneurs is a lack of opportunity to grow and gain experience. Owing to this, women continue to hold very few senior management roles, and can rarely be found on boards of directors. The lack of representation is also reflected in the absence of role models and mentors for women who run businesses. Men, on the other hand, find ready mentors and have several big names to look up to for inspiration. Some of the toughest challenges faced by women entrepreneurs stem from the absence of gender diversity in business.
8. Strain Caused By The Pandemic
Covid-19 added to the troubles of women entrepreneurs, many of whom had to struggle to keep their businesses afloat. In response to a survey, one in four women entrepreneurs in India said that the onus of caring for their families during the lockdown fell upon them, thereby eating into the time they would’ve spent on their enterprises. The burden of trying to save a business while grappling with increased domestic responsibilities brought on by the pandemic was predominantly borne by women.
9. Gender Bias
All of these challenges faced by women entrepreneurs are rooted in gender inequality. Women business owners face discrimination from several quarters—at banks, in board rooms and from family and professional contacts. Some feel it acutely when they walk into seminars or networking events and find themselves significantly outnumbered by their male counterparts. The knowledge that the odds are stacked against them can undermine the confidence of businesswomen. The resultant lack of clarity and self-belief only adds to the problems of women entrepreneurs, as it sets them up for failure when they actually could have flourished.
Overcoming Challenges Faced By Women Entrepreneurs
Despite such hardships, women in business have come a long way. Many have excelled at entrepreneurship, with the business world gradually starting to acknowledge their contributions. And yet, it’ll take time to solve all the problems of women entrepreneurs. First, gender discrimination must be attacked at the root. Women, too, must have faith in their own abilities, hard work and excellence. Addressing the challenges of women entrepreneurs will require women to cultivate a sense of confidence and work closely with their peers. They must also support fellow businesswomen, actively adopt leadership roles and seek out investors who already support women-led businesses. With the right resources, women entrepreneurs can scale new heights in business.
Become a Leading Woman Entrepreneur
Fulfilling this dream might seem like the most daunting of the challenges of women entrepreneurs. Harappa’s Women’s Leadership Program is designed to help turn that dream into reality. This program takes learners on a transformative leadership journey with world-class faculty who’ll teach powerful new behaviors for women leaders. How to maximize performance, build alliances, deepen collaboration, establish networks and even craft a compelling personal brand are some of the lessons at the heart of the program. With the help of seven crucial outcomes, talented women professionals will be equipped to champion the ambition and success of women colleagues and accelerate their own growth. The Women’s Leadership Program will open doors to a wealth of knowledge on how to tackle all kinds of problems faced by women entrepreneurs!
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