One hundred years ago, the landscape for women entrepreneurs looked quite a bit different. For many decades, women didn’t have the opportunity to start their own businesses. Thanks to equitable access to education and career opportunities, women-owned businesses have become more and more common – but they still have a way to go.

According to the World Economic Forum (WEF), only 28% of new U.S. businesses were started by women in 2019. By 2021, that number had increased to 49%. Why are these numbers so low, when women-owned businesses oftentimes see such success?

Women-owned businesses are more than just numbers; they’re engines of economic progress. Did you know that women-owned businesses generate over $1.9 trillion in revenue annually and create jobs at a rate 2.5 times faster than the national average?

Despite this success, many female entrepreneurs struggle to get their businesses off the ground. That’s because the path of entrepreneurship may be exciting, but it isn’t without challenges. Women entrepreneurs often encounter gender bias, limited access to funding, and the intricate balancing act between work and personal life.

Every successful women-owned business is a testament to the power of resilience, innovation, and collaboration. Women may have more opportunities than they did in the past, but they still lack total equity. Let’s explore the impact of women-owned businesses – and how women can overcome the challenges they face starting up.

The Economic Significance of Women-Owned Businesses

Women-owned businesses have a significant impact on the economy – statistically speaking. According to the National Association of Women Business Owners (NAWBO), women-owned businesses account for nearly 42% of all businesses in the United States.

These businesses generate over $1.9 trillion in revenue annually, underscoring their significant economic impact. Additionally, the same report highlights that women-owned firms create jobs at a rate that’s 2.5 times faster than the national average, providing essential employment opportunities and driving local economies forward.

As if that wasn’t enough: Women-owned businesses in the United States are estimated to contribute over $3 trillion to the economy and create or maintain more than 23 million jobs, according to the National Women’s Business Council. Women-owned businesses are a powerful force of economic power.

It’s not just about a business’ economic output, though. Women-owned businesses play a vital role in addressing the gender pay gap, as well, by providing equitable opportunities for women in the workforce. A study by American Express reports that women-owned businesses employ nearly 9.4 million workers, providing a unique platform for women to earn fair wages and attain leadership positions. This not only contributes to individual financial empowerment but also has a great impact and positive ripple effect on families and communities in the area.

One simply cannot overstate the importance of women-owned businesses, economically or otherwise. Women-owned businesses play a significant role in driving economic growth and innovation as well as bridging gender pay gaps, and fostering community development. To build a more inclusive, resilient and prosperous economy, it’s critical to support women-owned businesses.

Challenges and Opportunities for Women Entrepreneurs

For women entrepreneurs, their business path can be uniquely nuanced.  While challenges undoubtedly exist, there are also abundant opportunities waiting to be seized. Let’s explore the challenges and opportunities for women entrepreneurs.

Challenges

1. Access to Capital

One of the most significant challenges women entrepreneurs encounter is securing adequate funding for their businesses. Studies consistently show that women-owned businesses receive a smaller portion of venture capital funding compared to their male counterparts. Women entrepreneurs should consider angel investors, crowdfunding, or small business loans tailored specifically to women.

2. Gender Bias and Stereotypes

Despite the many advances in today’s society, gender bias and stereotypes remain a very real part of any women entrepreneur’s journey. In a male-dominated business world, women may find themselves facing skepticism about their leadership abilities or business acumen.

The secret? Stay confident and stay focused. Surround yourself with a support system of peers, mentors and advisors who believe in you, your vision and your capabilities.

3. Work-Life Balance

Owning a business is tough for many reasons – and work-life balance is a big part of those reasons, especially if you’re seeking economic growth down the line. No matter your gender, owning your own business can be tricky. After all, when do the hours start and end? It’s essential to establish clear boundaries, delegate tasks, and prioritize self-care. Remember that finding equilibrium and balance is an ongoing journey – and not a one-size-fits-all solution.

Embracing Opportunities

1. Mentorship and expanded networks

Sometimes, it might feel as if you’re alone on your journey – but the truth is, you’re not alone! Leveraging networking opportunities and seeking mentorship can be transformative for women entrepreneurs. Behind every successful woman-owned business, there’s often a network of support that fuels progress.

Connecting with other successful women in your industry can provide valuable insights, guidance, and may even lead to potential collaborations. In addition, these connections can help you feel guided throughout the processes – and leave you feeling happier overall. Supportive networks and communities can help you flourish and thrive! On the other side, Supporting women entrepreneurs can also help build your own sense of confidence and happiness.

2. Embrace diversity

Running a women-owned business comes with its own unique set of perks.  Women entrepreneurs often bring diverse perspectives to the table, which can be a powerful asset in today’s global business landscape. Use your unique viewpoint as a competitive advantage to innovate and capture new markets. We’ll dive into this more next.

3. Join the digital transformation

Times are changing – and women-owned businesses have a unique opportunity to harness this new digital transformation. E-commerce platforms, content marketing, social media, and online marketing…All these platforms offer cost-effective ways to reach a new global audience. Online marketing is the future, after all. Building a strong online presence can level the playing field and expand your business’s reach.

The Case for Diversity and Inclusion

In an ever-evolving global economy, women-owned businesses are taking center stage, making substantial contributions that ripple far beyond the business world. More often than not, female entrepreneurs are not only building profitable ventures, but also nurturing job opportunities, driving innovation, and fostering diversity within industries.

Research from McKinsey & Company reveals that companies with diverse executive boards are 21% more likely to outperform their peers in profitability. Women entrepreneurs, with their unique perspectives, bring a wealth of creative thinking to industries, leading to the development of groundbreaking products, services, and processes.

The impacts can be far-reaching. Women-owned businesses also play a pivotal role in increasing diversity within industries that have historically been male-dominated. The technology sector may be one of the most prominent examples. Innovative women-led startups have taken the IT section by storm, challenging traditional norms.

But it’s not just tech. This trend extends to various sectors from finance to healthcare to manufacturing. By breaking down gender barriers, women entrepreneurs inspire future generations, creating a more inclusive and dynamic workforce.

Collaborative Initiatives and Policies for Women’s Economic Empowerment

In an era of interconnectedness, collective action is a driving force behind reshaping the business landscape to be more inclusive and equitable. Let’s shine a light on initiatives and policies aimed at fostering economic growth for women entrepreneurs and women-owned businesses.

• WEConnect International: The global network WEConnect International connects women-owned businesses to multinational corporate buyers. Leverage the purchasing power of major corporations to create your own new opportunities and better access markets and scale your businesses on a global scale.
• #ChooseWOMEN: Mastercard’s #ChooseWOMEN campaign is all about driving an increase of $25 billion in purchasing from women-owned businesses by 2025. This initiative not only empowers women entrepreneurs financially but also recognizes the pivotal role they play in driving economic growth.
• Women’s Entrepreneurship Development: Organizations like the International Finance Corporation (IFC) are driving initiatives that provide women entrepreneurs with training, mentorship, and access to networks. IFC’s “SheWorks” program has enabled over 200,000 women to connect with business opportunities and essential resources.
• Empowering Women through Technology: Technology is a notoriously male-led space. Collaborations between tech companies and NGOs are facilitating digital skills training for women. Google’s “Women Will” initiative, in partnership with organizations like Technovation, offers resources to help women embrace technology and bridge the digital gender gap.

By uniting efforts, governments, organizations, and individuals amplify their influence and create a ripple effect that extends beyond the business sphere. Together, we can build a more diverse, equitable, and vibrant economic landscape for generations to come. It’s that simple.