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Why fewer women are starting businesses and how to reverse it
A recent study suggests fewer women are starting businesses. Here's what can be done to reverse the trend. - photo by Jeff Wuorio
Media headlines routinely trumpet the era of the entrepreneur.

Lately, that attention tilts more toward the males, who take new ideas and turn them into viable commercial enterprises.

Recent data indicates the number of women starting new businesses has leveled off considerably. And, if true, there are plenty of reasons why, ranging from various financial issues to age-old societal definitions of personal priorities.

Women, in general, tend to put themselves and their dreams last. Family and family stability comes first, said small business coach Lisa Baker-King. In uncertain and unstable economic and social times like we are currently navigating, the world of small business is more costly and more risky than ever before.

But women who have made the choice to be on in the entrepreneurial front lines and ended up as business owners, have established strategies and practices to other female entrepreneurs can employ when they want to take that step.

The gender gap

According to the 2015 Kauffman Index, 63.2 percent of the people starting businesses in 2014 were men, compared with women at 36.8 percent. That marks the lowest level of female entrepreneurs since 2008 (36.3 percent) and was about 7 percent lower than 1996, when 43.7 percent of entrepreneurs were women.

Nor is it merely an issue of the number of women entrepreneurs. According to data from the Corporation for Enterprise Development, men nationwide not only owned more businesses than women, male-owned businesses, on average, were also valued at three times that of businesses owned by women.

Women-owned businesses make less money than male-owned businesses and we have less access to capital, said Katrina Schenfield, founder of Katixon Skincare.

Others don't take the statistical data too literally. Joseph Camberato, president of National Business Capital, a niche business financing company, noted that any financing beyond initial start-up costs can skew the definition of who really owns a business.

When it is up and running and requires additional working capital, the woman owner may partner with a financing consortium or male partner or partners," he said. "While the enterprise is still woman-run, it may no longer be entirely woman-owned and therefore accounts to some extent for what appears on the surface to be a declining metric.

Sarah Thebaud, assistant professor of sociology at the University of California, Santa Barbara, wrote in The Conversation about research suggesting many people are hesitant to provide financial support to women hoping to launch a business.

On an aggregate level, this dynamic suggests countless ideas that could have blossomed into successful businesses and benefited the economy never did, simply because the individuals who pitched them werent the right gender, she wrote.

Mansi Singhal, co-founder of qplum, a digital investment platform, said that lack of support goes beyond questions of finance.

Most women lack the support system to feed the fervor needed to start a business, she said. That includes social support from family and friends, funding support from financing or savings and community support from professional contacts in the industry.

More resources, interaction

One solution to the ongoing challenges faced by the female entrepreneurial community is greater access to resources, primarily financial.

The government has stepped up, to a certain extent. Effective October 2015, federal agencies began allowing contracting officers to award sole source contracts buying preferences to women-owned companies whose industries have been underrepresented.

A more receptive environment at the local level would also boost womens interest in pursuing necessary funding.

Funding can be the game-changing factor for women. We need banks and other financiers to encourage funding for small businesses being started by women, said Singhal. If they have funding in place for their business idea, it can be a huge encouragement for women. Additionally, it can help them in gathering the required social support needed from family and friends."

Another commonly expressed obstacle is a lack of female entrepreneurial role models.

There are a lot of female business owners, but many of them are either behind the scenes or unheard from. I've had role models that I look up to, but often from afar, said Kenia Costanzo of

If female role models can be few and far between, some said the obvious solution was to look to men for positive examples.

This may sound somewhat controversial, but I think we should learn from men, said Schenfield. I think that society has molded women to be risk-adverse, subservient and take a lesser role as far as business goes. Women need to learn from men how to effectively apply for bank loans and how to pitch venture capital and angel investors. I think a lot of women organizations need men on their boards to tell us where we're going wrong. If the men are getting more business and creating the rules for business, then we need to learn from them what the rules are and how to win.

Shift in attitudes

Pragmatic steps aside, women entrepreneurs also consistently pinpointed longstanding attitudes toward women in business as a global problem stifling growth. Noted Rachel Maxwell, founder of Maxwell Biometrics, which produces fingerprint-coded door locks: I hate to say it, but women in technology are still seen as idiots.

One strategy: Consider leveraging differences and not trying to blend in.

While it can be difficult to be the only woman in the room, there is great power that comes with having a voice that is different from most peoples, said Amber D. Scott of Outlier Solutions Inc., a business and operations consulting concern. Ive found that rather than trying to be, sound or argue like one the guys, its much more effective to listen to the conversation without feeling compelled to interject until I truly have something to say.

But, added Scott, boosting women as entrepreneurs mandates a core shift in attitude and focus on everyones part.

It will take time and changes to the socialization of both men and women. It will take socializing people to look at one another as equal participants in education and business processes from Day One, she said. I don't think the reasons for the statistics are a mystery. The real mystery is why we don't do more to change it.
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