We’ve seen our fair share of excellent leaders in the c-suite: from Mary Barra at GM, to Sheryl Sandberg at Facebook, to Indra Nooyi at PepsiCo, to name a few. But for every well-known Fortune 500 c-suite dweller out there, there are plenty of others working just as hard and making things happen.
Despite the rise of women entrepreneurs, the gender gap in entrepreneurship remains wide -- even though women entrepreneurship is recognized as a key source of employment creation and innovation.
In fact, a McKinsey study published late last year estimated that $12 trillion could be added to the global GDP by 2025 by advancing women entrepreneurship. I don’t need to be the head of the IMF to tell you that those are great numbers.
So, what’s stopping women from joining the entrepreneurial ranks? Here are two pretty big obstacles that can make or break someone’s entrepreneurial dream:
Fear of Failure
“There’s nothing to fear but fear itself” is a famous quote by our 32nd president, and while Franklin D. Roosevelt didn’t say this with entrepreneurs in mind, fear still rings true as one of the main reasons women cite for not becoming entrepreneurs.
People are afraid of failure, and that’s okay: Fears, about the unknown, about failure, are incredible motivators to make you run the other way. But stay you must. Remember, a healthy dose of fear can also be a great motivator. It will make you take more calculated risks -- which usually end up paying off -- and fewer stupid, impulsive mistakes.
In many countries, including the United States, women appear less prone to take risks when it comes to their own business; however, in countries like Mexico, Chile and South Africa, female entrepreneurs are more willing to take risks (For a graph illustrating this reality, see the Organization for Economic Cooperation and Development).
I’ve had my own fair share of failures -- I've written before about my (not-so) brilliant idea about my (now-defunct) pheasant farm, but I’ve overcome those obstacles. In fact, I’ve steamrolled most of them. While a small dose of fear is a healthy thing, in my humble opinion, you shouldn't let fear stop you from forging ahead. My advice to women wanting to become entrepreneurs is: Keep it simple. Remember, even if you fail, no one will die. Be fearless, be bold!
Access to capital
Entrepreneurship may be a pathway to wealth for some; however, many who are self-employed struggle with relatively low incomes, which means fewer opportunities to accumulate savings, and financial debt if the business fails.
We know that money is one of the protagonists of every entrepreneurial story, but the reality is that not everyone has easy access to capital. They say dreaming is free, but turning that dream into a reality is a costly endeavor. Around the world, there is a huge gender gap in regards to access to funds and training.
A little closer to home, here in New York City, there is a first-of-its-kind model created to empower women to become entrepreneurs; it's called WE NYC. The New York City Department of Small Business Services (SBS) has identified women’s entrepreneurship as a key driver of the economic development of the city.
According to the National Women’s Business Council, as many as 80 percent of women entrepreneurs rely on personal savings, and only 17 percent seek business loans. Women also have lower loan approval rates (15 to 20 percent lower than men's); and women entrepreneurs account for only 4 percent of all conventional small business loans -- roughly $1 out of every $23 loaned.
Limited access to funds only widens the gap. We must do better if we’re going to welcome more female entrepreneurs into our midst. There’s plenty of room for everyone to join the fray. There’s always a need (and a niche) for something new and innovative with the power to change someone’s life.
Now that I’ve stated two of the main obstacles facing women entrepreneurs, what can we do to make entrepreneurship more inclusive and diverse?
Reach back and pull the person behind you up the ladder, instead of slamming the door in her face. We need to become mentors, networking facilitators and role models, especially in underserved communities. Not to mention that we need to take our fellow entrepreneurs seriously. Remember how much it annoyed you back when people thought of your ideas as “pet projects”?
For you, they were (and are) serious business ventures, so why wouldn’t that be the case for someone else? Your dreams aren’t more important (or less) than anyone else’s, and throughout my career I’ve found that whenever you stop along the way to help someone, it comes back tenfold. At the very least, you get some good karma points. And, it’s the right thing to do.
There’s no substitute for hard work, and we, as entrepreneurs, know that. I’m not advocating making things easier for anyone or lowering the bar – either you’re good enough or you’re not. But let’s not let our ego and insecurity get in the way of the next big thing.
Nowadays, women make up 40 percent or more of MBA students at a variety of Ivy League schools, so we can afford to learn a thing or two from these up-and-coming entrepreneurs -- male or female. With March being Women’s History Month, let’s reflect not just on the progress being made, but on the progress we still need to make. And remember, sometimes the best man for the job is . . . a woman!