More Australian women are starting their own businesses but they remain under represented as entrepreneurs with many challenges holding them back.
The latest figures from the Australian Bureau of Statistics show women account for 33% (504,838) of all business owner managers, up from 31% in 20061.
The ABS notes there has been a 46% increase in the number of women business operators over the past 20 years and the majority of these women are aged between 40-54 years2.
As a female entreprenueur myself, and a journalist, some of the biggest challenges I've experienced, and have read about when it comes to women as start-up founders, relate to the following:
- funding difficulties
- not having a strong business model
- having limited business networks
- multi-tasking overload
- not having the right protections in place
- not thinking about your personal financial security.
Research suggests that women are likely to face more challenges than men and are even less likely to stay in their own business after the start-up phase. Census data shows that just under half (49%) of women who had been in business in 2006 were also still in business in 2011, compared with 61% of men3.
To help women overcome many of the common challenges they face, here are some tips that may be useful.
Where to go for venture capital funding
In starting a business there are so many challenges that aren't gender specific. But when it comes to securing investor funding, there is less managed money going to female start-ups than males.
According to Pitchbook, venture capital (VC) funding for female-only business start-ups stalled at 2.3% of $US130 billion in 20184. Whether this is due to competitive forces or perhaps unconscious bias in a predominately male-dominated VC space is unclear. But there is hope that this finding will improve.
Over the last two years in Australia we have seen a massive increase in VC funds and angel networks keen to support women in business. Some of those businesses are Blackbird, Air tree, Square Peg, Reinventure, Main Sequence Ventures and Scale.
If you need help with developing your pitch for funding, programs are also being run by the following organisations to help women—Springboard, SheStarts and BlueChilli.
Ask for the money!
Whether you're looking to pitch to a VC fund, private equity, business or potential sponsors, the key is to be clear on the following:
- Your ‘Why' or your purpose. This is what drives you and why you got into business and what you hope to achieve.
- Your business model - know the numbers
If you're going to ask for money to support your business growth, then it's really important to be clear on your own numbers and set up your financial models in a way that makes sense. Investors want to understand the reason you started a business and that you have a viable business model that's likely to see the business grow in revenue and future profits
Grow your networks
Female business owners tend to have much smaller networks than males, according to the 2010 GEM Women's Report, but in this day and age, there is really no reason to hold back on making new connections.
Social media and networking events - which don't have to be female-focused - are really useful ways to grow your existing network.
The key is developing strategic networks. This means connecting with people who can add value to your thinking, are supportive rather than negative and who may even want to collaborate or partner. They may also be able to connect you with the right people who can help you grow.
Consider searching social media and Google for networks and events that relate to your line of business and where it is that you want to go.
Don't be afraid of knockbacks
Being rejected in business, whether through the process of securing investor funding or in growing your company, is a big part of the journey. But once you understand that rejection is key to learning, then you can take advantage of your most powerful opportunity to grow.
Next time it happens, rather than just accept a rejection with a 'that's okay,' consider asking the person or business questions around:
- Why you were rejected?
- What could you have been done better?
Try to get three reasons for the rejection because at least then you can work on those issues, and this gives you an opportunity to go back to the investor or potential client once you've addressed them.
Manage multi-tasking overload
Start-up business owners often wear so many hats and running the day-to-day operations can leave little time to work on the business itself.
While women can be particularly good at multi-tasking, they can also overburden themselves with too many jobs at once. When you know this is the case consider the following:
- Improve your time management. Where possible allocate a certain amount of time per task and try to stick to it.
- Work on related or complementary tasks at once to maximise your time.
- Write a list and make it visible to stay on track.
- Be realistic about what you have to achieve in a day.
- Set aside a certain amount of time or even a day to work just on the business, rather than the operations.
- Outsource. Cost permitting, it may be possible for you to outsource certain tasks where you can and increase your overall productivity.
Talk through and test your ideas
People tend to hold on to ideas for fear of other people stealing them. But success isn't all about the idea, it's about the execution of the idea. So if you have a business idea, tell people about it and consider their feedback because it will help you to formulate the execution.
It's also wise to create a low-cost minimum viable product (MVP) and test it with customers for additional feedback on your idea. Having an MVP that's been tested is also likely to be important to help you secure investor funding. So ask for feedback and be robust enough to take that on and make changes to improve your business model.
Protect your business
As part of running a business it's critical you have the right legal agreements, insurances and other business protections. Three simple checks to consider include the following;
- What insurances do you have in place if a customer/client/partner were to sue you for damages?
- What legal disclaimers, contracts and terms of conditions are in place and are they up-to-date?
- Do you own your business name beyond the website URL? And is it registered through the appropriate channels?
In additional to this, you might also have a business where you need other intellectual property (IP) protections such as trademarks or patents. IP Australia is the place to go for some quick facts and applications.
One of the most common things we see among female entrepreneurs is a lack of planning for their retirement.
According to the most recent data by the ABS from 2007, women business operators were less likely than women who were employees to have superannuation coverage (76% compared with 93%). And less than half (45%) were currently making contributions into their superannuation accounts.
Putting savings aside for contingencies in a personal bank account and in your superannuation is important because life doesn't always go to plan.
Bianca Hartge-Hazelman is a columnist on women's money matters and is the founding publisher of Financy and the Financy Women's Index. This article represents the views of the author only and does not necessarily reflect the views of AMP.
1 Australian Bureau of Statistics, 2071.0 – Census of Population and Housing: Reflecting Australia – Stories from the Census, 2016
2 Australian Bureau of Statistics, A profile of Australian women in business
3 Australian Bureau of Statistics, A profile of Australian women in business
4 PitchBook, The VC Female Founders Dashboard
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