Forming the right team is critical in business, especially for start-ups. Over the years, most businesses have been prejudiced in their workforce selection as they fit only men in management and relegate women to menial and insignificant roles. However, in recent times women have risen to occupy managerial roles and they have been very effective at it.
We now have women-owned start-ups rising except for some constraints which affect their growth. Most times, these constraints depend on the region of the start-up, hence, its is advisable to set up women owned businesses in environments favorable to it.
In 2020, during the covid-19 outbreak, several firms incurred losses, the female owned businesses were hit hard and consequently there was a significant drop in financing. Though not everyone’s firm suffered equally, the share of “dollar to women founders” fell drastically by 0.5% from 2019 to 2020. Investors generally have more faith in men-owned businesses than women because they believe men have been in the business of managing enterprises and so they are skilled. Also, there’s an unfounded belief that women are prone to exaggerate their estimates when given opportunity to start a business. But we believe that female financing would get better if there is an increase in female investors.
Entrepreneurs typically do not start a business until they are in their late 20s, about the same time as women begin their families, and combining both responsibilities can be a challenging feat. Regardless of the possible constraints to supporting women, there are still tangible reasons to invest in women-owned start-ups and they include:
- Start-ups are delicate, they need vigour fuelled into the business to keep through the growing stage which is usually not an easy one. By nature, the emotional IQ of women is such that it is resilient. Women are meticulous beings and have the ability to multitask. These qualities keep businesses going and productive; investors are usually drawn to progressive start-ups.
- As the business progresses, operations begin to level up, ideas start to take root, some even take a new turn. This calls for flexibility and women are wired to be adaptable. Apparently, it fits the gender personality and such business would thrive in their
- Women are good at yielding returns for a business as researches have proved it that female founding businesses turn in more revenue than male founding businesses. According to research, women have better understanding of unmet needs and so know how to channel the products and services to the right target of a business opening up huge business prospects. Other researches back this up that women-owned businesses return twice as much as the dollar invested, companies with female leadership have a nearly 3% greater return on equity.
- On the argument of balancing work and family life, most women entrepreneurs have found solutions to balancing the responsibilities from these ends. And they tend to give their best to ensure a great return on investment.
In conclusion, gender disparity should not be a barrier to harnessing the best a business can while in operation because when a business thrives, it contributes to the development of the economy.