AddThis Feed Button
AddThis Social Bookmark Button
Free Newsletter Signup


According to a report conducted by the Kauffman Foundation, supporting women-led businesses could have a huge positive impact on the economic growth of the U.S. Over the last few decades, more women have started to enter the workforce, and they began to outshine males in degrees. This led to women helping the U.S. economy by creating huge economic gains.

However, many have said that the annual economic growth of 3 percent has slowed down with the Kaufmann report suggesting that this could hit a low of 2 percent in the next few years. What’s the answer to boosting this growth again? Women.

Room for Growth

In the U.S., a third of businesses are owned by women but these tend to have fewer employees and lower revenues. And within high-growth firms, founders are made up of less than 10 percent of women. However, due to this huge under-representation, women are provided with great opportunity for improvement and growth.

Speaking about the findings, the author of the report, Alicia Robb, said that there could be a significant impact on the economy through employment, payroll and revenue if more women are given the opportunity to take part in entrepreneurialism, particularly in the high-growth area. However, in order to encourage women entrepreneurs, it’s vital that people understand what factors could be holding them back.

Learning the Art of Failing

There are hundreds of success stories out there, in the media, on Facebook and in Google searches. However, many women entrepreneurs put their success down to the fact they learned about failure. Why? Because they’ve learned from their mistakes to help fuel their next venture, and they’re more likely to do this than their male counterparts, the report suggests.

But, compared to men, women aren’t big risk takers, which means they aren’t making these mistakes from which they can learn from. Robb comments that failure is taken more personally by women, in most cases. That’s why it’s important that women realize that to be an entrepreneur you have to take risks, even if they don’t always work out. To launch and grow a business, there are going to be failures and errors, and you may hit 90 no’s before you hit 10 yes’s but this is all part of parcel of the entrepreneurial journey.

Hearing More from Role Models

The report also suggested that women need inspiring by more role models to encourage them to start up their own business and take this to the next level. An entrepreneur’s success relies on mentorship, Robb says, and due to the lack of women leaders who can provide women with advice and encouragement, this can be a huge disadvantage.

Robb feels as though showing women what they can achieve gives them the opportunity to see that they can accomplish great things and that they are allowed to dream big. She suggested that to solve this problem, it should be partly down to the encouragement for more women to invest in companies as well as starting their own.

Reducing the Financial Gap

Even though 14 percent of women had venture capital funding and 31 percent had angel investors, 80 percent still had to rely on their own savings as their main source of funding, which makes it even harder for women to save for their business ideas.

As they require the funding to get their feet off the ground to fund things like technology marketing solutions, finances play a huge role in the success of a business. And as vast amounts of external capital are required for growth-orientated companies, this explains why getting to the next level is proving too difficult for many women-owned firms.

Various studies have demonstrated how significantly smaller amounts of outside equity and financial capital are being invested in women-owned companies as they grow. In the Kauffman study, nearly a third of these types of firms had one employee – the owner. Just 15 percent had over five employees.

By providing women with better access to venture capital, bank and angel financing, Robb believes this will encourage more growth. Babson College’s study found that of the $50.8 billion invested from 2011 to 2013 by venture capitalists, just 3 percent went to a company who had a female CEO.

For future economic growth, it makes sense to tap into this grossly underused resource of female entrepreneurs. However, in order to do this, there are a number of issues that need tackling first to prevent these women from being held back from achieving their successes.

About the Author:

Christopher Hartley started his business when he was 19. Now an angel investor, he also runs business courses and gives career talks at local schools alongside his article writing.



Comments are closed.

Have an expert opinion on issues entrepreneurs and small business owners face everyday? Join the Experts Network and share your expertise with the community!

The new GE Experts Network is inviting seasoned entrepreneurs and small business owners to come on board and contribute small business advice to our community of aspiring entrepreneurs. If you have an effective way of generating sales or you know how to use social networking to connect with your customers, join us in providing wider entrepreneurial content that would benefit small business owners worldwide.

Click Here to Learn More >>

Free BIZNESS Newsletter
Ever wanted to be the CEO of your very own Starbucks or Fire your boss and be your own boss? Now you can, with BIZNESS! - the free weekly business newsletter about new business ideas, opportunities and innovations from around the world. More than just new business trends, BIZNESS! helps the aspiring entrepreneur (you!) with small business advice, business tips, and entrepreneur resources and opportunities.

   Subscribe for free now!    Subscribe now

  Meet Our GE Network Experts!

Meet Our GE Network Experts!

Recent Comments

About is a small business blog dedicated to providing business advice and resources to our community of aspiring entrepreneurs. Our specially hand-picked panel of Network experts regularly contribute entrepreneurial content and professional tips for small business owners worldwide.