Empowering Her Future: Breaking Barriers for Young Women Entrepreneurs
If you look up the words “successful entrepreneur” online, a list of the top 15 influential business owners of all time comes up. Oprah Winfrey and Arianna Huffington are the only two women on this list. A large part of the global economy is created through entrepreneurship and the innovative ideas they create through their businesses are imperative to our success as a society.
Although women make up significant contributions to the global economy, they are substantially underrepresented in businesses of all sizes across the world. Educators, policymakers and NGOs are all interested in understanding the barriers women experience when to entrepreneurship. As parents of young girls, you want the absolute best for them in every way. That includes helping them reach their full potential whether that be as business owners or major contributors to the world stage.
So why do so few women pursue entrepreneurship? Research shows that the three main barriers to women's progression into micro and small business ownership are a lack of self-confidence in business success, lack of external capital and underestimating the value of networking.
Lack of Confidence in Business Success
A lack of confidence is the single biggest factor that deters women when it comes time to start a business. By grade 7, young girls have already begun to internalize social stereotypes that negatively affect their confidence and self-efficacy. This loss of belief in themselves extends to entrepreneurship as well as STEM studies. A study conducted by the University of Otago in New Zealand showed that an overwhelming majority of women had little confidence in their business ideas and many felt they could only do it successfully with a business partner.
In addition to that, most women entrepreneurs are often motivated by push factors meaning their motivation to be self-employed is often a product of necessity. Young women are often so daunted by the idea that their business may fail, that entrepreneurship is seen as a last resort as opposed to a viable career option.
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2. Lack of capital
When a brilliant idea first comes to mind, there is a burst of motivation and the clouds seem to rain inspiration every day. At some point between being inspired and becoming an entrepreneur, young women lose confidence in their own businesses. Many young women don’t take ideas to product development and one of the main reasons is a lack of capital. Few young women are confident enough in their ideas to request money from financial institutions and it creates many barriers along the entrepreneurial journey.
Borrowing capacity is an important factor in an entrepreneur's plan, however, women are more likely to rely on personal wealth rather than external funding sources. This creates a system where even when young women pursue business opportunities, they struggle to grow their businesses far beyond the start-up stage. It also increases the fear of failure because personal finances are on the line, making young women more risk-averse in their start-up decisions.
This means financial literacy is of huge importance for all young women. It is important for those who may one day be interested in being business owners as well as young girls who have no intention of being entrepreneurs. So if you notice that your little girl is ambitious or innovative , giving her a sense of how money works is imperative. Teach her about the basics of finances and later on the process of gaining capital may not be so daunting. Helping your daughter budget and be financially literate will help her understand her options when starting a business.
3. Underestimating Their Networks
One of the more surprising barriers to the success of women entrepreneurs is the underutilization of their personal networks. Building a network of close friends, mentors and role models is often invaluable as young women are able to seek guidance and advice which in turn increases their confidence in decision-making. Mentors can provide insights, share their experiences, and offer valuable connections and resources to help young women navigate the entrepreneurial journey.
However, young women tend to lean away from utilizing their contacts as they believe that if they fail, they will not be given a second chance at business opportunities. It is important to expose young girls to role models that they can trust and look up to for advice. Studies show that young girls thrive when they feel a sense of community through shared interests and goals. So as your little girl grows older, let her make friends and join in the parties and sign up for all the science fairs!
As she meets people who are like-minded, she will build a network that may one day inspire confidence in her own business ventures.
Confidence is Key!
The most common factor among each of these barriers is confidence in oneself. Teach your daughter to trust her instincts and be confident in her ability to try new things. This one skill set will help her in all aspects of her entrepreneurial journey.
References:
Chen, C., Greene, P. and Crick, A. (1998), “Does entrepreneurial self-efficacy distinguish entrepreneurs from managers?”, Journal of Business Venturing, Vol. 13 No. 4, pp. 295-316.
Kirkwood, Jodyanne. “Is a Lack of Self-Confidence Hindering Women Entrepreneurs?” International journal of gender and entrepreneurship 1.2 (2009): 118–133. Web.