Is Starting a New Business more Difficult as a Woman?

Whether or not women face inequality in the business world is a controversial topic. The data undoubtedly shows that women only represent 5% of the fortune 500 CEOs. Some argue this is because of innate gender differences, which of course, there are biological differences but it’s unclear just how big those differences are and to what extent choice accounts for those CEO numbers.

The problem is that this is coming at it from the wrong angle. It doesn’t matter what share of something is women, just like it doesn’t matter how many men are dental assistants. Not everything has to be split 50/50. What does matter though is that, for the women that do want to make it in the business world, is they face some obstacles that men do not.

The first obstacle is the psychological bias against women in business. According to a Telegraph Poll, two this of 750 female business founders felt that they were not taken seriously when pitching to investors. They felt although they had different treatment compared to their male counterparts.

Unsurprisingly, there’s no evidence that female-run businesses are worse performing than male-run businesses (some actually found the opposite, that female-run businesses are more profitable on average). Thus, not only is such bias costing female business owners but it’s costing the investors themselves, too.

This has implications on the next wave of female business owners. Without a thriving pool of female-run businesses, the next generation of females have fewer mentors. Sure, they can have male mentors, but it’s important to have women who have overcome the same discrimination that they’re receiving for inspiration. It’s also led to women being more afraid of failure. Vistaprint reported that British female business owners find it more difficult to overcome failure (66% compared to the male’s 55%).

Another obstacle is that childcare and growing a business are two very difficult things to do side-by-side, and usually women are expected to be the primary carer. This could be looked at as a disadvantage or even bias in multiple ways, but the lack of free childcare is also an issue here too.

Not all Discrimination is Created Equally

Discrimination from customers isn’t so prominent, because they care mostly about the product or service itself. However, stakeholders, shareholders and such can impose harsher judgements. Karren Brady, Vice Chairman of London soccer team West Ham, is a prime example of describing the sexism received in the workplace, but also has to work harder as a CEO because of her gender.

The biggest obstacles come when trying to gain funding, as touched on earlier. This is where discrimination is at its peak, because you’re trying to convince male-dominated investment angels that you’re a leader and ready for hardship. Whether the chauvinism comes from the unfair assumption that the business will become second the family or some other stereotypes isn’t the headline point here – women have to over perform in order to get the same level of respect compared to men.

Of course, there are always business loan companies that bear no such sexism, which is why many female business owners may prefer raising finance through debt as opposed to releasing equity. It’s simpler to deal with less people, as there’s then less chance of being unfairly treated.

Of course, women actually have some advantages inherent to them. Like stated at the beginning, it’s about trying to make 50% of CEOs female, it’s about recognising female business owners for the positive force in the world that they actually are. Women excel, generally, in soft skills that are hugely important in business leadership.

Furthermore, females make up at least 85% of consumer purchases. Women know what women want more than men do. Women contribute over $20 trillion in consumer spending each year, so it’s absurd to neglect such insight. You still have so many situations where female-read fashion magazines are being owned and run solely by men that it’s disturbing.

Thankfully, things are slowly getting better. We’re far away from ridding the business world of subconscious bias, but as wages and funding are starting to become more equal, we will surely see further rises in female entrepreneurship.