Biggest Obstacle for Women Owned Business? Financing
A recent survey by the Business and Professional Women’s Foundation shows that financing is one of the biggest obstacles faced by women who own small businesses.
The Foundation, which started in 1919 and is now a 501(c)(3) research and education organization, released “Ready to Grow: A Snapshot of Women Small Business Owners” from research compiled in May.
The 10-question survey was completed by 478 women, all current or former small business owners or entrepreneurs. Here’s more on what the research found:
- 33.5 percent of respondents were between 56 and 65; 28 were between 46 and 55; 16.3 were between 36 and 45.
- 62.1 percent were white; 12.6 percent black; 2.3 percent Asian; 2.1 percent Hispanic.
- 8.8 percent were veterans; 2.7 percent were military spouses.
- 17.6 percent have owned multiple businesses.
- 62 percent were sole proprietors, and 31 percent had one to four employees.
- 20 percent earn less than $5,000 annually from their small business; 15 percent earn between $100,000 and $249,000.
- Financing, financing, financing: The majority of the women — 65 percent — do not have an outside source of financing, meaning bank loans, grants, venture capital or credit union money. Just 8.6 percent used bank loans, and 1.7 percent used venture capital. That means business owners are relying on credit cards, retirement funds or other sources to keep their businesses afloat. And 26 percent say financing is a major hurdle to start or improve a new business.
- Mentoring: Half of the responders expressed interest in having a mentor, and 37 percent have served as a mentor.
- Technology: Keeping up with technological advancements is important to 48 percent of the responders, and 22.6 percent say lagging behind holds their business back.
The responders desire to gain personal job satisfaction (50 percent), create full-time income through their business (46 percent) and gain greater flexibility (43 percent).
The report had three recommendations for women struggling to establish their businesses:
- Explore all financing options, including SBA grants and bank loans.
- Veterans should take advantage of available assistance. Only 0.8 percent of the veterans who responded used military loans or grants for small businesses.
- Find and use a good mentor, and seek technology education.
The Small Business Administration has compiled a list of resources that can help women business owners. Here’s a look:
- National Women’s Business Council: Independent adviser to the president, Congress and the Small Business Administration.
- Make Mine a Million: Where “boldly creative women help each other turn their dreams into a reality.”
- Women Impacting Public Policy: A nonpartisan group that advocates for women-owned businesses.
- Association of Women Business Centers: The group aims to strengthen a “global network of women’s business centers to advance the growth and success of women business owners.”
- National Association of Women Business Owners: The organization represents “the interests of all women entrepreneurs across all industries.”
- National Association for Female Executives: The group provides “education, networking, and public advocacy to empower its members to achieve career success and financial security.”
- SCORE: The nonprofit association provides mentoring, counseling, workshops, webinars and business tips.
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