Contributed by Dennis Hung
The landscape of the modern-day workplace has evolved over the years. No longer are they gender-biased towards women. According to The 2017 State of Women-Owned Businesses Report by American Express, 43 percent of all U.S. businesses with 50 to 99 employees are run by women. Like their male counterparts, these empowered female entrepreneurs must secure funding to get their business idea up and running. The good news, however, is that women often have an easier time at raising capital than men for the following reasons.
They Are Better at Conveying Social Impact
Investors today pay close attention to the social impact of an entrepreneur’s business. If an entrepreneur demonstrates that his or her business will have a positive impact on society, investors will feel more confident funding their idea. According to research cited by the Harvard Business Review (HBR), women business owners who effectively convey their social mission are more likely to secure funding than male business owners. Researchers found that women are judged differently than men in this regard, with investors scrutinizing their social impact and using that information to determine their candidacy for funding.
They Ask for Less Money
Another reason women entrepreneurs are more likely to get funding is because they ask for less money than men. According to a study conducted by the lending website Fundera, women entrepreneurs ask for an average of $89,000 to fund their business while men entrepreneurs ask for an average of $124,500. The $34,500 difference encourages lenders to provide loans to women more frequently than men.
They Have Access to Special Resources
Women entrepreneurs have access to special business resources that aren’t available to their male counterparts.
1. U.S. Small Business Administration
The U.S. Small Business Administration (SBA) offers an online portal for women-owned businesses. Here, women entrepreneurs can access training tools, educational seminars and even funding information, all of which can help them succeed in the otherwise competitive marketplace.
2. The US Women’s Chamber of Commerce
Women entrepreneurs can take advantage of the U.S. Women’s Chamber of Commerce (USWCC). Originally launched 2001, the USWCC is designed to strengthen growth opportunities for women-led businesses. Since its inception, more than a half-million women entrepreneurs have joined the USWCC, using the organization to network with other like-minded entrepreneurs and professional vendors. Some of the USWCC’s members include banks and other financial institutions, making this an invaluable resource for women entrepreneurs seeking funding for their business.
3. Grants for Women Entrepreneurs
There are many ways for entrepreneurs to fund their business, the two most common being debt capital and equity capital. Debt capital involves taking debt in exchange for money while equity capital involves selling stock to investors. A third funding option, however, is a grant, which is essentially free money that’s given to applicable entrepreneurs for a specific purpose.
Women entrepreneurs have access to more of these grants than men. Some of the most popular grants for women business owners include the Eileen Fisher Women-Owned Business Grant Program, The Amber Grant, Open Meadows Foundation, Zions Bank Smart Women Grants and the Walmart Global Women’s Economic Empowerment Initiative.
How to Get Started
Funding is just one step in launching a women-owned business. Female entrepreneurs must carefully plan their business strategy by defining their target market and promoting the right products or services to their audience. Otherwise, they’ll struggle to turn a profit and pay back any loans or debt they may have incurred.
One way for entrepreneurs to match the right products or services with the right prospects is to use a product recommendation engine. Also known as predictive offers, product recommendation engines provide customized marketing messages to prospects and customers based on historical data and insights.
As you can see, women entrepreneurs have the upper hand when seeking funding.
Dennis Hung is a writer of all things business. He’s an expert in sales planning, strategy, pricing, and product Marketing. He has extensive knowledge in organic-only SEO, social media marketing, lead generation, and management consulting.