3 Reasons Women-Owned Businesses Fail to Grow by Kim Kiyosaki

3 Reasons Women-Owned Businesses Fail to Grow

How to build the confidence, support, and capital to succeed

You probably know quite a few women who own their own businesses, right? After all, as of 2018, there are 12.3 million of them in the United States. In fact, women own four out of every 10 businesses in the U.S. — woohoo!

But how many of the women you know who own businesses have grown them into multi-million-dollar corporations? Maybe one? But probably zero, which is no surprise given the fact that 88% of women-owned businesses generate less than $100,000 in revenue.

The fact of the matter is, female entrepreneurs face an unfair number of obstacles purely based on our gender — and these obstacles make it harder for women-owned businesses to succeed, let alone thrive.

While some would say that the deck is stacked against us from birth, I’m going to argue that there are also some things we women do to make the path to entrepreneurship and owning a multimillion-dollar business harder on ourselves. Let’s explore the reasons why women may have a more difficult climb up the ladder of success than men — and how we can turn things around:

  1. Limited access to funding

    We all know money makes the world go ‘round, yet more women try to bootstrap their own entrepreneurial endeavors than men. Studies show that only 25% of women were likely to seek financing for their businesses, compared to 34% of men.

    Remember everything I’ve taught you about how to invest using other people’s money (OPM)? Sure, it may feel “easier” to dip into your own savings account for the capital you need to start your business endeavor, but why should you finance it yourself?

    And when women do ask for financing, they often underestimate how much they’ll need — perhaps because they are afraid of asking for a larger number and being rejected.

    Sadly, according to a study by Fundera, women receive fewer, smaller loans for higher interest rates. And don’t get me started on the approval process — women-owned businesses that seek financing receive fewer approvals than male-run ones. Whether you’ve tried to seek funding and have been turned down, or are contemplating your first time, I’d suggest seeking out female-centric investor groups who are particularly keen on supporting other women.

    If you choose to go a more traditional route, make sure you aren’t being unnecessarily conservative with your projections. And, don’t hesitate to negotiate for the capital you need — here are my top three negotiation tips.

  2. Lack of confidence.

    Perhaps you’re feeling a bit out of your element when it comes to entrepreneurship because you didn’t go to college, you’ve had a tough time holding down a job, or you aren’t good at math.

    Well guess what?

    The majority of entrepreneurs don’t have a four-year degree, regardless of gender — yet you sure don’t see the lack of a diploma holding men back! As for job-hopping a lot, well, sounds like perhaps you don’t make a good employee (nor do I) and entrepreneurship is the perfect path to allow you to shine.

    And then there’s the topic of math (or sales or marketing or any of the other tasks required to run a business that you may not have much experience with): most people aren’t a jack-of-all-trades (or a Jill-of-all-trades). You’ll either figure out how to do those other business tasks, or you’ll outsource them to an expert.

    None of these “obstacles” should make you feel as if you don’t deserve to own a successful business. Maybe you need a coach to help you see the potential you have.

    Maybe you need to call your best friend and get a pep talk. Or maybe you need to sit down for a couple hours and write out all the great wins you’ve had in your life and wonderful blessings you enjoy. Each will help you gain more confidence. And you’ll need that confidence to raise capital, make your first sale, overcome your first failure (and each subsequent one — remember, it’s OK to fail), hire the right people, fire the wrong people, make tough decisions, decide which advice to take and which to ignore, and take your business to the next level.

    Being confident doesn’t mean you have to have all the answers — but you have to trust in yourself that you’ll know where to find them. When you walk into a room exuding confidence, everyone looks at you differently. You earn respect, you win negotiations, you close deals. You know the term “fake it ‘til you make it?” If you fake confidence well enough, you’ll even convince yourself — and, frankly, that’s half the battle.

  3. Hidden support network.

    If you’ve ever worked at an organization where your male boss and colleagues met up after hours for a round of golf, and you weren’t invited or had to decline an invitation because you don’t play, you probably realize you’ve missed out on more than just fun — you’ve lost valuable bonding time with your team.

    Or perhaps you’d love some mentorship to further your professional growth from a kindred spirit, but there aren’t any females at the head of the company you work for. How are you supposed to build a network in a world where it’s less about “what you know” and much more about “who you know” when you don’t have a seat at the table or a role model you can access?

    While the old boys’ club may never die, there are female equivalents that can give you the support you desire. Look for women-focused networking events, online groups dedicated to female entrepreneurs or women-owned businesses, or ask those in your inner circle for introductions to strong, successful women. Once you find your sisterhood, don’t shy away from asking questions. Women often want to help one another out, so be clear in what you need and focus on finding the best person to offer advice or lend a helping hand. Someday soon, you’ll have the chance to repay the favor.

Do you see how these three traits contribute to the failure of women-owned businesses to grow?

When you have confidence, you have a mindset that allows you to see a world of opportunity and your ability to participate in those opportunities. Confidence also allows you to ask for things you need, like capital, and seek out the advice and comradery you need from other successful women. And once you have more women in your corner supporting you, and more capital to get your business off the ground, you’ll be brimming with confidence.

Today, as you think through your business-building dreams, look at this list and ask yourself, “Where do I need to grow more?”

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