As per research, the number of women-owned businesses in the U.S.A. increased by 114% in the last 20 years, by 3000% since 1972. While this is an astounding number, but the reason behind the jump is not so impressive. A report published in 2017 coined an interesting term to describe the reason why women prefer the life of an entrepreneur more than that of a corporate employee. This term was called necessity entrepreneurship. The report used this term to talk about people who move towards business due to their economic needs. However, the National Women’s Busines Council (NWBC) decided to extend the meaning of the term to non-economical needs as well.
Globally, men and women face different truths at work, home, and within the communities. Unfortunately, it is always the women who face the harsher side of the facts. Therefore, it made sense when women decided to rise to the occasion and take charge of their life. Entrepreneurship presents an opportunity to improve the lifestyle, to strike a better work-life balance, and therefore, women plunge at it. Let’s look at the reasons why women started owning to businesses.
- Work-Life Balance: A PayPal survey in 2014 also presented similar facts. 61% and 66% of the women from France and Mexico respectively expressed their willingness to pursue entrepreneurship to have pride in their work. 55% of women from the U.S.A. wanted to find opportunities that provided better work-life balance. As per Kisi study Singapore ranks 32 among 40 countries for perfect work-life balance. Another study reveals based on gender gap that 9% more women than men feel that they donot have ideal work-life balance in Singapore.
- Autonomy & Control: As per Morra Aarons-Mele, women also start their own business is to have more autonomy, leadership, and control over their time. Such a setup allows the women to take time for their family as and when required without asking anyone’s permission.
- Gender Gap: Discrimination in the workplace is another reason why women want to give up their corporate life. As per the Census Bureau, women with the same experience and qualifications get paid up to 20% less than their male counterparts in 2016. Another study reveals that women will not be able to match up salaries with men until 2119.
- Gender Disparity: The difference does not stop at the salary gap. Research by LeanIn.Org and McKinsey & Co. shows that women who perform the same as their male team members are 15% less likely to be promoted. All these statistics are reasons why women prefer entrepreneurship over the job market – it helps them earn more and be in leading positions.
- Value System: It is considered that women hold values as their priority. Therefore, when their values do not align with that of the company, they start feeling suffocated and disconnected. This is another primary reason why many women wish to take up entrepreneurship – to live their values and leave a legacy of good practices in commerce.
The story in Singapore is no different. Singapore is the third most favorable place for women entrepreneurship in Asia-Pacific. Talent and technology have empowered the women in Singapore to start with their own ventures quickly and efficiently. Females owned businesses make up for approximately 30% of the companies in Singapore. The low number is due to women in Singapore are always “weighed down by their protracted challenges” in finding the perfect work-life balance.
But, Is It Right to Blame It All on The Society?
Women were indeed oppressed bluntly until the last few decades. This gave bare minimum opportunities to the women to become a prime earning member of the family. However, in the current times, women have a chance to venture onto the path of entrepreneurship. Of course, one cannot ignore the fact that society still needs a lot of transformation, but again, what stops the women from leaping?
- Less Confident: The biggest challenge for women entrepreneurs are they more afraid of failure than their male counterparts. Also they find it difficult to muster courage to try again in case they fail, due to burden of being perfect. The study also discloses that women are less confident of their business plans and hence undermine their capability, leading to lower earnings. This inability of the women can be proved from the fact that only 5 percent of Japanese women responded that they have all the skills necessary to start a business when asked in a survey.
- Lack of Finanical Literacy: The reasons like lack of financial literacy, inability to take quick actions, and not relying on the supportive anchors of life like family, friends, passion, and team when facing setbacks deter them from becoming successful enterpreneurs.
- Finding Investors: The third annual S.H.E Summit in New York City discussed all kinds of concerns that women face while scaling their business. An essential part of the discussion was that women do not get enough funds because they fear the process of asking for money. Also there arent many venture capital firms investing in women-led organisations.
- Risk Aversive: In a business scenario, women have low-risk appetite and hence fewer entrepreneurship opportunities. They love being in businesses that deal directly with the end customers, like retail chains, e-commerce and such allied businesses. This is purely due to women hold lower aspirations and settle for less money but a higher degree of security. Due to lower risk appetite women find it difficult get investors to fund their businesses. Risk Aversion can lead to lack of competitive spirit, stagnated growth and fewer market opportunities.
Mistakes to Avoid Before Taking the Decision
The first step towards starting a business is to have a plan and commitment towards it. Entrepreneurship is adventurous and therefore attracts terrible decisions. One needs to understand that this decision can land oneself in a situation filled with confusion, anxiety, failures, and stress. Hence, one should be well-prepared before leaping. Here are a few common mistakes that should be avoided at all costs.
- Spending too Little Money: A lot of new entrepreneurs spend the minimum required capital until the business can generate steady cash flow. However, this can be harmful in the long run since it can cause the company to lose opportunities and talent.
- Not Analyzing the Competitors: Exciting ideas can make people forget about the world, and hence neglect competitors. A lot of entrepreneurs think that they have no competition because their products or services are unique and best. The truth is, unless a company has discovered something new, there exists competition, and therefore, should not be taken lightly.
- Not Setting Pragmatic Goals: The ‘big idea’ is fantastic. However, to achieve it, entrepreneurs require several small plans and steps that are attainable and measurable. It is always preferable to have short term goals and a written, detailed plan to achieve it. If the set goals are impractical and not within the reach, failure is inevitable.
- Not Hiring People: This is a rookie mistake that many entrepreneurs commit. Even the most efficient person has limitations that can only be removed by hiring more people and training them to perform specific tasks. Need to strike a balance between hiring the right number of workforce and skill required to complete the work. It will facilitate to increase productivity, work efficiency and save manpower cost, resulting in succesful achievement of set goals.
- Being Engulfed in Fear: Failure is a part of an entrepreneur’s life. Starting a new business is scary, but unless an entrepreneur can get above the fear of losing or being rejected, the success will never knock at the door. Also, fear can hamper productivity and bring negativity to the workplace. The only way to win over such fear is by being confident in the plan and the idea.
4 Steps That Women Should Consider While Making ‘The Switch’
Making the switch is always going to be a very daunting task unless we have done our homework and are well prepared mentally, physically, and financially. There is always an underlying risk involved while making a change. Still, you can consider some fundamental steps before taking the plunge.
- Set Intentions & Goal: Need to chalk our a clear path to your goals. Visualize the next five years of your life, which may sound exciting but can lead to downhill. Your intention to achieve the goals needs to be positive and with a lot of conviction. Switching careers can be a risky affair. Go through every aspect of the plan, assess all the risks, and decide after evaluating your overall condition. Entering the world of entrepreneurship can be rewarding, but it comes without a safety net. Also, test the waters before going all in. The initial idea is always raw. It needs to be probed and broken down to arrive at a solution or a product that can be sold to the masses.
- Financial Security: Corporate life has its perks like financial security, maternity leaves, creche facilities for babies, and paid leaves. However, for a business owner, these perks can fade away for an indefinite period. The best thing before quitting your job is to build your financial security, right off or minimize the debts and pump the savings in the bank.
- Learn Accounting and Managing Finance: A lot of female-owned enterprises fail because they are financially illiterate and cannot manage finances. If you do not have the skill for it, acquire it before quitting the job. It is paramount importance to financially empower yourself with knowledge and education. Make sure you have six-month contigency funds for any unforeseen circumstances.
- Do Your Homework before you Deep Dive: Make sure you update your LinkedIn profile, build your network by getting in touch with your old and new colleagues, friends, and attend the alumni networking events. Get your infrastructure required for the workplace in order in terms of office equipment, a place to work, software, internets, and more.
How Can the Government of Singapore Help?
The Government of Singapore provides several grants and supports various schemes to nurture entrepreneurship in the country. Women business owners in Singapore can benefit from these schemes and use them to improve their businesses. Let’s go through some accessible grants.
START-UP SG FOUNDER
The government plans on providing mentorship and financial support to the new entrepreneurs under this scheme. The scheme promises a grant of up to $30,000 by matching $3 to every $1 raised by the entrepreneur. The funds are dispersed through A.M.P.s (Accredited Mentor Partners) based on the uniqueness of the idea, business concept, business model feasibility, strengths of the management, and potential market value. A successful applicant can expect assistance with mentorship, learning, and networking. More about this scheme can be found here.
STARTUP SG ACCELERATOR
This scheme is aimed at supporting the incubators and accelerators in growing in specific areas. The program helps the high potential start-ups through several programs, mentorship, and allocation of resources. The scheme promises financial as well as non-financial support as needed by the business owners. The cost covered by the scheme includes improving market access, course development, hiring mentors and experts, and technical guidance on the projects. More information can be found here.
ENTERPRISE DEVELOPMENT GRANT (EDG)
EDG helps the new businesses in growing and transforming into companies of tomorrow. The grant supports the activities in three categories: upgrading the businesses, assisting innovations, and venturing overseas for expansion. The focus of the grant is primarily on strengthening the base of the company and enhancing efficiency. The cost covers the third party consultations fees, software acquisition, and internal human resources cost. More details EDG can be found here.
There are several other grants that a business can consider depending upon its current condition. The information of the same can be found on the official Enterprise Singapore website.
The journey of being an entrepreneurship is rewarding but filled with anxiety and stress. Women outscore men in a lot of areas like creativity and leadership. However, the constant feeling of ‘what-if’ keeps the women from exploring the fantastic opportunities that entrepreneurship has to offer. A study by McKinsey Global Institute indicates that promoting equality for women can add $12 trillion to the global economy by 2025. The study also presents scenarios that can take this revenue to 28 trillion dollars, combined with the size of the Chinese and American economies.
The government should also come up with detailed plans to promote women entrepreneurship in the country. A robust framework that encourages women’s participation in the country’s economy can prove to be a significant advantage.