The vast majority of working women – whether sole or coupled, in dual or single income households – have to juggle myriad responsibilities inside and outside the home.
Despite these obligations, the number of female owner-operators of small and medium-sized business (SME) in Australia is growing – a rise of 7.5% in the past decade, compared with 0.3% for men, according to latest available Census data.
But although the growth of the female-led small business is steady, data from the Census, supported by figures from the ABS, shows women own and manage only 37% of SMEs in Australia.
There are also gender differences in motivation, according to the ABS Profile of Australian Women in Business. Unlike men, women who become owner-operators of SMEs, rate ‘greater flexibility’ above the desire to earn a higher income. Many report their weekly income as ‘average’, despite working slightly longer hours than the average employee.
Despite the under-representation of women in Australian business, according to the Global Women Entrepreneur Leaders Scorecard, Australia is the second-best place for women to start up a business after the US, and we also get top scores in terms of women’s access to SME training programs.
Women frequently begin businesses to fill specific gaps in the market – often in areas where they perceive a need. Their personal experience and understanding of potential markets translate into practical products and promotions that resonate well with targeted groups.
Their own route to building a business also helps women become effective mentors, attuned to the needs of those who look to them for guidance. Women often report having had female bosses who encouraged them and shared their know-how and expertise, and are therefore willing to ‘pass it forward’. They also build supportive and collaborative relationships within their networks.
Unfortunately, only a minority have the opportunity to use these skills in employer roles; less than 5% of employed Australian women are employers themselves.
The Not So Good
40% of business women believe they face greater challenges than their male counterparts.
They still report subtle gender bias. When pitching proposals, women experience more probing challenges and criticisms, often aimed at their ability and understanding.
And the gender pay gap is still a reality. One of the key findings about women and work from the Workplace Gender Equality Agency in 2018 is that “there is a gender pay gap favouring men in every industry and occupational level”, ranging from 8.4% (clerical) to 24.9% (management) and 26.7% (technical).
Women are also under-represented, less visible and less well integrated into mixed gender business networking systems.
By far their biggest challenge is gaining access to finance – through grants, venture capital or even loans.
Research by the Boston Consulting Group shows female-led start-ups receive only about 2% of available venture capital, even though they perform better, and ‘deliver higher revenue—more than twice as much per dollar invested—than those founded by men’.
The Australian scenario is better, but women-led businesses still receive a very small proportion of capital funds. Ursula Hogben, General Counsel at LegalVision, believes it is less about unwillingness on the part of investors and more a ‘lack of communication channels’ between the parties. According to Hogben, “few (women) approach VCs to pitch and request investment”.
As a result- and further compounding the problem- women owners are less inclined to back themselves, to challenge pushbacks and argue their case.
This is one of the many reasons why they are increasingly turning to women’s investment networks – for support, and information about business grants. They also approach non-traditional lenders, who offer simple application processes (often online) and flexible smaller loans to finance the setting up or growth of their businesses.
Women in business represent a huge source of social and economic potential whose value is not yet fully realised. Though these days it’s not exactly business as usual, there’s still a long way to go.