Women entrepreneurs are more bullish than men on revenues and hiring, but remain frustrated by limited access to fundsOctober 27, 2019
- Business Insider attended an event in New York kicking off National Women’s Small Business Month to hear from female entrepreneurs about their experiences and strategies for growing their businesses.
- Bank of America hosted the event and released its fourth annual report on the most pressing issues facing women small-business owners.
- The report, which was conducted with Ipsos Public Affairs, found that 58% of women surveyed said they didn’t have the same access to capital as men. Only 42% of men shared that opinion.
- Women entrepreneurs were more bullish than their male counterparts on some indicators, like revenues and hiring, but remain frustrated by limited access to capital.
- The fourth annual Owner Spotlight asked a national sample of women-owned small businesses about their business outlook, financing options, societal issues, and other keys to success.
- Visit Business Insider’s homepage for more stories.
When the entrepreneur Camille Newman went in search of financing to run her business, she said she was met with a barrage of questions she felt were both invasive and insulting. She had an award-winning business plan and an underserved customer base but could not raise the operating cash to keep going.
Newman, an African American woman and the granddaughter of a tailor, started her high-fashion business, Pop Up Plus, as a series of private shopping parties for women like herself who wear size 14 and up clothing. Over the past nine years, Pop Up Plus transformed into an e-commerce site that has hosted pop-up retail experiences around New York.
This summer, Newman ran into cash-flow challenges and could not secure the credit to continue growing her business — so she began to wind the company down. And she’s not alone.
Through her involvement as a counselor with Brooklyn Women’s Business Center at the Local Development Corp. of East New York, Newman has worked with others grappling with the emotional experience of closing up shop.
“Access to capital is the No. 1 issue,” she said. “You could have good credit and a good balance sheet, and still have problems getting funding. I see it with my clients and in my own business.”
Optimism in the face of persistent challenges
Newman and about 70 other women and men gathered at the Luminary collaboration space in New York on October 1 to kick off National Women’s Small Business Month, where a panel of women discussed their experiences in entrepreneurship and the challenges of building a business in a male-dominated marketplace.
Anchoring the discussion was the release of the fourth annual Women Business Owner Spotlight report from Bank of America and Ipsos Public Affairs. The study’s top line — that women entrepreneurs are overwhelmingly optimistic about near-term opportunities — was well-received by the attendees, who represented a diverse cross-section of businesses and backgrounds.
Behind the optimism is a more sobering fact: More than 30 years after Congress outlawed gender discrimination by lenders, 58% of women surveyed said they still have unequal access to capital. In addition, nearly a quarter of women surveyed said they believed female entrepreneurs would never achieve the same capital access as men.
“It’s disappointing — I don’t want that,” Sharon Miller, Bank of America’s head of small business, said in an interview. “I want everyone to understand that there is equal access to capital. Bank of America’s response is ‘come in, and let’s help you grow your business.'”
Miller said women were actually overrepresented among Bank of America small-business clients, compared with the general population, and pointed to increasing representation of women in upper management and local branches at the company as evidence of the company’s attitude toward equal opportunity.
“Whether you’re a man or a woman, it’s a business,” she said.
The fact remains that the decision-makers in the business world are mostly men, and leaders of either gender tend to be white. The majority of male business owners in the survey, by the way, said they believed women already have equal access to funding.
Drawing strength and support from diversity
At the Spotlight event, women of color described feeling either invisible or shunned as they navigated the business world. The panelist Deepti Sharma spoke candidly about the obstacles she faced as she built her food-service company.
“Venture funders were asking me when I was going to have kids,” Sharma said. “Even my friends and relatives don’t ask that!”
After watching men she felt had weaker proposals successfully build their funding base, she realized she needed to take a bolder, riskier approach to networking.
“Now I pitch myself for everything,” she said. “I get a lot of ‘nos,’ but I also get some great ‘yeses.'”
Also of note: For the first time in the survey’s four-year history, women reported stronger intentions than men on expanding operations, raising revenue, and hiring workers.
Miller expressed hope that the outlook would translate to more women approaching her bank earlier in their development. “Women in general think they have to have it all right before they come in,” she said.
“Come in sooner rather than later when you need the money so that you can work with someone that’s going to understand what you need to do to get a loan,” Miller said.
Speaking on the panel, Miller added she wanted women entrepreneurs to know the bank is there for more than just financing. It can also be a source of advice and insight about how to refine an idea.
“It does no one — not you, not the bank, not your community — any good if your business fails,” she said.
According to the survey, more than half of women believe their local business conditions were improving, but looking ahead to the coming year, they reported a heightened concern over consumer spending and trade issues compared with six months ago.
As important as all of these factors are, the crowd murmured in agreement when Sharma said women entrepreneurs wanted one thing most of all.
“Don’t tell me I have a nice business,” she said. “Buy from me.”
If you or someone you know runs a women’s small business with a story to share, please email Dominick at email@example.com.