This is the outcome of a number of studies done on the state of entrepreneurship in South Africa. While many of the findings are inconsistent, the feeling that women have the potential to play an increasingly important role in the country’s economy is evident. The South African Women Entrepreneur’s Network’s (SAWEN) study ‘Women Entrepreneurs in South Africa’ claims: “Women entrepreneurs are expected to increase rapidly in the next decade and they are expected to make an important contribution to their national economies.”
The South African female entrepreneur
According to the FNB and Centre for Entrepreneurship at the Wits Business School White Paper on Female Entrepreneurship, up to 38% of all established businesses in South Africa are owned by women. Of these more than 25% are making in excess of R750 000 a year. The research found that the general age of female business owners was 35 and above, while start-ups were mostly under 35. Women entrepreneurs were as likely to be married as unmarried and one one-third have children. A further finding by the research was that most women entrepreneurs have at least a Grade 12 certificate, and many a national diploma or bachelor’s degree. Most of the start-up business women were black.
The ‘Survey of Women Entrepreneurs’ by the SAWEN states: “Women business owners do contribute positively to our economy, with most employing between five and ten people. Both formal and informal businesses contribute significantly towards employment with the slight dominance of formal business.” It also claims that women-owned registered businesses generally dominate over informal businesses in the finance and investment, ICT, minerals and energy, construction, services and transport sectors. Informal or unregistered businesses are more common in the agriculture, arts and crafts, manufacturing, retail, textile and clothing, and tourism sectors.
Starting a business
According to the Survey of Women Entrepreneurs, most women started their businesses for financial reasons. The White Paper said that it is untrue that women were not natural entrepreneurs and only started a business because they had to or to do good. The research showed that most women are choosing to start a business even though they have other options. Some of the most common motives included wanting to be their own bosses, wanting to develop a product idea or wanting to gain recognition. The paper showed that women had the same motivations for starting a business as male entrepreneurs. Many wanted to start their own companies because of the lack of career opportunities in their previous jobs, but also wanted to keep learning and growing, have greater flexibility, build on past experiences and training and increase their income.
The ‘Women Entrepreneurs in South Africa’ study found the reasons women had for becoming entrepreneurs included the challenges/attractions of entrepreneurship, self-determination/autonomy, balancing career and family, lack of career advancement and organisational dynamics. Another strong motivating factor for women entrepreneurs was helping others. “Research suggested that this caring attitude manifests in women’s leadership styles and that goals other than economic growth guide a woman’s business.”
The majority of respondents surveyed for the White Paper, almost 80%, used their savings to start their businesses rather than obtaining external funding. Many also use their personal credit cards or overdraft facility, or they continue being employed part-time and use their salaries to maintain their company. This sentiment was shared by the Survey of Women Entrepreneurs. It said: “The major obstacle to starting up was of a financial nature. The source of start-capital has been mainly the women’s own personal savings or investments. Those women operating in the mining, energy, transport, and retails sectors also used bank loans.”
According to the White Paper, women feel their families are supportive of them in their business endeavours, but their communities value women being employed far more than them having their own businesses. They believe there are greater barriers for women entrepreneurs than men.
The Women Entrepreneurs in South Africa study found that women generally lack the necessary resources for starting and developing their own businesses. It said women had less human capital for the management and development of their businesses. Some of the major obstacles women face include finance, a lack of sales and marketing skills, educational and work background, motivation, comparative earning levels and external networking. For some family responsibility was another challenge. “Pressure to run a home, look after children and care for a husband and family limit women.”