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Female Business Owners Need to Overcome Challenges

The number of women entrepreneurs in South Africa continues to grow, but the increase is not at a level it should be due to the higher number of challenges they face in comparison to male entrepreneurs.

Chana Boucher

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Female entrepreneur amongst male entrepreneurs

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.”

Major challenges

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.”

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3 Ways Women Owners Of Early-Stage Companies Can Fight Adversity

Only 11 percent of venture capital firm partners are women, which explains why men get funded so disproportionately more. So, what are you going to do about this?

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Male entrepreneurs have an inherent leg up over their female counterparts. This may not come as a shock, but maybe the actual numbers do because they don’t represent an equal playing field.

Take start-up funding, for instance. Pitchbook revealed that only 11 percent of venture capital firm partners are women. This is a strong reason why runway capital – a vital resource for any business – is awarded to male leaders instead of female leaders at an astoundingly disproportionate rate.

Still, there is some good news: In April, the Female Founders Fund – which includes Melinda Gates, Whitney Wolfe Herd, and Katrina Lake – did its part to begin to fix that disparity. The collective set up the Female Funders Fund II, a $27 million initiative aimed at investing in early-stage companies led by women.

Lack of funding hamstrings any young company, limiting the level of talent it can target and stunting its ability to scale in a number of areas. And for female entrepreneurs, unfortunately, funding is just one of several uphill battles they face – along with harassment and issues pertaining to family and childcare flexibility.

These barriers, and many others, can derail women early in their entrepreneurial quest. Luckily, the climate and resources are now finally there for women leaders to persevere and thrive in the face of early obstacles. Here are some tips on how they – perhaps you – can thrive.

Related: Funding And Financial Assistance For SA Women Entrepreneurs

Don’t let the muck keep you down

Naya Health co-founder and CEO Janica Alvarez had one mission when she was pitching her startup to VCs, according to a Bloomberg report: to raise capital for her young company, which had just patented a smart breast pump. Instead, the (mostly) male group of VCs peppered Alvarez with questions about how new mothers stay in shape and how she expected to balance motherhood and a business. Others were visibly uncomfortable discussing the product or even touching it.

Alvarez’s dilemma was one that’s not new to women in business. Of course, some struggles are simply a part of entrepreneurship, but there’s no question that women need more grit and determination than most men in order to find success.

Women certainly have the ability to inspire their teams in unique ways, and we are seeing them use that strength to deliver effective and enduring business strategies. But getting there isn’t all roses and sunshine. Adversity will hit, and the fate of your company will hinge on your ability to push through it. I myself made it through, mostly with the help of three methods:

1. Free your mind so the rest will follow

True story: Someone at a VC fundraiser once asked me if I was creating an all-lesbian management team because I was there with two other women leaders. Dumb comments like that one happen, but you can’t let them mentally distract you from where you want to go. When people disparage your product, revenue model, strategy or expertise, you need to keep your head above the fray even when it feels like the sky is falling.

Ban.do founder and chief creative officer Jen Gotch regularly shares about her struggles with mental health with her Instagram followers. She’s a big believer in the role a full night of sleep plays in her mental recovery. Sleep gives your brain the break it needs to declutter and put all your highs and lows into perspective.

Develop your own routine for keeping your mind fresh. These methods can be anything from meditation to set-aside times each day for a mental recharge. No matter what, it’s a habit that can mentally prep you to face whatever challenges get placed at your company’s feet.

Related: 10 Successful SA Women Entrepreneurs’ Top Advice On Balancing Work And Family

2. Don’t take physical fitness for granted

During a speech at the 2017 TEDWomen Conference, neuroscientist Wendy Suzuki spoke about the transformative effects exercise has on the brain. She explained that even a single workout improves our mood, energy, memory and attention by increasing the levels of neurotransmitters such as dopamine, serotonin and noradrenaline.

After a workout, the ability to focus lasts for at least two hours. Likewise, a workout can speed up your physical reaction times and cause everyday stumbles, such as spilled coffee or bumped shins, to frustrate you less. Being a black belt in taekwondo, running marathons and weightlifting all provide me with a physical outlet to work out my frustrations and start emotionally fresh.

Body and mind work as one, so don’t let your fitness routine fall by the wayside in the pursuit of entrepreneurial glory. Carve time out each day to get a physical workout to maintain mental fluidity.

3. Lean on others when that’s needed

Having a strong network of men and women leaders who’ve paved the path before you is paramount. They can tell you when you are on track; when you are off track; and when you need to pivot, tilt or speed up.

If you have to face additional challenges compared to male entrepreneurs, you need additional practical resources. While male entrepreneurial success stories are all over pop culture, we women have to look a little harder for triumphs by our gender in business. Hearing other women tell their stories will encourage you.

If you’re having trouble finding great mentors, find an entrepreneur networking group for women, such as Women Who Tech. Networking groups offer workshops, free events and resources.

And when all else fails, take a girls’ night out with friends: Drink a bottle of wine, cry a little, laugh a lot and be surrounded by unconditional love. Even if your friends don’t know a thing about software or coding, the power to refresh your emotional health should never be taken for granted.

If you care about your business, don’t let negativity hold you back. These tips have helped me stay sane and determined throughout the challenges I’ve faced. To overcome the odds, find what it is about you that’s empowering and apply it to your business.

This article was originally posted here on Entrepreneur.com.

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Too Few South African Women Become Entrepreneurs, But This Can Change

Organisations built by business women and that speak loudly and assertively for business women will send an unambiguous message that women belong in the community of entrepreneurs.

Gugu Mjadu

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Although South Africa’s constitutional democracy has been advocating for gender equality for the past 24 years, the level of entrepreneurship among South African men and women is still far less equal than the country’s economic peers such as Ghana and Uganda. This is an indication that a progressive constitution alone is not enough to ensure that women join the local community of entrepreneurs in equal numbers to men.

Illustrating this, are the latest figures from the 2017/2018 Global Entrepreneurship Monitor (GEM) which show that 13 out of every 100 South African men are involved in total early-stage entrepreneurial activity, compared to just 9 out of every 100 women. 

This research shows that the inequality goes deeper than just the headline figure. A higher percentage of women who do start their own ventures do so out of necessity (34.3 percent for women vs. 18 percent for men), whereas South African men, on the other hand, are more likely to start a business in response to an opportunity (82 percent for men vs. 65.7 percent for women). As research indicates that opportunity-driven entrepreneurs are more likely to create wealth than necessity-driven entrepreneurs, this is definitely an area for improvement for our country.

The GEM study is an annual survey, and dishearteningly, a look at the GEM figures over a number of years shows no discernible trend towards closing the gap, while some of South Africa’s economic peers such as Brazil and Vietnam consistently show an equal number of men and women starting businesses. 

Related: 10 Successful SA Women Entrepreneurs’ Top Advice On Balancing Work And Family

Gender parity in entrepreneurship needs a consistent stretch of truly high economic growth, north of 6 percent, to shake lose any remaining cultural, psychological and economic chains that are keeping women back. Unlike its counterparts, South Africa’s economic growth over the past few decades has seldom breached 4 percent – hovering around 3 percent since 1994. 

This might also explain the general low levels of entrepreneurship in the South African population, among both men and women, compared to its economic peers – 11 percent of the South African population is involved in entrepreneurial activity. Wealth creating businesses start in response to opportunities, which multiply when economic growth is strong.

Short of a massive economic stimulus needed to propel South Africa’s economic growth upward, is there anything that can be done on an incremental level in order to establish entrepreneurial equality between men and women in South Africa? 

I believe that there are many low-key ways in which to entice more women to become entrepreneurs. One place to start, is to focus on the income-generating side-lines that many South African women are engaged in. A scan of social media shows that South African women are not short of ideas nor initiative. From activities that are traditionally seen as female-oriented such as baking and sewing, to truly innovative social clubs and online initiatives seem to provide an outlet for many women’s entrepreneurial urges. Yet too few of them develop into proper full-time careers.

Programmes focused on women and their side-hustles might find fertile ground to grow them into fully fledged businesses.

Another factor that might entice more women to start businesses is more accessible finance. There is no easy solution, however, as research shows that men are more likely to start looking for finance early when they launch their ventures. Women, on the other hand, are more likely to use their own funds to start a business and thus delay seeking finance until their venture is potentially in trouble making it more difficult to secure finance. 

The solution, if any, lies in education and training deep enough to effect a significant shift in mind-set. Given the poor state of the educational system, South Africa still has a way to go, but it could be argued that any incremental improvement in the education system would boost the country’s levels of entrepreneurship. 

It remains to be seen if an increase in gender equality and representation among bankers and financiers may lead to improved access to finance for female entrepreneurs, but because it is a good thing in itself, gender parity in the finance industry is worth pursuing. 

Related: Watch List: 50 Black African Women Entrepreneurs To Watch

The celebration of female entrepreneurship in popular culture, social media and as part of cultural events remains important and probably cannot be overdone. Awareness of the possibility of success in the business world for females remains fundamental to any young woman’s decision to choose entrepreneurship.

Finally, a strengthening of the profile of women’s business associations in South Africa can become an important factor in increasing the number of female entrepreneurs. Organisations built by business women and that speak loudly and assertively for business women will send an unambiguous message that women belong in the community of entrepreneurs.

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11 Quotes On Hard Work, Risk-Taking And Getting Started From Beauty Billionaire Estee Lauder

The cosmetics tycoon provides lessons on the importance of passion and perseverance.

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Like most entrepreneurs, passion was at the core of cosmetics tycoon Estee Lauder. From a young age, Lauder was obsessed with beauty, and it wasn’t before long that she turned her dreams into reality. With the help of her chemist uncle, Lauder developed creams and other products that she would sell to local beauty stores in her hometown of Queens, N.Y. In 1946, Lauder officially launched her now world-renowned beauty company Estee Lauder with her husband Joseph Lauder. The business skyrocketed to success.

In 1998, Lauder was the only woman to land on Time’s top 20 business geniuses of the 20th century. In 2004, the year Lauder died, the beauty entrepreneur was named Time’s person of the year. Estee Lauder has become one of the biggest brands in beauty, with a worth of more than $50 billion. The company employs more than 46,000 people worldwide.

To learn more from Lauder and the cosmetics empire she built, here are 11 inspirational quotes on hard work, perseverance and getting started.

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