Kendra James-Anderson is the founder of The financial woman. She wants to close the wealth gap with CFO services for women-owned companies.
Supporting women in business is a strong economic decision as experts debate the chance of a recession (paywall). Women make history as the primary breadwinners for their families while also leading about 40% of households. Combined with these factors, supporting small businesses owned by women from all socioeconomic groups means supporting businesses that contribute to local economies and provide good jobs.
Women-owned businesses are essential for economic stability and recovery. With the possibility of a recession looming, now is the time to empower women. This can be the most powerful way to stimulate economic growth.
While that is the case, female entrepreneurs remain Facing Huge Obstacles. They have limited access to financial information, assets and resources. More access to resources will help them grow their business. Eighty percent of businesses owned by women have finite access to capital and credit. Forty-eight percent of female founders lack of advisors and mentors, further hindering their growth.
When I started my financial firm several years ago, I made it our mission to stand up for women. As a virtual CFO for high-performing women, I have first-hand experience of how educating women about financial strategy helps them improve bottom line.
Why women-owned businesses are a critical asset to economic growth
1. Women-owned companies have high resilience. Women-owned businesses show resilience even at the height of a crisis. According to an questionnaire done by the World Bank, women-owned companies responded to Covid-19 with resilience and innovation.
To scale a business, you need to be adaptive to meet the challenges of managing a business. I believe that women-owned companies have emphasized high adaptability. This is an essential quality in the volatile business environment.
Women entrepreneurs have faced many challenges. This is due to discrimination, fewer opportunities, lower wages and limited access to money.
2. Women-owned businesses generate higher revenues. Women-owned businesses generate a higher turnover than companies run by men. Female leaders can create a positive work environment with happier employees. In this way, they can attract diverse talent and a diversity of ideas that accelerate their success. When such companies receive support, it can lead to more growth for the economy. In my experience, I have seen investors back the companies for their potential to generate higher ROI.
Education and training play an important role in educating and retraining women. Companies with effective leadership generate twice as much revenue as companies with poor leadership.
3. Women are enthusiastic about starting new ventures. They have a greater potential to create more employment because: women-owned businesses grow faster than companies owned by their male counterparts.
I have found that they have also shown impressive growth potential. The role of women-owned companies in job creation is evident. According to the Mastercard Index of Women Entrepreneursfemale entrepreneurship grows annually in the US. For example, the percentage increased by 10% in 2018 and more than 16% in 2020.
Women-owned companies in the US hired more than 10 million people in 2018. Empowering women-owned companies could do much more for the economy.
4. Women show unique leadership qualities. Good leadership in an organization is essential. It can ensure that employees remain engaged, motivated and productive with the organization. Raising and maintaining employee morale can be critical to the growth and success of an organization and to our economy.
Effective leadership ensures efficient use of the organization’s resources to support its growth.
Women exhibit unique leadership traits that increase the confidence and productivity of their teams. They want to make sure that everyone feels involved and valuable to the organization. They are more supportive and lead teams with a shared vision, facilitating the growth of their business.
Also female entrepreneurs are more ambitious. I find that women tend to pursue their goals with more dedication and know that they have to put in twice as much effort as their male counterparts. They are also wary of unnecessary and uncalculated risks that threaten the very survival of their business.
Supporting women-led businesses
I believe that supporting and empowering women-owned businesses is a solid and strategic economic decision. Women have come a long way. We have shown that we are an important asset for economic growth and a better future. Our contribution to job creation, empathic leadership and economic growth is significant.