There has never been a better time to ‘go global’ and doing business internationally has never been easier… but can women really make it on the International stage?
The truth is that when it comes to women owning and running businesses, the picture is a little mixed.
On the bright side, women are founding companies at an historic rate, with nearly 10 million women-owned businesses in the U.S. today. What’s more, the number of women-owned firms continues to grow at twice the rate of all U.S. firms (23 percent vs. 9 percent). In Australia, just over a third of business operators are women (34%), and their numbers are rising – go Australia!
But here’s the thing, while more women are starting businesses than ever before, relatively few of them take the next step of launching their business on the international stage. In both the States and Australia, less than 5% of small companies sell outside their home market. Two-thirds of these are owned by men, which means that just a tiny fraction of businesses owned and run by women are expanding internationally.
Why is that? Are women not so great at international business? Perhaps their companies provide services that don’t sell abroad?
The answer is a resounding “no”, in both cases.
Companies run by women create all sorts of of functional, beautiful, innovative goods and services that are highly desirable, both at home and abroad. I’m talking strategic marketing, disposable nappies, the circular saw, multicultural marketing, jewellery, career consulting, bikinis, vitamin powder, gluten-free cake mix, tea … there’s no shortage of examples.
And when women are able to take their company abroad, they frequently do pretty well (tune into the Business Beyond Borders podcast throughout March to hear more on this).
However, while women aren’t hindered by lack of creativity or natural ability, they do face a number of particular challenges when it come to starting, growing and expanding a business internationally.
Access to finance
The greatest challenge for women-owned firms around the world is access to capital, credit and equity. According to a study led by Babson College in Masachusetts, between 2011 and 2013, just 2.7% of venture capital raised in the US went to companies led by women.
In March 2017, the OECD reported that in all countries except for the United States, Mexico, Greece and Indonesia, women are less likely than men to report that they can get the financing needed to start a business.
The OECD said that this gender gap could be associated with gender-biased credit scoring and gender stereotyping in investment evaluations, as well as women having lower levels of experience and operating in highly competitive and low-growth sectors. Shamefully, in some countries, women are also hindered by less access to basic financial services (e.g. cheque and savings accounts).
Because they often find it hard to get their hands on external sources of cash, women entrepreneurs are more reliant on self-financing. The Australian Women’s Chamber of Commerce and Industry (AWCCI) survey of women business operators in Australia found that 66% of women’s startup funds were sourced from personal savings and 25% from a credit card or bank/credit union loan. 42% of respondents started their business with less than $5,000, while 83% did so with less than $100,000.
Because of the difficulties in accessing finance, women are also more likely than men to be discouraged borrowers, i.e. people who do not apply for loans because they believe that their application will not be successful.
It’s not just lack of access to capital that slows women down.
According to the 2015 Australian Women in Business report Australia’s women business operators are more likely to be married and more likely to have children (and dependent children) than any other employed people, except for women who work without pay in a family company.
How do family commitments affect female business owners? Katrina McCarter, Founder of Marketing to Mums says:
“In the past year, I have coached more than forty women business owners. These were all mums with the majority being the primary carer of their children. They have an enormous workload and are incredibly stretched. They are, without exception, incredibly passionate about their business but struggle to drive growth. They do not always have the money to afford full-time care for their children, and many look to juggle the demands of parenthood and business until the business has grown enough to afford childcare. It can be a recipe for disappointment and sets up many mothers for business failure.”
Where are the mentors?
If you’re a single mother running a business, if your family doesn’t back your entrepreneurial drive, or if your friends are all employed and can’t understand why you want to strike out on your own, keeping your company running can be alone and draining business. Not a great recipe for finding the inspiration and energy you’ll need as you start your international journey.
Everyone needs support in business, particularly in their first few years of business, but there still isn’t that much specialised help around for women entrepreneurs. Although mentoring for women in business is on the rise, experienced female mentors are still in short supply. More still needs to be done for women to enjoy the same level of success as men.
“I don’t know where to start”
“I just don’t know where to start” is a phrase I hear frequently from women who want to expand their business abroad. This isn’t a challenge unique to women, but I believe that it is especially important for women. Whereas the guys are often willing to “make it up as they go”, female business owners tend to be more structured and more cautious. That means that in the absence of the right skills and knowledge, or a clear direction, many of them are unwilling to move forward.
And that can be problematic, because the truth is that there aren’t very many structured pathways into international markets, and if you don’t have prior experience of running a business in a foreign country, it can be tough going.
“I just don’t have time”
For the woman juggling family and business, running a company alone and doing it self-funded, time is at a premium. It’s little wonder that lots of female entrepreneurs feel as though they just don’t have the time to dedicate to an international business expansion while maintaining domestic operations.
Here’s where we come in
Dearin & Associates is a champion of women in business and as its founder (and a woman), I am particularly keen to see female entrepreneurs succeed on the global stage.
My core team is all-female (with the exception of our Finance department), we are located around the US and Australia and about 50% of us have children. Ladies, we understand what you’re dealing with!
With International Women’s Day coming up, we are keen to highlight the challenges that women in business face. More importantly, we want to support women who are trying to expand their business overseas.
We can’t do much to ease the burden of family commitments, but we can definitely help with the other problems I highlighted earlier!
Our International Business Accelerator provides a structured pathway into international markets. The program is built around three principles:
- Skills & Knowledge
The IBA gives you a clear structure for taking your business into international markets, from choosing the right country to start in right through to choosing the right team.
We work with companies in groups and one-to-one, so you never have to take the journey alone.
We’ve created a program that’s broken into small pieces and can be attended from anywhere, so it can accommodate event the most time-poor of schedules.
And what about the money?
Because we recognise that access to finance is the leading issue for women business owners wanting to grow abroad, we are awarding a full scholarship to one year of the International Business Accelerator to one lucky female entrepreneur.
That’s 12 months of tailored education, mentoring and community … on us.
We’re also awarding a number of part scholarships to the program, to ease the way for promising entrepreneurs who are also women.