Ask the Expert: Women face structural, financial and cultural barriers in business world


In my lifetime, the professional options for women have exponentially improved with each decade. It wasn’t that long ago that the only career options for women who wanted or needed to work were as a secretary, teacher or nurse. Today, women enjoy careers across every sector and at every level, though in 2018, the scarcity of females in C suite positions is still a reality.

One trend that continues to grow for women in business is entrepreneurship. In the 21st century, entrepreneurship seems to be the way women are talking control of our financial and professional future.

According to the U.S. Small Business Administration, there are 11.3 million women-owned businesses in the United States, employing nearly 9 million people and generating over $1.6 trillion in revenues. Between 2007 and 2016, the number of women-owned firms increased by 45 percent, compared to just a 9 percent increase among all businesses. Simply put, over the past nine years the number of women-owned firms has grown at a rate fully five times faster than the national average.

Let’s let that sink in. Over the last decade, the number of women-owned firms grew at a rate five times faster than the national average. Why are women taking control of our professional destinies by choosing to travel the entrepreneurial road to self-sufficiency, personal satisfaction and financial success?

There are a variety of factors at work, including the desire to be our own boss, the chance to make more money than we would working for someone else, and the opportunity for better work-life balance.

While the number of women-owned businesses is climbing steadily, these businesses tend to earn less revenue and employ fewer people than our male counterparts. Are women bad at business? Not at all! There are financial, structural and cultural barriers that are unique to female entrepreneurs, according to a new report by the Democratic staff of the Senate Small Business & Entrepreneurship Committee, chaired by Sen. Jeanne Shaheen.

When it comes to access to capital, women entrepreneurs are nearly shut out of the process, receiving just 16 percent of conventional loans, accounting for just 4 percent of the total dollar amount. The numbers are even lower in the venture capital sector, where women receive just 2 percent of funding. This is why many women who want to branch out can’t gain access to capital and become independent contractors for someone else’s business.

In the U.S., women working full time still earn 20 percent less than men who work full time. This disparity explains why women have significantly less personal wealth and savings than men, making us less willing and able to invest in a business venture. In addition, long-standing workplace policies that adversely affect women’s career trajectories, like lack of paid family leave, are structural obstacles holding some women back.

Even the government has a billion dollar blind spot when it comes to understanding just how effective small business tax expenditures are with respect to women-owned firms. The business tax exemptions that Congress has targeted to help small businesses grow and gain access to capital have been so limited in design that they either explicitly exclude service firms, and by extension, the majority of women-owned firms, or effectively bypass women-owned firms who are not incorporated or who are service firms with few capital-intensive equipment investments altogether. It remains to be seen if the latest business tax exemptions passed by Congress will be more favorable for the types of business traditionally started and owned by women.

On the surface it looks like women have not been deterred from entrepreneurship, but if we dig deeper we see that society has much room for improvement. Women make up 51 percent of the population. We are not letting obstacles hold us back from launching our businesses, but our potential for economic growth is incredibly untapped.

We teach entrepreneurs to look for opportunities. We encourage them to question the status quo and explore new ways of doing the same old thing. Perhaps it is time for us to look at our structural gender gaps and ask, “Is it time for a different approach?”

With a focus on polices to end pay discrimination, more socially responsible workplace practices, and a business tax code that values the service industry and micro business, we can disrupt the status quo, and make an investment in a better economic future for women and for all of us.

Nancy Pearson is the director for the Center for Women & Enterprise’s New Hampshire Women’s Business Center in Nashua.