Navigating the Top Challenges for Female Business Owners

Female business owners are a formidable force in the U.S. economy. They own more than 11.6 million firms, employ nine million people, and generate $1.7 trillion in sales. They are also starting businesses in growing numbers and make up 40% of new entrepreneurs.

Yet, despite these numbers, women in business face several barriers to starting, growing and making their businesses a success — from dealing with bias when accessing capital to achieving a sustainable work-life balance. Could this be why almost all (99.9%) of female-owned businesses are considered small businesses and are more likely to stay small than male-owned firms?

Here are three key challenges faced by women entrepreneurs today and tips and resources for overcoming them.

1. Lack of Access to Capital

Despite their potential, the biggest challenge for female small-business owners is finding capital. A lack of capital or cash flow impacts 35% of female entrepreneurs.

This is likely due to the continued struggle women face in securing capital from traditional sources, such as banks. Only 25% of female business owners seek financing for their businesses, and those who do receive nearly 50% less than their male counterparts. It’s an alarming trend that’s only getting worse. In 2017, the average business owned by a woman received $57,097, down from $99,000 the previous year.

So, how are women funding their ventures? Without access to third-party funding, women resort to cash (36%), friends and family (17%) and other sources.

There are many reasons for the disparity between the genders when it comes to financing. Many women start their business when they’re younger and tend to have lower credit scores or lack a strong financial history — two key factors that banks scrutinize when assessing loan applications. Women may also be refused credit for reasons such as a lack of credibility and legitimacy or a cultural or gender bias.

There are several programs and initiatives that can help improve access to capital for women in business. Loan programs from the Small Business Administration (SBA), for example, can open the doors to credit. The SBA doesn’t lend money, but it provides a guarantee to banks, thereby making it less risky for them to extend credit to those who may not otherwise qualify. SBA’s Lender Match tool can connect you to participating approved lenders.

Beyond finding a lender, the SBA’s Office of Women’s Business Ownership also offers access to valuable resources that can help women put together a strong business case and pitch for funding.

The federal government also sponsors funding and grant programs through initiatives such as the Amber Grant Foundation, the Cartier Women’s Initiative Award and the Eileen Fisher Women-Owned Business Grant Program.

2. Finding Role Models, Mentors and Networks

Starting and growing a business can be a lonely process. It also involves wearing many hats and stepping outside your core skills to embrace functions such as hiring, training, sales and marketing, navigating the regulatory landscape, IT and more. Going it alone isn’t easy, which is why entrepreneurs who have access to a mentor are five times more likely to launch a business and stay afloat for longer (80% of businesses with a mentor stay in business after 12 months).

A good place to find a mentor is SCORE. A partner of the SBA, SCORE offers free business advice and mentoring both in person and online and has helped more than 11 million entrepreneurs in its 50-plus year history.

Women’s Business Centers are another SBA resource, providing counseling, training, networking and more at more than 100 nationwide locations. If you’re in the tech space, check out Women 2.0 or Women in Technology.

Networking events such as WINConference, BizWomen and Women’s Entrepreneurship Day, as well as female-focused accelerators and incubators, can help women gain access to and build strong networks.

3. Achieving Work-Life Balance

Although entrepreneurship is often motivated by the desire to achieve a more flexible work-life balance, it can also be stressful and overwhelming — especially for female business owners who feel pressured to live up to a perfect ideal.

Having a clear sense of what work-life balance means to you individually can help, as can having clear boundaries.

But, it’s also important to accept that there’s no such thing as a perfect work-life balance. Darla Baggs, president of the National Association of Women Business Owners, suggests that the perfect 50/50 life-work balance just isn’t possible. Your business may require more of your attention one day and less the next. Use that free time wisely and to its fullest, taking a few minutes out of even the fullest day for yourself.

And if you need help, there’s an app for that. Track and better optimize your time with TimeTune (Android) and ATracker (iOS). Use Focus Booster to stay concentrated and minimize distractions. Manage stress with Calm. And plan more family time with Cozi Family Organizer.

Bottom Line

It all comes down to finding out what works best for you. After all, no one wins if you end up burning yourself out. So, make time for yourself — it’s in both your and your business’s best interest.

Caron Beesley
Caron Beesley
Caron Beesley is a content marketer and writer. A contributor to SBA, SCORE, and more, Caron is an expert at the nuances of small business ownership, the obstacles and opportunities, and can advise on best practices for success.

See all posts by Caron Beesley
  • All views expressed on the published articles at are those of each of the authors, and do not in any way represent the opinions of Mastercard International Incorporated or any of its affiliates (“Mastercard”). Mastercard is not responsible of the information contained in these articles.