Women-owned businesses are steadily growing all over the world. In the U.S. alone, women-owned businesses are growing at more than twice the rate of other firms, contribute $3 trillion to the economy and are directly responsible for 23 million jobs. In developing countries, there are 8-10 million formal small- to medium-sized businesses with at least one female owner.1 But this growth doesn’t always come easy. In fact, women often face challenges that men don’t —challenges that can negatively affect their business’ financial future.
Let’s take a look at how women can help protect their businesses’ financial future.
1. Get the support you need.
Women-owned startups receive just 7% of venture funds and take roughly $35,000 less in business financing than their male counterparts.2 In addition, women often find it more difficult to connect with fellow women entrepreneurs or women in leadership positions who can help them along the way. To get the financial and business support they need, women should seek out venture capital firms, networking events and business centers that are founded or run by women, have a strong history of investing in women or are designed specifically to help women start and run successful businesses.
- Explore funding options that might be available through venture capital funds; read about five VC firms founded by women: “5 female-founded venture capital funds to know — and the popular women-led startups they’ve invested”
- Consider these women-focused networking events: WIN Conferences, EWomen Network, Bizwomen events; and groups specifically for women in business, like Ellevate Network
2. Believe in yourself.
According to the Center for Women’s Entrepreneurial Leadership at Babson College, fear of failure is consistently higher among women than men. Many women simply lack the confidence — not the competence — to succeed in a business venture. However, studies have also shown that women-led businesses outperform those led by men. So, while businesses founded or co-founded by women may receive less than half the investment money male entrepreneurs do, businesses with women at the helm deliver higher revenue — on average, more than twice as much per dollar invested.3 So, feel confident in your abilities and you’ll be well on your way to making your business a success!
3. Find the right work/life balance.
Many women business owners are not just entrepreneurs but wives and mothers too. Finding the right balance between the different parts of your life can be challenging, but is not impossible. Look to others for support so you don’t have to carry the burden yourself; set realistic expectations and boundaries; and set aside time for yourself. Learning to say “no” and to stop comparing yourself to others is also important. In many ways, being an entrepreneur may actually help you — because you’re in charge of your own career, instead of having someone else make the rules.
4. Get the insurance coverage you need.
If something happens to your business — say you suffer a cyberattack, property damage or you are sued because of an error you made in providing a professional service — you’ll want to have the right insurance policies in place to help you get back on track. Here are some key insurance coverages to consider purchasing for your business:
- Business Owner Policy (BOP) – Includes three primary types of insurance to help make you whole again if: (1) you or your company accidently cause someone else reputational or bodily injury (called general liability); (2) your business, products or contents are damaged or lost (called property coverage); and (3) you lost income before your business gets back up and running after a claim (called business income interruption).
- Cyber Insurance – Provides your business with resources, support and reimbursement if you are a victim of a cybercrime, ransomware demand, accidentally share private data or delete client information or lose income due to a cyberattack.
- Professional Liability – Also known as Errors & Omissions insurance, this is a must for businesses that deliver professional services. The policy provides for your legal defense if you are sued due to negligence or mistakes you made while providing professional services, or even if you didn’t do anything wrong but your customer believes you gave bad advice or inferior service and sues you for damages.
- Worker’s Compensation – If you have even one employee, your state may require you to provide this type of insurance. Even if it doesn’t, you’re smart to purchase a policy, as Worker’s Compensation will pay for medical expenses, rehabilitation services, lost wages and retraining for your employees who become injured or ill performing job-related duties.
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1 Source: www.worldbank.org