Women entrepreneurs. Image credit: Unsplash/Christina @ wocintechchat.com
Women entrepreneurs are essential for the Canadian economy, a fact recognized by the government’s Women Entrepreneurship Strategy. This strategy was launched in 2018 and has seen nearly $7 billion be put toward supporting women-owned businesses in Canada.
Although women in Canada engage in entrepreneurship more than in other comparable countries, there is still a significant gender gap. Only 15% of women are engaged in startups and 7% are owner-managers of established businesses, compared to 24% and 9% of men, respectively.
If women participated in entrepreneurship as much as men, global GDP would rise by an estimated 3% to 6%, adding $2.5 to $5 trillion to the global economy.
This is not just about economic growth, but is a broader ethical and societal issue. By limiting women’s entrepreneurial participation, we are also limiting women’s opportunities for employment, empowerment and the promotion of gender equality more broadly.
To make entrepreneurship more gender-inclusive, it’s important to confront the underlying biases that create barriers for women. As experts and researchers in entrepreneurship, we’ve identified five common misconceptions about women and entrepreneurship that need to be challenged.
Misconception #1: Women don’t want to be entrepreneurs
The first misconception is that women are not motivated to become entrepreneurs. This misconception partly arises from the gendered language that is often used to describe entrepreneurship.
Entrepreneurial language tends to be masculine, using terms like “risk-takers,” “achievement-oriented” and “confident,” which are all characteristics more commonly associated with men. This perceived mismatch may contribute to the belief that women are less motivated to pursue entrepreneurship.
While women are less likely than men to start a business, in reality, there is strong entrepreneurial motivation among women. Women make up 37% of self-employment statistics in Canada.
Misconception #2: Women are not successful entrepreneurs
The second misconception is that women are not successful entrepreneurs. This has to do with traditional measures of success, which focus on business size, profitability and growth rate.
Relative to men, women are more likely to run smaller businesses with lower profitability and growth, but this does not necessarily mean they underperform.
First, small businesses—regardless of the owner’s gender—have limited profitability and growth in general. Second, women are more likely to be part-time entrepreneurs because they often have to balance business ownership with family and household responsibilities. And third, women are over-represented in lower-growth and lower-wage industries like retail and food services.
These factors explain the lower performance levels for women entrepreneurs, which are influenced by socially constructed and historical factors, not an inability to be successful.
Misconception #3: Women can’t secure business funding
The third misconception is that women entrepreneurs are not capable of securing business funding. While women entrepreneurs are less likely to receive financial backing, this is not because of lack of capabilities.
Instead, women are less likely to ask for financial funding, either because they don’t require it or because they’re discouraged from applying due to fear of rejection.
When women do seek financial backing, they’re usually asked different questions than men are, which affects their outcomes. Finance providers tend to ask women questions that focus on potential failures, while they ask men about potential success.
Since the framing of questions influences their responses, women’s answers—which are often focused on preventing failure—instill less confidence and lead to less funding.
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Misconception #4: Women are risk-averse
The fourth misconception is that women are risk averse, preventing them from becoming entrepreneurs. There is some research that points to this misconception being true; one study, for instance, found that women exhibit higher levels of risk aversion when making financial decisions compared to men.
However, most women are not inherently risk-averse. This perception is likely a result of how women are socialized according to cultural norms and expectations. Women are often expected to be more communal and caring, while men are expected to be more competitive and risk taking.
The way we define and understand “risk” may also contribute to this misconception. Success stories about entrepreneurs often focus on financial risk—something more commonly associated with men.
Less attention is given to the risks women are more likely to take, such as standing up for their beliefs or choosing the ethical route when faced with a dilemma, even if it might result in lower financial success.
Misconception #5: Women don’t establish the right networks
The fifth misconception is that women fail to build the right networks as entrepreneurs. Research shows women tend to develop more formal mentoring and networking relationships, such as through professional associations, while men typically have a mix of both formal and informal connections.
Formal mentoring often offers fewer career development benefits compared to informal connections. Women are less likely to engage in informal mentoring, not because they lack interest or ability, but because there are fewer women entrepreneurs to connect with.
Despite this, women are actually more active than men in supporting others’ careers, both men and women.
These misconceptions about women entrepreneurs are rooted in the historically masculine nature of entrepreneurship and can be barriers to women becoming successful entrepreneurs. By challenging these stereotypes and promoting gender inclusivity in entrepreneurship, we can help remove obstacles and create a more supportive environment for women entrepreneurs.
Provided by The Conversation
