Women’s Challenges in Setting Up Businesses

Do you dream of becoming a woman entrepreneur? Well, you may need to consider some significant challenges. According to MIWE (Mastercard Index of Women Entrepreneurs), businesswomen in 65 economies worldwide during 2021 had to face some major obstacles.

It is worth noting that, in the first place, women were more affected by the pandemic than men. In other words, 64% of women were affected in terms of work compared to 52% of men. However, women are highly resilient and seem to be optimistic about the future. But what are these challenges to be taken into account? We will tell you about them below.

Formalization of Companies

It should be noted that, in the case of Latin America, there was a decrease in entrepreneurial activity in general. However, the percentage of women who decided to become entrepreneurs increased significantly. For example, there were 9.3% of women entrepreneurs in Colombia, compared to 8.4% of men.

This had to do with state programs, as was the case with Law 2125 of 2021. The "Creo en Ti" law sought to strengthen the creation of micro, small and medium-sized women's enterprises. Consequently, there was a first challenge that they had to overcome, which was the formalization of their enterprises.

In other words, many women used to have a problem: Taking a step toward creating a business. Possibly, they were successful with their ventures, primarily through social networks. However, they did not know how to take it further, hire other people, become a formal company, and increase profitability.

Acquisition of New Knowledge

It must be taken into account that new knowledge is needed for a woman to launch her business. This does not always have to be something overly technical, but also about the company's management. Let's take as an example a clothing venture on social networks.

Women may have a lot of knowledge about interacting with other women in need of apparel. When customers request products, they sell them to them by arranging a face-to-face meeting. However, when demand increases, they feel unprepared to adapt to change.

For example, they will have to learn how to build a customer database, an online store with their products, and even automated customer service systems. Therefore, to go a step further in consolidating a business, they will have to overcome these barriers and increase their business knowledge.

Also read: DIGITALIZE YOUR ENTREPRENEURSHIP TO OBTAIN SUCCESS

The Possibility of Having the Necessary Money

Finally, it must also be taken into account that taking the step to create a company implies having money. That is to say, it is one thing to have an informal enterprise and another to have a consolidated company. For the latter, it is essential to be able to save, both with the enterprise and with the main work activity.

However, it should be noted that women save better than men. According to Women's World Banking, 52% of women manage money well. However, there is a problem: Not all of them tend to save, mainly because, in some households, men are in charge of the finances.

For example, in Latin America, 51% of women have a bank account. However, only 1 in 10 of them has savings. Most of them use that money for day-to-day expenses and do not allow themselves to save money for investment. Therefore, the idea is that they can improve their financial capacity to formalize a company.