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Female entrepreneurs: Debunking myths
Following women’s month in August female entrepreneurship has come under the spotlight. We take a look at common myths about businesses owned by women and find the truth.
Businesses owned by women now account for a third of all entrepreneurs globally, according to the International Labour Organization. In South Africa approximately 72 percent of micro-enterprises and 40 percent of small enterprises are owned by women according to SEDA (Small Enterprise Development Agency). Women are running their own successful businesses in increasing numbers, including in traditionally male-dominated industries. However, research shows that some women are held back from reaching the top of their game by some very outdated myths. Jannie Rossouw, head of Sanlam Business Market, believes these myths around female entrepreneurship can definitely be dispelled:
Myth 1: Women are unlikely to be as successful as men in business
According to the 2012 Global Entrepreneurship Monitor (GEM) survey, women are more reluctant to grow their businesses beyond a certain scale, and are more afraid of failure than men. “As a result of this misconception, ventures started by women sometimes do not reach their full potential. Women-owned businesses do tend to be smaller than those run by men – they have fewer employees and lower turnover. But, according to the research, this is often the result of a lack of confidence in their own abilities. There really is no reason whatsoever for any disparity in success,” says Rossouw.
Myth 2: Women entrepreneurs should do everything themselves
“Every new business reaches a stage where employees need to be appointed. Entrepreneurs should then decide what their strengths are and stick to those, while hiring the right skills to complement their own. For example, if the business owner is a clothing designer who is not a very good salesperson, she could outsource this function.
“In our dealings with entrepreneurs we have often found women business owners are less likely to delegate, feeling instead that they need to do everything themselves. This can unfortunately
limit the growth and success of the business.”
Myth 3: The business is a good retirement plan
It is common for entrepreneurs, both men and women, to plough their profits back into their venture, believing that selling it one day will be enough to set them up for their golden years. This is an extremely risky retirement plan, says Rossouw. “For one, the business may not be nearly as valuable as anticipated 30 years from now. The price of a business is what someone else is prepared to pay for it. Or there may be an economic downturn. Or the business may be in an industry which will be phased out years from now due to technological advancements.”
Rossouw says it is of paramount importance for business owners to evaluate their unique financial planning needs. “They should obtain the services of a qualified financial adviser to help them in selecting the right investment vehicle to ensure optimal asset growth,” he concludes.