Today’s lists of the top entrepreneurs in the world are peppered with the names of powerful women. More than half the 30-Under-30 social entrepreneurs list put out this year by Forbes are women and Oprah, Martha Stewart, Ariana Huffington and Vera Wang are all instantly recognizable names to most of us. But it hasn’t always been that way.
Women in business have travelled an uphill road for decades, fighting wage gaps, unfair legislation and discriminatory attitudes in the workplace since entering it en masse first during the industrial boom of the 1880s through the 1920s. During the women’s liberation movement of the 1970s and for decades after, those obstacles have been slowly eroded yet remain in place for the new generation of female entrepreneurs. Along with familiar obstacles are some new ones that previous generations probably didn’t even plan for.
In this article, we’ll look at the obstacles that women in entrepreneurship have overcome to get where they are today and examine which ones remain. We’ll also examine the accomplishments of women in business then and now.
From the Domestic Sphere to the Workplace
A report by the Smithsonian Institute chronicling the advance of women into the workforce referred to pre-1880s America as a “cult of domesticity.” Women were raised to believe their place was in the home, taking care of the rest of the family. They were expected to be nurturers, unconcerned with life outside the domestic sphere of the household. The Smithsonian report put it like this:
“The tenets of the cult of domesticity held that women could best serve the political and social needs of the republic by dedicating their energies to the creation of healthful and nurturing households. Good homes managed by loving mothers would function as havens from a hard world for sons and husbands and as training grounds for daughters who would perpetuate the tradition of responsible motherhood.”
Even when women entered the workplace, those beliefs were still there, dictating what kind of work society thought was best for women to do. Women got jobs as dressmakers, food servers, nurses and midwives. Women gained a toehold in the professional world, but it was still dictated to some degree by societal standards about what it was to be female.
With the industrial boom of the 1880s through the 1920s, large companies in sectors like agriculture and chemical production were formed, and those companies needed workers. More women moved outside the home but were still mostly relegated to jobs as factory workers or secretaries in the corporate world; “helpmate” roles, as Boston University Professor Regina Blaszczyk phrased it in the report.
As business expanded, government modernized and more women seized the opportunity to enter the working world, many women decided to combat the cult of domesticity by establishing their own companies. Estée Lauder, Dorothy Shaver and Freda Diamond all rose to prominence this way, as did America’s first female entrepreneur, Madam C.J. Walker, born Sarah Breedlove in 1867.
Madame C.J. Walker, for example, is considered the first successful American woman entrepreneur. Her company sold hair and beauty products made specifically for African-American women, and at the height of its success made the modern-day equivalent of millions in profit. With little formal education, Walker ended up developing her line of products as an antidote to the skin disorders and hair loss common at a time when few people had indoor plumbing and lye was included in many soaps. She built her business from the ground up, selling her products door to door until she was able to build a factory and maintain a staff of women dubbed “beauty culturalists.” Eventually, her company expanded beyond the U.S. into countries like Cuba, Jamaica and Panama.
Not all women could follow Walker’s example at the time. It took until 1988, when the Women’s Business Ownership Act was signed into law, for many of the archaic legal strictures placed around women’s economic freedom to be lifted. Before that, women had to have a male relative cosign their business loans.
Modern Day Barriers and Accomplishments in Female Entrepreneurship
Women looking to start their own businesses face obstacles even today. According to the World Economic Forum’s most recent Global Gender Gap Report, a 32 percent disparity still exists on average between the pay of men and the pay of women on the global level. That gap has gone down by a slight margin from last year, but the report remarks that there is still room for improvement. It states:
“This report finds that, globally, although many countries have achieved important milestones towards gender parity across education, health, economic and political systems, there remains much to be done.”
Data from December 2018 also shows that small businesses owned by women only receive 4.4 percent of the total amount loaned out to small businesses overall. This equates to around $1 in every $23 loaned. Women take home a little more in the conventional small business loan area (16%), but a woman-owned business looking for a loan is still less likely to get it overall than one owned by a man, even if they both have similar credit scores. In the venture capital space, women only take home around 2 percent of all the money invested: $1 in every $50 spent. According to Score’s Megaphone of Main Street data report, men were also more likely than women to even attempt to secure funding for their small businesses in the first place.
Despite those figures, the picture isn’t as grim for women in entrepreneurship as it may seem. Between 2017 and 2018, 1,821 women-owned businesses were opened per day, according to the 2018 State of Women-Owned Businesses Report commissioned by American Express. The data from that report stated the high volume of new businesses was the result of a mixture of necessity entrepreneurship and opportunity entrepreneurship.
Those who opened their business out of necessity did so because they could not find employment elsewhere and needed a source of income. This was particularly apparent among women of color who, from 2007 to 2018, suffered with higher unemployment rates, longer spans of unemployment and a racial pay gap in addition to the gender pay disparity. Today, almost half of all women-owned businesses are owned by women of color. Twenty percent of all women-owned businesses are owned by African-American women, 17 percent by Latina women and nine percent by Asian-American women.
Women-owned businesses today employ over nine million people, up 21.2 percent from 2007 numbers, according to the American Express report, and collectively bring in over one billion dollars in revenue. Women-owned businesses that generated over $100,000 in revenue numbered over 600,000.
Women are also branching out into areas not typically associated with female-owned businesses. Women-owned businesses in the utilities sector grew 151 percent since 2007; 94 percent in the construction sector for the same time period; and 70 percent in the administrative, support and waste management sectors. These businesses thrived in populous southern states like Texas and Georgia this year, but also in smaller states like the Dakotas.
Though work still needs to be done in closing the gender pay gap and fundraising disparity between men and women, eliminating those gaps seems more possible now than ever.
Improving Success Rates as a Female Entrepreneur
Women-owned businesses today seem to be doing better than they have at any point before, but there are still challenges that impede their success.
“It was a very hard road,” Amy Freeman, co-founder and CEO of The Spice and Tea Exchange said in an interview with CNBC. Already at an arguable disadvantage as a female entrepreneur, Freeman felt she faced more roadblocks because of her lack of formal business education. With one, she said, “I would’ve known how to build that structure. I would’ve had resources to tap into.”
To secure funding for her company, Freeman had to teach herself how to develop marketing strategies, balance books and do basic accounting as well as write business plans and proposals. These are all topics you can learn with an online MBA from Virginia Wesleyan University. Our affordable program focuses on hands-on practice and lively discussion of business principles. The online format emphasizes flexibility so you can fit your education into your already busy life.