The numbers are growing but women still face more hurdles than men
Female entrepreneurs aren’t just an important part of closing the gender gap, they are vital to the strength of our economy. In fact, research shows that improving women’s equality and encouraging women entrepreneurs in Canada has the potential to add $150 billion in GDP by 2026[1].
Women currently account for 37% of self-employed Canadians and are majority owners of approximately 17% of small and medium-sized enterprises according to the Women Entrepreneurship Knowledge Hub – a part of the government of Canada’s Women Entrepreneurship Strategy.
As we celebrate this year’s International Women’s Day, we acknowledge the significant steps women are taking to drive gender parity.
Why women choose to start their own businesses.
Becoming an entrepreneur isn’t easy, but women who choose this path often have several reasons in common.
To find independence
Many women see entrepreneurship as an opportunity to forge their own way and find autonomy. For Helen Siomos*, owner of Eye Candy Opticians, a thriving practice in Toronto’s Beaches neighbourhood, there was never any doubt that her business would be anything but successful.
“I started out my career working for other stores, but soon realized that I could do it myself – and do it better,” she says. “Having the freedom to make my own decisions and make this business my own has been huge for me.”
To explore a passion
Some women leave the corporate world to pursue a dream. For Lily Yee, owner of The Curated Market Co., a store that showcases and supports local artisans, starting her own business allowed her to help other artists flourish.
“The most rewarding part of my business is seeing other artists grow and evolve,” she says. “I’ve had the pleasure of working with many artists that were new to their craft and seeing them get better at what they do is one of my favourite things to be a part of.”
To achieve better balance
Women are often multi-taskers and caregivers, balancing raising children with caring for aging or ill parents. This scenario was the catalyst for Jen*, a former public relations manager, to make a significant life change and start her own practice.
“Running my own business has given me the freedom to choose the clients I want to work with and spend more quality time with family,” she says. “I feel like my entire work mindset has shifted and I’m now able to define my own course.”
Hurdles to success
Yet while the number of female entrepreneurs in Canada has grown over the past decade, women still face two key barriers that their male counterparts do not.
1. Gender gap
Although women have made great strides towards gender equality in recent years, men and women are still unequal in becoming entrepreneurs and growing their businesses. Overall, women are less likely to become entrepreneurs, and women-owned businesses are smaller than their men-owned counterparts. And the pay gap persists. A 2018 report[2] revealed that Canadian women who launch a business earn, on average, 58 per cent less than their male counterparts – due largely to difficulties in accessing venture capital.
2. Funding gap
Access to capital is a big factor in determining whether a business is successful, yet female entrepreneurs frequently face obstacles in securing funding for their ventures.
When Helen approached her bank for a loan to help launch her optical practice, she was turned down immediately.
As a single woman, still living at home with my parents at the time, I was basically told ‘good luck’ and offered no other options to secure financing. Thankfully my parents were able to help out, allowing me to launch the business on a smaller scale, but the rejection really made me question myself at the beginning. Am I not a sure bet?
Statistics show that 32% of women seek and receive funding versus men at 38%, and male-owned firms are more likely to receive venture capital or angel funding and other forms of leverage. As a result, many women use personal sources of financing to fund their businesses (83%) and this means they risk depleting their savings, remain more dependent on high-interest debt and could jeopardize their retirement plans.[3] Female entrepreneurs in this situation may have less of a personal capital reserve to fall back on, so making sure they have adequate insurance to provide income in case they are not able to work, as well as additional protection with a critical illness policy that pays a tax-free lump sum benefit, is particularly important.
Financial advice can help close the gaps
Protecting your own finances when starting a business comes down to planning and getting the right financial advice. An investment advisor can give you a fresh perspective on your current and projected finances as you launch your business and give you the tools you need to make informed borrowing and investing decisions.
So many women have competing priorities, particularly when running their own business … caring for children, looking after elderly parents … and personal finances can often take a backseat. I can’t stress enough the importance of starting to plan early – before your business takes off – to give both your venture and your future the best chance of success.
Sarah Widmeyer, SVP, Wealth Strategies at Richardson WealthFor many, the rewards still outweigh the trials
Despite the challenges she’s faced, like navigating the cyclical nature of retail and the logistical demands of managing two locations and a third in the works, Lily doesn’t regret the decision to strike out on her own.
“I feel empowered to be doing things my way,” she says, “and not have to answer to others on how I want my business to be or look like. It’s incredibly rewarding when someone tells me my story inspired them to do the same.”
Thinking about starting your own business?
Learn more about creating a financial plan, funding options, insurance and how to protect your finances by partnering with a Richardson Wealth Investment Advisor.
[1] Boston Consulting Group and the Cherie Blair Foundation (2019)
[2] New research reveals Canadian women entrepreneurs earn 58 per cent less than men (newswire.ca)
[3] DiversityInstituteAtRyersonUniversity-e.pdf (ourcommons.ca)
*All individuals and businesses mentioned in this article are used with permission.
