The Rise of the No-Option Entrepreneurs
What makes women turn to entrepreneurship? Also, does it seem like there are more and more amazing female business women around?
As soon as I arrived in India last June for my sister’s wedding, I was thrust into completing various levels of the game of getting wedding-ready. At each daunting stage of this Queer Eye: Indian Wedding edition, I found myself surrounded by several women. Female entrepreneurs and business owners to be exact, providing various services from Outfit Designs and Henna Art to Photography and Jewellery Rentals.
Though I cursed my sister for making me wear a sari and the oodles of accoutrements, I delighted in the conversations I now had access to. I admired these hard-working, self-starting women who had struck out on their own.
On the morning of the wedding, while struggling to keep exactly one eye open as the make-up artist applied mascara, I heard the business owner / lead artist say that she had left her corporate job to follow her passion for make-up art. My ears perked up at once. Intrigued, I subtly began questioning her motivations. I learned that she was not alone. A majority of the women who now owned wedding-related businesses had been white-collar workers in their previous lives. For some, it was a choice. For others, a necessity.
Of course, I knew that people occasionally left well-paying jobs to start their own businesses. But I had naively pictured only those with access to the certain kind of privilege and capital needed to do so. Suddenly, here I was meeting women from middle and lower-middle class backgrounds who were successful entrepreneurs in their own right. On top of that, they were also job makers, as they often employed a couple of other women at the least.
When I came back to the US, I again encountered this phenomenon. There were ex-white collar women everywhere: Luna’s doggy day care, our favorite Malaysian home-chef, the corner art store, the new panini place.
Awesome Fact: Globally, 1 in 3 entrepreneurs are women. (Circa 2022)
Since I was in a fairly exploratory position career-wise, I was even more interested in learning about these women. By a stroke of chance, I happened to pick up an amazing book called, “One Day I’ll Work for Myself“ which goes over the history of small businesses from the 1940s. What I learned via the book correlated well with the real life stories. Several factors drive women to entrepreneurship, ranging from flexibility in work hours to economic necessity. Moreover, these reasons have been repeating since the 1980s through the different boom-and-bust cycles of the economic system.
So What are The Reasons?
In the order of the obvious to the not-so-obvious ones:
1. Flexibility and Being the Own Boss:
Another fact check for me: majority of entrepreneurs are in their 30s and 40s. The image of the Zuckerberg-type entrepreneur needs to be burned for good. For these middle-aged women, the driving factor is usually the need to balance their home and work lives. The rigidity of the 9-5, lack of social support structures, and entrenched gendered divisions of labour within the home, have forced several women, through the past fifty years, to give up their jobs in favour of hours they can control.
Further, the fact that a majority of women feel this way exposes how Sheryl Sandberg type homes are far from the norm. Many women cannot afford to hire nannies or sitters to take care of their children during the day. They are forced to leave the workforce as our system does not provide them with adequate support. But the talent, ambition and need for income linger, pushing them to take on freelance work or start other solopreneur activities. Essentially, the kind of work they can do from home for a majority of the time.
2. Financial Growth:
Secondly, in response to the ever present wage-gap and toxic workplace politics, some women prefer to drop out and start their own ventures. Uninspiring jobs, uncompromising bosses and the inability to foresee future growth collude to convince these women to take the road less travelled.
Moreover, these women believe that they can make more money via their own businesses, which may or may not end up happening. In reality, it takes a while for any small business to generate reasonable returns. The data on success rates does not sound promising either: nearly 20% of small businesses fail within a year, 30% by the second year.
Historically, the financial challenges faced by female entrepreneurs have always been greater. They even find it difficult to get started. 60% of female entrepreneurs in 2021 ended up investing their own personal savings to start their businesses. Only one-third of women could get their private loans approved when compared to men. Additionally, in venture capital funding, only 1.9% of women-only teams received funding in 2022.
But this norm ignores other inspiring data: female-led businesses generate greater returns than male-led ones through a savvy combination of grit and inventiveness.
3. Laid Off:
The growth of female businesses in the early 1990s, 2009-2011, and 2020-2021, all have one thing in common: economic downturns and subsequent layoffs pushed a large number of women into entrepreneurship. We know that whenever layoffs happen women are typically affected in greater numbers than men, and they also encounter more barriers to re-entry. In such situations, individuals have no choice but to start their own business.
This statistic was strangely reassuring. My situation is really not as unique as I thought. And its inspring to see how women have found other ways to survive. The downside being that at least for a couple of years, women rake in lower wages compared to their previous white collar jobs and there is a level of uncertainty one has to deal with. They lose access to health insurance, 401(k)s and other benefits.
America is built to support large corporations and no matter the amount of praise heaped on small businesses, legislation and real change has been slow to support the SMEs1.
4. No Other Option:
The media flashes the public with rosy pictures of female entrepreneurship. The stories of these trail-blazing women follow a set action packed arc: they had a dream, they were hit with challenges and yet they brought it to fruition.
Of course, that may be the case for a privileged few. But there are even more people who are compelled to begin this arduous journey, and they may not always reach the promised happy ending. From the very beginning, economic and social inequalities leave some women far behind the start line. Lack of access to proper education and opportunities prevent many from entering the official workforce in the first place.
For generations, these women have made do with ingenuity and hard work. They provide essential care-giving, home cleaning and catering services. That is, they feed us, clean our homes, and take care of our loved ones. All these women are entrepreneurs in their own right. They provide labor in exchange for money and they take care of the entire finances themselves. They may be single moms. And they deserve the same respect that our society accords women like Sara Blakely, the founder of Spanx.
In Conclusion,
The glitter and glorification of entrepreneurship obscures the very real struggle faced by many of these women. It’s good to understand what exactly is driving these women and to help them get the support they need. Clearly, there are a myriad, complex and overlapping reasons that can push a regular woman towards taking on the risk of becoming a business owner.
In addition, an important point to note is that all these reasons can be traced to one underlying cause: the neoliberal economy and the white collar world are just not built to support women and their wonderful ambitions and needs.
Policy makers, business leaders, money lenders, and the general public need to be aware of these issues and take positive steps towards the advancement of women in business. Entrepreneurship is a risk. We should all do what we can to help alleviate that risk. Shopping local and looking for service providers within your neighborhood can go a long way towards helping such businesses.
Besides, female entrepreneurs overwhelmingly tend to start companies that serve the community. They focus on maximising social impact, they take care of their employees, and they serve as inspiring role models. They focus less on profits and more on the people and the planet.
During the wedding, I was also a witness to the sacrifices these women make in order to do their jobs well. The evening of the reception, I overheard (involuntarily) one of them telling her husband:
“I’ll be home late and I have to wake up at 3 am tomorrow to do prep work. Please take our son to school and feed him breakfast, just for tomorrow. I’ll pick him up.“
One Day I'll Work for Myself: The Dream and Delusion That Conquered America' by Benjamin C. Waterhouse.