Study: Progress Toward Leveling the Playing Field for Women Entrepreneurs
By: Karl R. LaPan, President & CEO, Northeast Indiana Innovation Center
Women entrepreneurs are getting shortchanged in the start-up community workplace.This might not be a new revelation, but according to the 2016 American Express OPEN Small Business Monitor study released in April, male business owners pay themselves an average of $17,400 a year more than their female counterparts.
But perhaps more telling is the fact that just 42 percent of female entrepreneurs reported paying themselves anything, compared with 57 percent of men. That’s down from last year, when 50 percent of women entrepreneurs said they paid themselves a salary.
However, there is some good news. Though fewer women business owners are paying themselves, those who do have increased their pay. On average, female entrepreneurs are earning $63,590 this year—about a 1.5% increase over last year.
Although this study is insightful, it doesn’t offer any input as to why women are selling themselves short. Additional data from the study shows that female business owners are nothing but growth-minded. Two-thirds of women—compared with 74 percent of men— said they plan to grow their businesses this year, and they’re less likely than men—33 percent compared with 39 percent—to anticipate cash flow issues over the next six months.
So what’s the missing link? Why aren’t more women confident in their worth? It could be an issue of support systems, or lack thereof. The research shows that mentorship can play a significant role in developing successful entrepreneurs and instilling confidence. If women are unable to find such role models, they may not have the encouragement to take a step back and reflect on issues such as compensation.
Fortunately, in our community we have made the investment in mentoring. I am particularly proud of the fact that we at the Innovation Center have partnered with Diverse Talent Strategies to deliver virtual and high-quality engaging mentorship services. We know it is one of the key drivers of improved performance for women entrepreneurs.
The hope is that through participation in such targeted programs, more female business owners will recognize their worth and make the investment in themselves, which benefits everyone. Our goal for the WEOC program is nothing short of breaking the solo-preneurship cycle (keep in mind: 88% of all female businesses are solo-preneurs) and creating high performance, growing women and immigrant ventures. By doing so, we will level the playing field for women and men in terms of entrepreneurial pay.