Risk Management Strategies and Financial Resources for Women Entrepreneurs
Challenges of Being a Female Entrepreneur
Female Leadership and Risk
Risk Management Strategies for Female Entrepreneurs
Conducting a Risk Assessment and Developing a Response Plan
Implementing Risk Management Strategies
Resources for Female Entrepreneurs
Grants, Funding, and Accelerators
Advocacy, Education, and Networking
Blogs and Magazines
Women who are entrepreneurs or who are interested in entrepreneurship can offer unique insights within their industry, but also may face unique challenges. While there has been consistent growth for women-owned businesses, they still only accounted for 19.9% of organizations with employees in 2018.
However, the gap between women-owned for-profit businesses and other organizations can vary greatly depending on the industry. For example, women-owned for-profits are highly represented in the healthcare and social assistance sectors, while they are relatively rare in the finance and insurance sectors.
For women-owned businesses to reach parity with their counterparts, it is important for female entrepreneurs to be aware of their resources. Education about business startup best practices such as how to properly conduct a risk assessment can further empower prospective female entrepreneurs. What’s more, it is important for female entrepreneurs to be aware of the unique challenges they may face and how to address them.
Challenges of Being a Female Entrepreneur
The following are some of the challenges that women who are entrepreneurs or who are seeking entrepreneurship opportunities may face:
- Social expectations: Social expectations related to gender may create obstacles for prospective female entrepreneurs in several ways. For example, potential mentors may undervalue them compared to male mentees or they may be seen as less mentally or emotionally capable. In some cases, other people may even think that entrepreneurship isn’t an appropriate role for women in society due to cultural or religious beliefs.
- Access to funding: Because women have traditionally not had as much autonomy and leverage in the business world, funding is needed to even the playing field. Funding can help jumpstart women-owned businesses directly, provide educational opportunities, and help build support networks.
- Availability of support networks: Support networks are an important key to success. In many industries such as STEM-related sectors, the majority of people involved in organizations are male. As such, potential professors, colleagues, and bosses are likely to be male. By providing support networks that are filled with female mentors or mentors who are otherwise invested in uplifting potential female entrepreneurs, organizations can challenge the status quo.
- Work-family balance: Traditionally, women have been the primary caretakers of the household. Additionally, they need time off from work for rest and recovery before, during, and after childbirth. Female entrepreneurs may need more flexible work schedules to facilitate their success.
- Confidence: Because women have been a minority in the business world for a long time, they may not naturally have the confidence to operate assertively. Furthermore, they may have been taught from typical social interactions to be passive. It is important that women work to build their confidence when they are planning to enter an entrepreneurial role.
While other demographics may also experience some or all of these barriers, women may face them at a greater rate or in ways that are more significantly obstructive to their goals. Women who are part of minority groups may experience even greater hurdles.
Female Leadership and Risk
There are many myths about risk management that float around the business world and the community conscious. However, one commonly held belief about risk has substantial supporting evidence: women, on average, are more risk-averse than men. Debate continues as to whether this phenomenon is based more so on genetic or social factors, but the outcome remains the same. Furthermore, it can be both a benefit and a detriment in the business world.
While lower risk aversion and greater optimism can garner greater gains in shorter periods, it is a gamble. It can also cause great losses in a short amount of time, or poorly developed safety nets. Meanwhile, while extreme risk aversion can be a limiting factor, women’s heightened wariness of risk can lend to a stable and canny approach to business that may contribute to steady gains and lower chance of large-scale losses.
Risk Management Strategies for Female Entrepreneurs
Risk management is the process of identifying and categorizing business risks, as well as developing comprehensive response and recovery strategies. Any business can benefit greatly from developing a risk management strategy, particularly in an age when digital threats are becoming more and more prevalent. As such, it is vital that women entrepreneurs are aware of the importance of risk management and how to implement it. By doing so, women in business can secure their investments and improve their chances of long-term success.
Conducting a Risk Assessment and Developing a Response Plan
The specifics of how your business will go about conducting a risk assessment and building an associated response plan will depend on the particulars of the specific organization. However, some basic steps apply to basically any risk assessment and response plan development process:
- Evaluate assets;
- Identify risks;
- Determine the likelihood of each risk;
- Determine which parties may be impacted;
- Prioritize risks;
- Record your results;
- Conduct a professional review of your findings;
- Determine what security resources you have available;
- Determine what security resources you will need;
- Identify useful analytics software and data systems related to risk analysis and management;
- Build IT management and security teams as needed;
- Create protocols for risk prevention;
- Create protocols for risk response;
- Build training programs for employees.
As mentioned, many of the risks associated with business ownership in the modern day have to do with cyberthreats. As such, cybersecurity measures such as regular system updates will be a vital element of risk management. Software can also be used to reduce the cost associated with business risks. For example, an insurance company can reduce the cost of claims processing with the right software.
Implementing Risk Management Strategies
Implementing a risk management strategy, while useful, can be highly disruptive to business operations. As such, it is important to introduce the new measures with care to smoothly integrate the new risk management strategies. Helpful steps for implementing these strategies may include:
- Creating a dedicated task force for implementation;
- Establishing blocks of time dedicated to training;
- Ensuring that there is clear and regular communication about expectations;
- Ensuring that necessary resources are available to employees;
- Mandating regular refresher training;
- Asking for regular feedback from employees;
- Analyzing outcomes and adjusting the implementation strategy as necessary.
It will also be important to ensure that each employee is aware of what their specific role is in risk management, and what their expectations are. For example, each employee should know what information they do and do not have access to, as well as what the protocols are for accessing or sharing it.
Resources for Female Entrepreneurs
It is important for current or aspiring female entrepreneurs to be aware of the resources available to them. While generalized resources dedicated to supporting entrepreneurs may also be helpful, women-centric entrepreneurial resources can be uniquely suited to empowering female business leaders. These resources can benefit women entrepreneurs in a wide variety of ways, such as financial support, community support, and educational support.
Grants, Funding, and Accelerators
The following resources can assist women financially as they pursue entrepreneurial efforts:
- Amber Grant Foundation:
Every month, WomensNet grants $10,000 to a woman-owned business. One winner receives a further $25,000 at the end of the year.
- Cartier Women’s Initiative Awards program:
Each year, three women-owned businesses win grants of $100,000, $60,000, and $30,000.
- Economic Development Administration:
These centers found across the U.S. help individuals access state and federal funding for business.
- Grants.gov:
This database compiles federally sponsored grants, including those related to business development.
- IFundWomen:
This is a grant marketplace that connects donors with potential grantees.
- Small Business Development Centers:
These centers found around the U.S. help individuals find and assess potential grant opportunities for funding small businesses.
- Small Business Innovation Research and Small Business Technology Transfer programs:
These programs offer various grants to small businesses that contribute to federal research and development.
- SoGal Black Founder Startup Grant:
The SoGal Foundation offers grants of $5,000 and $10,000 to business owners who are Black women or nonbinary Black individuals.
- Women’s Business Centers:
These are SBA-sponsored centers around the U.S. that help women find and access funding for business development.
Advocacy, Education, and Networking
The following information and community resources can benefit female entrepreneurs:
Blogs and Magazines
The following publications can benefit female entrepreneurs:
- ForbesWomen:
This section of Forbes showcases successful female business leaders and analyzes their winning strategies.
- HER Magazine:
This magazine speaks to an audience of female leaders and entrepreneurs, and covers many topics related to personal and professional development.
- She Owns It:
This blog is dedicated to helping women ideate and reach their professional goals.
- Woman Entrepreneur:
This is a section of Entrepreneur that is focused on information relevant to female business leaders.
- Women On Business:
This blog explores information related to many facets of business, including productivity, career development, and marketing.
- Women Who Startup:
This blog is dedicated to providing helpful information and a networking platform for female entrepreneurs.
