Be Your Own Boss: How Women Can Climb the Ladder to Entrepreneurship
Starting a business is stressful and challenging for many business owners, and women entrepreneurs face challenges their male counterparts don’t. However, that doesn’t mean women shouldn’t start businesses—far from it!
Women have a proud history of entrepreneurship, and current and upcoming female entrepreneurs are standing on the shoulders of giants. Thanks to those who paved the way, the number of women-owned businesses is on the rise, and women supporting women is a major reason for this.
This guide discusses the history of women business owners, tips for success, and unique obstacles women entrepreneurs face. Read on to learn how to plan for, finance, and start your woman-owned business and explore additional resources to get you on the road to business success.
History of Women Business Owners in the U.S.
American women have run all sorts of businesses well before they were thought of as business owners. Although women often didn’t consider themselves entrepreneurs—a term usually reserved for men in the late nineteenth and early twentieth centuries—their “part-time projects” and “sidelines” were, indeed, business ventures.
In fact, by the 1870s, women were increasingly finding commercial success. In the beauty industry specifically, Lydia Pinkham was the first woman to put her image on her herbal remedy product in 1873, and Madame C.J. Walker became the first Black woman millionaire in American history with her hair care products line. Then, Elizabeth Arden almost singlehandedly started America’s beauty industry in 1910, without which beauty schools today may not even exist.
In the 1930s, Virginia Payne played “Ma Perkins” for 7,000 episodes of her radio soap opera to encourage young girls to become entrepreneurs—in an era when the glass ceiling might as well have been made of stone.
During World War II, many more women entered the workforce than ever before, which sparked an interest in business ownership—especially when women who still wanted to work lost their jobs to returning soldiers. In the 1950s, women embraced the rise of new consumer goods and the call of domesticity to launch home-based businesses that enabled them to take care of their homes and families while also being entrepreneurs.
Through the rest of the twentieth century, changing cultural and social landscapes led to even more opportunities for women business owners. As recently as 1988, Congress passed the Women’s Business Ownership Act that provided women entrepreneurs with resources and ended lending discrimination and state laws that required male relatives to sign women’s business loans.
Of course, the list would be thousands long if we named every prominent American female entrepreneur. Here are just a few other female-founded companies you may have heard of, along with their founders’ names and the years they began:
For every big name or company, there are hundreds of unsung heroines in the world of female entrepreneurship.
My definition of success is making a positive impact on the community around me. Whether it’s through employing others and providing them a safe place to work and ample opportunities or making people feel better about themselves by helping them feel confident in their skin, to me, success is making this positive impact.
The Rise of Female Entrepreneurs
And in the last few years, women have been flying higher and faster than ever before. According to The 2019 State of Women-Owned Business Report, between 2014 and 2019, the number of businesses in the U.S. grew by 9%, while women-owned businesses grew by 21%. In fact, from 2017 to 2019, there were over 1,821 net new women-owned businesses per day.
Today, women own about 12.3 million businesses nationwide, and women of color own half of women-owned businesses. In 2019, while women of color made up 39% of the total female population, they made up 89% of the daily net new women-owned businesses.
Important Industries for Women-Owned Businesses
Half of all businesses owned by women fall into three main industries.
Healthcare and Social Assistance
Child daycares, home healthcare services, and similar jobs have many women owners. Though these businesses don’t make as much money as other women-owned businesses, women entrepreneurs in this field are more likely to work full-time. With a growth rate of 14% from 2014-2019, this industry accounts for 15% of all women-owned companies.
Professional, Scientific, and Technical Services
This broad category includes architects, bookkeepers, consultants, lawyers, and public relations specialists. Many women who run these businesses are “sidepreneurs,” meaning they run their businesses part-time and on their own schedules. Women-owned businesses in this category grew by 14% through 2019 and accounted for 13% of businesses owned by women.
These are service-oriented jobs, including cosmetology and pet care. Many jobs in this industry can be part-time or flexible, making them appealing to aspiring women business owners. The number of service businesses owned by women grew by 29% from 2014 to 2019, accounting for 22% of all women-owned businesses.
In addition to the above categories, other high-growth industries for women-owned businesses over the past several years include some careers women have traditionally been underrepresented in, including:
Tips for Success for Women Business Owners
Whether you already run a business or are in the process of starting one, you can take steps to increase your chances of success. Here’s how to get your business off the ground and keep it successful.
Build a Network
When imagining building a network, you might envision formal events with lots of handshaking and business card trading. However, networks can also be local groups of like-minded people who go out for coffee and determine if their skills and interests line up in a way that can benefit one another.
Ava Carmichael provides a list of 20 official networking groups created for female entrepreneurs. You can also check out Facebook groups, Twitter hashtags related to your goals, and other social media sites to find “your people.”
Let People Know You’re Opening a Business
Before you open up shop, be sure you let the community know. This could be anything from putting ads in local newsletters to creating (active) social media pages to, most importantly, telling your family and friends to spread the word.
Word of mouth is critical when opening a salon or other beauty business. If you have already built a client base at another company (and don’t have a “do not compete” agreement), let your favorite clients know when and why you’re leaving. You may end up with a solid customer base from day one!
You don’t have to be an extrovert to run a business, but faking it can help!
Kati Whitledge, a salon business coach, told Sunnystorm Marketing, “Just like we’re willing to go to our local chamber events and network and get to know people, we need to be willing to go to the local beauty schools, showing up at their career fairs, special events…we need to be present in that community face to face.”
Attending these events and other local ones, like bridal fairs, can get your business out there and potentially bring in new clients and job applicants.
Additionally, it’s important to make sure everyone feels welcome at the salon from the moment they make a reservation to when they leave by being friendly and outgoing, even on days you don’t feel like it.
Hire Your Dream Team
Even if you plan to work largely alone, such as running a one-person salon out of your home, you should bring on a dream team to help your business thrive. In addition to any employees within your business (e.g., other cosmetologists, salespeople, etc.), consider hiring the following:
Do you need all these people? Not necessarily. If you have training in these areas or have opened other businesses, you may not need all of them. However, it’s worth investigating these options to ensure your business is in the best shape possible from day one.
Note: Even if you have friends in these fields who may be willing to help, volunteering for private, for-profit businesses may be illegal, depending on the specific circumstances. Check your state and federal laws to see what you can and can’t do with people who would generally be willing to help you for free.
Know Your Audience
Define your target audience and buyer persona to ensure you advertise to the right people, in the right places, and the right ways. As you draw up your marketing plan, work on coming up with these descriptions:
As a business owner, it’s essential to never stop learning. This continued education can include professional development in your specific field, like learning new beauty techniques in your salon, or recognizing your weaker areas and taking classes in them.
For instance, are you struggling with social media marketing? Consider taking a class at a local community college or via an online freelancer.
Obstacles for Women Entrepreneurs
While all entrepreneurs face challenges, women business owners face unique difficulties when setting up and running a business.
Finding Money and Raising Funds
Women often have a more challenging time finding financing for their businesses, particularly in industries traditionally catering to women, as most investors are male.
For female entrepreneurs, when pitching to investors (I was in Silicon Valley, specifically) most of them were male, and had a hard time wrapping their head around the concept of ManiMe. They saw going to a salon as an activity that their wife or daughter enjoyed, and didn’t understand the pain points around getting professional manicures. For women, and those pitching an innovation in the beauty industry specifically, this is something to prepare for.
Do your research before applying for loans and grants. Then, make sure you’re beyond prepared for your pitch.
Perceived Self-Confidence and Expertise
Women often feel less able or trained than men regarding business ownership. As of 2019:
While it’s unfair, as the cliché goes, “Whatever women do they must do twice as well as men to be thought half as good.” However, the second part of the quote is often forgotten: “Luckily, this is not difficult.” Enter any business meeting with confidence!
Working hard to develop better self-confidence and build expertise can be helpful—but chances are you’re already better off than you think.
Building a Network
Building a network is essential to opening and running a business, but it’s also a challenge for many women.
The World Economic Forum says strategic marketing is more challenging for women than men. First, like attracts like, so many women in male-dominated industries have difficulty finding common ground with the people and decision-makers they need to network with.
Second, women usually have separate work and social networks and are less likely than men to hang out with people from their current jobs, who can be invaluable assets in building a new business. Finally, using networking can feel like “using people,” which women report having a more significant issue with than men.
To be clear: Networking is not using people! It’s asking for help, offering help in return, and building relationships.
Family and Work Balance
Work-life balance is both a challenge and an opportunity for female business owners.
Harvard Business Review (HBR) quotes author and journalist Amy Westervelt as saying, “We expect women to work like they don’t have children, and raise children as if they don’t work.” Women in this position end up feeling guilty, both when they’re working and when they’re not.
This type of guilt can stop women from taking the risk of starting a business. HBR’s article suggests:
How to Start a Business Checklist
Starting a business looks a bit different for every person. For instance, someone starting a business where they’ll employ other people may need to take different steps than those who plan to run solo.
1. Roughly Define Your Five W’s
2. Do Market Research to Determine Viability
Market research involves learning if your area has more demand than supply for your company, how much your competitors charge, and historical trends in your area.
3. Write a Business Plan
Create a business plan defining those W’s and include research and statistics wherever relevant. Additionally, you’ll need to determine things like costs and financial projections.
Note: You can further refine your business plan as you go. For instance, you may know you want your business located “downtown,” but you likely don’t yet know the exact address of the space you want to rent. You can use an average cost estimate for similarly sized spaces in that area, then make it more concrete later.
4. Figure Out Your Business Structure
Your business structure affects how you can get funding, pay your taxes, and more. You can choose to be a sole proprietor, be part of a partnership, run a corporation, or become a limited liability company (LLC).
5. Find the Money
Starting a business isn’t free; even people cleaning out their closets and selling items on eBay spend money upfront. Once you figure out your startup costs, decide the best route for paying those plus a bit extra for unexpected expenses.
6. Choose a Name and Register Your Business
Registering your business, particularly if you’re not naming it after yourself using your unique name, can keep your brand safe.
7. Get Tax IDs
You need a federal tax ID to do anything involving your business finances, including hiring employees, opening a bank account, paying taxes, and applying for permits and licenses. A lot of states require separate IDs as well.
8. Make Everything Legal
Depending on what you do, your business may need licenses or permits specific to your state or local area. Be sure to get the necessary insurance policies as well.
9. Start Operations
Business operations include marketing, setting up your space, hiring people, and, of course, beginning to provide services.
Financing Your Business
Starting a business costs money—even if you’re running a side hustle out of your home. Fortunately, there are many ways to fund a new business.
Small Business Loans for Women
Anyone can apply for a small business loan (though approval is never guaranteed). You can do this at most banks, credit unions, and online lending agencies.
However, loans do exist specifically for women-owned small businesses. The U.S. Small Business Administration (SBA) provides details about funding for such businesses, including a lender matching tool to help you find a place offering SBA-backed loans for women-owned businesses. You need to be certified as a Women-Owned Small Business (WOSB) to qualify for such loans.
Contrary to popular belief, the SBA doesn’t offer direct loans. They back loans from other lenders.
Otherwise, applying for small business loans is similar to applying for private student loans, except you need to include information about your business.
Venture Capital for Women Entrepreneurs
Venture capital for women-owned companies skyrocketed in 2021, partly due to an increase of female investors and lenders wanting to fund female-owned businesses specifically. But what is venture capital, and how do you get it?
Pitchbook defines venture capital as “a form of financing where capital is invested into a company, usually a startup or small business, in exchange for equity in the company.”
Acquiring venture capital is when an investor gives you money for your startup in exchange for partial ownership of the company (think of it like owning stock). In general, venture capitalists offer a relatively large amount of money, meaning this can be a valuable route to investigate even if the idea of giving up equity makes you nervous.
Applying for venture capital varies by the venture capitalist individual or organization you work with. However, almost universally, you need a solid business plan and to be able to prove your company is around for the long haul. A few venture capital groups for women business owners (or owned by women) are:
Small Business Grants for Women
Grants are free money to help you open or maintain your business. Each granting agency (which can include banks, community organizations, charities, and more—you’d be surprised by who wants to give away money!) has different requirements. However, you typically need to write a grant proposal, which can be quite long, so be sure to meet all requirements.
Like with SBA-backed small business loans, the federal government doesn’t offer small business grants directly. Though Grants.gov exists, it provides grants in exchange for working for federal programs, not running your own business.
Creative Ways of Getting Business Funding
Nydia Norville, the founder of Choiselle natural skin care line, says she partnered with local stores and boutiques and did pop-ups to generate sales and cash flow. Of course, this works best if you sell products, though you may be able to arrange services (according to local laws) or marketing partnerships, like offering coupons to each other’s businesses.
It’s never too late to start a business. Believe in yourself. Make sure you have a plan. Be able to adapt. Have a strong work ethic. Don’t compare yourself to others. Be patient. Start small. There will always be constant changes in a business. It’s a learning process. It’s not easy. It is not perfect.
Resources for Women Entrepreneurs
7 Small Business Hiring Mistakes to Avoid at All Costs
This article from Glassdoor gives seven crucial pieces of advice for hiring the best employees for your business.
The Story Exchange 1,000 Stories Campaign
This site tells the stories from female entrepreneurs worldwide, including tips and inspiration to help you on your way.
10 Things You Need to Do Before Starting Your Own Business
Constant Contact advises about what to do before opening your business.
Women’s Business Enterprise National Council (WBENC)
This organization advocates for female entrepreneurs, certifies women-owned businesses, and offers programs and events to further women’s business ownership.
National Association of Women Business Owners (NAWBO)
NAWBO has created networking and other opportunities for women entrepreneurs since 1975.
Beauty Schools Directory – Continuing Education
As learning is an integral part of business ownership, this article provides the information you need about continuing education in the beauty industry.
Do you need business training that won’t break the bank? LinkedIn Learning offers an array of courses as part of their premium membership.