Yes, South Africa has a skills shortage and entrepreneurs, and business owners are not immune to the knowledge gap.
In response, many programmes have been developed in the private and public sectors to up-skill generations of disenfranchised South Africans, especially women.
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No doubt, business incubators and accelerators that typically offer a suite of intensive support such as workshops, training, networking opportunities, coaching, and business counselling have contributed to empowering female entrepreneurs.
But there is a far more significant challenge faced by women entrepreneurs. I would argue that the unequal access to funding and investment for women-run businesses dwarfs the skills gap.
Numerous research studies have been conducted globally on the significance of entrepreneurship to the economy and specifically on the role of women in its growth. The findings suggest that greater economic participation by women stimulates economies, reduces poverty and creates jobs.
Entrepreneurship is a challenge, even more so if you are a woman. Despite their efforts and expertise, female entrepreneurs often struggle more than their male counterparts to make it big and get recognised within the business community.
I can draw from my own experience as a black female entrepreneur and the co-founder of Burgundy Fly, a fashion retail brand. I was naturally inclined to start a business as part of my life journey. Having fulfilled various corporate roles in the banking sector, I realised that if I was going to venture into business, my passion alone would not necessarily guarantee success.
I saw many adverts published by a reputable financial institution purporting "we support black female businesses" or "you can get funding" it was being punted all over. But it was more a "social washing" case than actual assistance.
In reality, when you approach these institutions, biases are exposed, some more prominent than others. It may have been limited to my perceptions, but there was still reminisce of subjectivity and partiality.
I remember crying in a meeting with my investor because of some issue. Although the matter was resolved, I realised there was a clear barrier, a lack of understanding of my business needs. I had a moment of self-doubt and asked myself if I was strong enough. Did I have the resilience, the grit?
Invariably irrespective of one's choice getting off the ground heavily depends on access to funding. So, running your own business requires you to have teeth, grit and stay in the game. The challenge comes when you are looking for capital and trying to convince investors to support you.
I have seen enough to know that a hefty dose of subjectivity is involved in the funding decision by venture capitalists and banks. It's more an art than a science.
Investment decisions are based on years of accumulated insights and experience- data points- complemented by facts and figures.
The problem with this process is the risk of cognitive bias. This is when individuals unconsciously create their own "subjective reality" based on hundreds of inputs that hinder their ability to see new opportunities.
Having the experience of working with the same demographic of entrepreneurs repeatedly, an unknown data point, such as a black female entrepreneur like myself, is indeterminate.
In operating a business in a retail industry, which is fashion, which is women, the people sitting on the other side of the table are most likely men, black or white, and may not understand my process, my purpose or my product.
Because of this reality, I believe that the traditional funding models don't necessarily serve the needs of all SMEs.
As revealed by research conducted in the UK while companies with a higher percentage of female leaders outperform those dominated by men, only 16% of small business employers and one in three entrepreneurs are women.
It also presented evidence that fewer women are granted access to financing and business loans, with just 15% of bank financing applications and 22% of new primary business bank account openings coming from women.
Despite the policies and measures implemented to promote gender equality, men still dominate the entrepreneurial ecosystem and banks. Financial institutions still consider women with fewer physical assets less creditworthy than men.
There are many positives of women-owned businesses and an increased focus on supporting female entrepreneurs in recent years. However, women are still starting businesses at a disproportionate rate to men, and there are still a distinct number of challenges that women continue to face.
According to a 2019 World Bank report, women entrepreneurs make or are obliged to make different decisions than men because of gender-specific constraints such as social norms, unequal legal frameworks, and differences in education, resources, assets and networks.
Social norms influence the strategic choices that female entrepreneurs make, such as their sector of operations. Women tend to operate in traditionally female-dominated sectors, even though male-dominated sectors tend to be more lucrative. Women who "cross-over" into male-dominated industries tend not to earn as much money as men do.
Emerging evidence suggests that sharing information with women on expected returns in traditionally male-dominated sectors and providing women with early exposure to these industries in the form of apprenticeships and male role models could help induce women to cross over into higher-return, male-dominated sectors.
There is little publicity about financial institutions investing in programmes to develop men in decision-making positions to eliminate the biases and attain better insight into the entrepreneurial mindset of women and their businesses so that they can harness the potential of that SME market.
So, thanks for rising to the skills challenge in South Africa, but we women now need confidence in the market to provide financial solutions to women-led businesses. I believe that until lending institutions are transformed this way, the path to success for women entrepreneurs will always be marred.