Picture this: a successful, profitable business is poised for significant growth and expansion - a business owner’s dream position. The next obvious step is to seek out financing to facilitate that expansion. Acceptance is a given. Or is it? Apparently not if you’re a female business owner.
Moving into the next decade of the 21st century, it’s difficult to understand that women-led and/or owned companies struggle to find investment capital because of their gender.
Unfortunately, it is still all too real.
According to a Statistics Canada 2017 report, female-led businesses are growing faster than male-led businesses, says Inder Mandar, Tax Manager at Manning Elliott LLP.
Interesting and positive news, but what isn’t reflected in that achievement is the deficit commitment of investment dollars. Mandar says that women-led companies receive only four to eight per cent of venture capital funding in Canada.
According to Mandar, various studies have found that if women receive investment funds, they gain nearly twice as much revenue per dollar for the funds they receive as an initial investment.
“Even though they are receiving less investment dollars, female companies earn more revenue per dollar with the investment they do get,” Mandar explains.
With still so much focus of women’s role in the workplace and lack of pay equity, it seems baffling that there is such a glaringly-wide disparity between female and male-led businesses when it comes to obtaining funding.
“I think a lot of it has to do with unconscious bias,” Mandar observes. “A lot of the people who make decisions in companies, as to where funds go, are still men. As much as times are changing, we still see unconscious bias, we still see gender bias within corporations, within companies, essentially everywhere.”
Mandar discovered finances are a primary concern for women business owners when she attended the women’s networking Rise Conference this past October. Expecting feel-good stories and personal testimonials about their successes, Mandar was surprised at how finances were at the forefront of discussions.
“Their concerns were about how to raise money, how to fund their business, how to grow their business, and how to expand their business,” she recalls.
They were looking for advice on whether to seek outside funding and where to go or if they should invest their own money. All these concerns are in the context of women creating and running successful enterprises despite being often refused investment funding or receiving less than expected. Mandar says there is still a general perception that females aren’t financially literate and aren’t taken as seriously as male business owners.
“I think women have to fight harder for their investment money. So, when they do receive it, there is almost a pressure to make sure you perform. If you miss out on this chance, the chances of getting more financing can be that much harder,” Mandar says of the achievements of women-led companies. “Many studies have found that men are judged based on potential and women are judged on proven capabilities – which is why there can be more pressure on women to succeed.”
Yet, not all is bleak going forward.
In the 2018 budget, the federal government announced a $2 billion strategy to double the number of women-owned businesses by 2025. Stats Can reports that there are about 309,000 small to medium size female-owned businesses compared to more than one million similar size male-owned businesses.
“The challenges that women face in the business world are unique to women. We have progressed a lot in the last few decades but we’re still not where we should be,” Mandar says. “The most recent World Economic Forum report estimates it’s going to take over 200 years to bring parity in the workplace.”
One way to effect change for women business owners is being mindful of supporting those businesses to ensure their continued success. The holiday season, a time of year when consumer spending is high, is also an opportunity to shop women-owned businesses. A simple Web search is a great source for finding those companies—local and national ones.
As an accounting and business advisory firm, Manning Elliott recognizes that seeing women succeed in business is integral to the country’s overall economic wellbeing. Manning Elliott supports and participates as a sponsor at various women in business events throughout the year, such as the Surrey Board of Trade Women in Business Awards and the CPABC CBA Women’s Forum Networking Dinner.
“We have a dedicated business development group which focuses on providing business advisory services to female entrepreneurs, professionals and women with wealth,” Mandar explains. “We hosted our kick-off event in September during Gender Equality week, bringing together a group of women who are excelling in their fields for an evening of connection and conversation.”
For more information about Manning Elliott’s unique advisory services, go to https://manningelliott.com.
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