More than 40% of Australian female entrepreneurs started their business with less than $5,000, a new survey reveals, but 51% now need capital to grow their business.
The survey, conducted by the Australian Women Chamber of Commerce and Industry, was open to women who own and operate their own business. A total of 2952 women were surveyed.
According to the report, 78% of the women surveyed left employment at a middle or upper management level in order to start their business.
A third of respondents (33%) employ staff, but only 27% of respondents have an annual turnover of more than $250,000.
Interestingly, 42% of respondents started their business with less than $5000, but 51% now require capital in order to grow their business.
According to AWCCI chief executive Yolanda Vega, the majority of Australian female entrepreneurs operate in service industries, which is partially why their start-up costs are so low.
“Women are more creative when it comes to utilising services,” Vega says.
“As one of my venture capitalists says to me, I always invest in women because I know they aren’t as reckless with money.”
“You can start up an internet site, and start selling online, with only a few hundred dollars.”
“Women don’t grow as fast because they are more conservative, but have a higher return on investment because they don’t spend as much.”
“However, they still need access to capital, access to markets and business capacity, and skills building to expand and grow.”
Vega says women often struggle to secure capital because venture capitalists and angel investors tend to overlook service industries. Home-based business are also perceived as less successful.
“We have this very negative connotation that if a woman is a mother and working from home, she’s not going to be successful,” Vega says.
“These women are assumed to be less productive if they’re at home looking after children.”
Vega says investors and lenders need to stop making assumptions about women in business, particularly at-home ‘mumpreneurs’. They also need to reconsider more traditional industries.
“They have to stop being blindfolded and look beyond the telco industry, and not assume that telcos are going to be the only ones to make money,” she says.
“We also need to educate women into making sure they do have the information and are prepared when they go to lenders so they don’t get knocked back.”
“They don’t tend to sell themselves as well as men do.”
“The AWCCI will [help] to ensure women are included in business programs and policy decision-making, and are able to procure contracts to guarantee revenue growth.”