Risky business: Female entrepreneurs eye economic growth

If you think female entrepreneurs are afraid of risk, you’re wrong.

According to Janice McDonald, Startup Canada’s 2017 Ambassador for Women Entrepreneurship and the owner of several businesses, women in Canada are just as likely to take on risk as their male counterparts. And when they do, says McDonald, they’re even more likely to succeed.

“I’m a strong advocate for women in business, and work hard to be a positive role model for women across the country,” McDonald said.

“Women entrepreneurs are vital to Canada’s economy. They contribute billions of dollars to the economy every year, employ more than 1.5 million Canadians, and report the highest instances of average yearly revenue growth of more than 20 per cent.”

In fact, according to a study released by Carleton University and The Beacon Agency, a consulting firm that specializes in innovation and increasing female entrepreneurship, the number of self-employed women in Canada who take on risk and own an incorporated business more than doubled in the past two decades.

Shyra Barberstock (left) and Janice McDonald (centre) Speaking at roundtable on International Women’s Day [Photo © Lindsay Bright]

“Women entrepreneurs have been perceived as risk-averse,” McDonald said. “Old ideas remain because they don’t get challenged. Our national study did some myth-busting in this area. We heard consistently that access to capital was a particular challenge to women entrepreneurs.”

The study, which McDonald co-authored, also shows the total number of women-owned businesses in Canada rose from just over 150,000 in 1996 to more than 315,000 in 2014 – the most recent year data is available. In total, more than 950,000 women in Canada are currently self-employed.

Released to coincide with International Women’s Day, the study cites government of Canada figures that shows 47 per cent of all small- and medium-sized enterprises in Canada are either fully or partially owned by women. According to Statistics Canada, a small- and medium-sized enterprise, or SME, has between 1 and 499 employees and less than $50 million in annual revenue.

“Female entrepreneurs are ambitious and want to grow their business, making risk related decisions that are necessary to achieve their objectives,” the report says.

Yet despite this fact, McDonald says financial institutions and investors have not fully understood or supported the needs of women-owned start-ups in Canada.

In addition to looking at increases in female entrepreneurship, the study also considered public perception of self-employed women.

Janice McDonald (left) and Minister of Public Services and Procurement Judy Foote (right). [Photo © Startup Canada]

Of the 100 male and female entrepreneurs and employment experts surveyed for the study, 80 per cent believed women face obstacles when trying to secure loans from a bank.

Still, the study shows that when starting a business, female entrepreneurs are just as likely, if not more likely, to succeed in terms of economic growth and innovation.

According to a 2011 Industry Canada survey, small and medium-sized businesses owned entirely by women grew at rates nearly equal to those owned by men.

The survey showed that 7.1 per cent of women-owned businesses had 20 per cent annual growth rates, compared to 7.8 per cent of male-owned businesses. Companies with majority — but not completely — female ownership had higher rates of 20 per cent annual growth – 7.3 per cent for primarily male-owned businesses versus 9 per cent for primarily female-owned.

The report also says that while female entrepreneurs are more likely to consider a “sense of self-sufficiency” and the benefits of developing healthy business relationships before making risk-involved decisions, they’re no less willing than men to accept risk as a necessary means of accomplishing their goals. The authors of the report cite the dramatic increase in women-owned corporations as evidence of this fact.

“I’m excited to use this platform to advance dialogue and action to support women entrepreneurs and business leaders in Canada,” said McDonald.

The report, which is being branded as a way of encouraging bankers and investment specialists to be more open to female entrepreneurship, makes several recommendations. These include re-evaluating the way financial institutions look at female entrepreneurship, considering a more “holistic understanding” of female-driven enterprises and their sustainable approach to business, and relying more heavily on accurate statistics and open communication when awarding loans and grants.