As a woman entrepreneur, embarking on the journey of building and growing your business is an exhilarating endeavor. Yet, it’s no secret that the road to success can be paved with challenges, and one major obstacle many women face is navigating the world of borrowing and debt. In a recent conversation hosted by Shauna Frederick, Alison Kirkland, the CEO of the Women’s Enterprise Organizations of Canada (WEOC), delved into these challenges and opportunities with a laser focus on understanding the perceptions surrounding debt and funding.
The Challenge of Borrowing and Debt
The entrepreneurial path is seldom smooth, and for women entrepreneurs, borrowing and managing debt can add a layer of complexity. It’s not uncommon to experience initial feelings of nervousness, anxiety, discomfort, and overwhelm when considering financial options. This leaves many at a crossroads, pondering whether to bootstrap their venture or take the leap and borrow capital.
The Importance of Research
Recognizing the need to comprehend the unique experiences and perceptions of women entrepreneurs in accessing capital, WEOC embarked on a groundbreaking research project. Over a thousand women participated in this study, providing invaluable insights into their borrowing experiences and attitudes towards debt. The research aimed to uncover the mental models and perceptions influencing their funding decisions.
Mental Models and Perceptions
The research unearthed several mental models and perceptions that shaped women entrepreneurs’ choices when it came to funding. Some of these included the belief that lenders wouldn’t support individuals like them, the perception that their business stage or industry wouldn’t attract funding, a discomfort with owing money, and a general fear of debt. These perceptions, while sometimes valid, could deter women from seeking capital, even when it was necessary for the growth of their businesses. This highlighted the importance of challenging and reevaluating these beliefs.
Self-Funding as the Default Option
The study found that self-funding was the default option for many women entrepreneurs in Canada, despite their ambitions for growth. This exposed a gap between their aspirations and their funding strategies. While self-funding feels comfortable and secure, it might not always be the most effective approach for achieving significant business growth.
Changing the Landscape
WEOC’s work seeks to transform the way women entrepreneurs access financial capital. The research serves as a foundation for discussions with financial institutions and lenders to address the perceptions and barriers women face. It challenges the necessity of certain policies and procedures and encourages the removal of unnecessary obstacles in the lending process. Furthermore, WEOC provides support and resources to help women entrepreneurs navigate the financial aspects of their businesses, including business planning, budgeting, and understanding the difference between good and bad debt. The organization strives to create a supportive ecosystem that empowers women entrepreneurs to achieve their goals.
Addressing Gender-Specific Challenges
The conversation began by acknowledging that women entrepreneurs often contend with unique challenges when it comes to accessing funding and managing debt. Personal experiences and the impact of family responsibilities, such as caring for children and aging parents, were recognized as factors that could affect an entrepreneur’s financial journey. The conversation emphasized the need to consider these gender-specific dynamics when evaluating an entrepreneur’s financial situation.
The Role of Education and Collaboration
The conversation emphasized the importance of education, knowledge development, and openness to feedback for both entrepreneurs and lenders. It was acknowledged that business plans and budgets, while sometimes seen as cumbersome, are essential tools for entrepreneurs. They help articulate plans, identify weaknesses, and provide a roadmap for success. Collaboration between lenders, advisors, and entrepreneurs was highlighted as the path toward creating a more supportive environment for women entrepreneurs.
“I think it really illustrates how smart women are when they ask for help. They know they don’t know everything, so build a team around you that can support you, and there are resources for that.” – Alison Kirkland
Positive Outlook for Change
Alison expressed optimism about the enthusiastic response from funders who have embraced the findings of the Bootstrap and Borrow Report. While change takes time, the fact that key stakeholders are receptive to the realities faced by women entrepreneurs provides hope for meaningful progress.
In conclusion, the conversation with Alison Kirkland shed light on the multifaceted challenges women entrepreneurs face in Canada. It highlighted the importance of acknowledging gender-specific hurdles, challenging traditional viewpoints, and fostering collaboration among stakeholders to create a more equitable and supportive environment for women entrepreneurs to thrive. For entrepreneurs, advisors, and lenders alike, it’s crucial to recognize and understand these barriers and actively work toward removing them, ultimately paving the way for women to thrive in the world of business.
Full Bootstrap vs Borrow Research Document: https://weoc.ca/site-content/uploads/2022/11/WEOC_Bootstrap-or-Borrow_FINAL-EN.pdf#:~:text=Research%20from%20the%20field%20of%20behavioural%20economics%20makes,in%20light%20of%20key%20concepts%20from%20behavioural%20economics.
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