Small businesses are the backbone of the American economy. They not only provide jobs and contribute to building local communities but they’re also key to helping families take charge of their financial futures.
Out of all small businesses, women-owned businesses have a particularly important role to play. In developing countries, empowering women-owned businesses is one of the key ways to bring prosperity to communities and generate economic opportunities for future generations.
Women tend to have a major influence on their families and how their kids are raised. Female entrepreneurs not only benefit their communities at large, but they also inspire their children and families to reach for more.
Today, we’re going to look at how to support women-owned businesses in four ways.
Why you should support women-owned businesses
There’s an infinite number of reasons as to why you should support women-owned businesses. Here are some reasons why you should be supporting and investing in women-owned businesses as well as a look into some of the unique opportunities they bring in.
Promote economic growth
It’s well-documented that women in developing countries can escape poverty and improve their country’s economic condition through entrepreneurship. A study by the McKinsey Global Institute found that advancing women’s equality could add $12 trillion to the global economy by 2025.
However, female entrepreneurs also have a critical role to play in the economic growth in more developed countries, like the United States. Women-owned businesses in the U.S. generate about $1.8 trillion a year. Female entrepreneurs can be found in all types of industries and in a wide range of companies, from Fortune 500 firms to local mom-and-pop shops.
But it’s within local communities where female entrepreneurs can make the biggest impacts in terms of boosting prosperity. Women are oftentimes active members in their communities and know exactly what their neighborhoods need to succeed. When you support women-owned businesses, you’re also supporting economic growth and job creation.
Reinvest in families and communities
Compared to men, women are more likely to reinvest their income by putting it towards their family and their communities. The money women earn often goes back into clothing, feeding, and educating children. Women often reinvest 90% of their money back into their families and communities, whereas this value only amounts to 35% for men.
Women are also more likely to save their money and create a financial safety net, which can help their families ride out difficult financial times. When female entrepreneurs succeed, they bring benefits to everyone around them.
Women-owned businesses also play a critical role in supporting children. Did you know that 62% of women entrepreneurs cite their business as their primary source of income? Many of these women are likely to be single moms, which means their income is directly going towards supporting their children and their future generations as a result.
Boost opportunities for moms and women
In a country where paid maternity leave isn’t a requirement, many women are oftentimes forced to choose between their children and their careers. Women-owned businesses offer women and moms new types of opportunities. They can provide a kind of work-life balance, flexibility, and financial freedom unavailable in the traditional workforce.
This allows women to balance motherhood with also being able to support their families and kids. The result is children receiving better care now while also being raised by more fulfilled, financially-stable parents. The benefits will be reaped for years to come.
Put your money towards diversity
Multiple, diverse perspectives offer a ton of benefits in various fields, but this is especially true in entrepreneurship. For example, there are known biases in the car industry when testing cars for crashes.
The car industry simply didn’t make crash test dummies that fit the dimensions of a typical woman’s body. The result? More women have died in car accidents. Supporting women-owned businesses means more women will be at the table making decisions.
Seek out innovation
It’s not just a matter of diversity, but it is imperative for innovation. Men and women think differently. There have to be women in all facets of the economy if we want to create a well-rounded workplace.
Innovation can only happen when there’s diversity. If women-owned businesses fail, then we end up missing out on innovative opportunities.
Improve the access to capital
Women-owned businesses and female entrepreneurs are offered smaller loans with higher interest rates than men. As support increases for women-owned businesses and more women start their own businesses, we can increase capital for women. Fair access to capital is essential for all businesses.
4 tips to support women-owned businesses
We compiled a list of ways for you to get started with supporting women-owned businesses. You’re not only helping women, but you’re also supporting small businesses with these tips.
1. Shop certified women-owned bands
Show your support by spending money on women-owned businesses. It’s the best way to do your part. Not sure where to start? There are organizations that certify women-owned companies to take a lot of the guesswork out of where to shop. The best way to promote equality for all is to put your money on it.
2. Invest in women-owned businesses
Investing in women-owned businesses will require more money but it will also have a big effect on women-owned businesses. They typically receive less than half of the money than male-owned businesses. In addition, loans for women’s businesses tend to have higher interest rates and have to be paid back faster. You can invest directly into a small business or seek out stocks for companies that are women-owned.
3. Show support on social media
If you’re feeling a little strapped on cash but you still want to help women-owned businesses, you can always do your part on social media. It’s a free and effective way to show your support for female entrepreneurs and boost their businesses.
Search for women-owned businesses with relevant hashtags and make sure to follow, like, comment, and share. Reviews also go far on sites like Facebook, Google, and Yelp. It doesn’t cost a thing to stop and write a review, but the social proof will bring more customers to that business.
4. Share your network and resources
There are a lot of ways professionals can share their networks and resources. Often, we aren’t even aware that we have these resources, but women in under-represented industries lack these things. So, start by mentoring women entrepreneurs in your field.
If you have experience and perspective, this relationship can be beneficial to women-owned businesses. If you hear about an upcoming networking event, let female business owners know about it, too. There are so many opportunities that women aren’t aware of, and support is needed within all industries.
Want to do more to support women-owned businesses?
There’s power in communities. Don’t be afraid to share some of your favorite women-owned businesses or brands with your friends and family. Encouraging those around you to shop at small businesses and women-owned businesses will only help multiply the benefits.