We love the question “Why is Investing in Women Owned Businesses a Good Idea?” because there are so many good reasons to invest in a woman owned business.
Right now, we are witnessing exciting changes in the world of business. More and more savvy investors are interested in purpose-driven businesses, impact investing, angel investing, and women business owners. The internet has created new possibilities and opportunities for businesses to connect to suppliers, production houses, and customers.
Here are just a few of our favorite reasons why we think it’s not just a good idea – but a great idea to invest in women owned enterprises.
GROWING MARKET DEMAND
Climate change, humanitarian concerns, and the struggle of women are global headlines. The environment is at risk. We see the struggles of families around the world, and we want to help. The number of conscious consumers is growing. These mindful and well informed consumers are looking for ethical, sustainable, and fair trade companies with products and services that align with their values.
Women led companies with ethical products and fair trade practices are a match to the needs of these thoughtful consumers. Women owned businesses are positioned to take advantage of and ride the momentum of this growing market demand.
WOMEN KNOW WHEN IT FEELS RIGHT
You may not think of intuition as a business skill. But as business strategies become more innovative and progressive, the world is waking up to the power and importance of intuition in business.
It may be that little voice inside your head, or perhaps it’s a rush of adrenaline and a quick heartbeat. You may feel it in your gut or watch the hairs on your arm stand up. You may call it a gut instinct, your intuition, your 6th sense, or a pull to follow your heart. Whatever you call it, you know when something “just feels right.” As a woman, you know the accuracy and reliability of what we often call “women’s intuition.”
For example, how a conversation feels is as important as what is said. Did you know that 7% of a conversation is conveyed with the spoken word, 38% with the tone of voice, and 55% through body language. So, most experts agree that 70 to 93 percent of all communication is non-verbal.
Not a problem for women in business because a female entrepreneur is proficient at reading non-verbal cues like vocal tones, facial expressions, eye contact, and body language. Women can understand and intuit almost any situation and use her women’s intuition to determine what to do next.
The confidence to “follow your heart” and “go with your gut” are sought after qualities of an effective leader. Combine “women’s intuition” with the fact that the prefrontal cortex, the CEO part of the brain that governs judgment, planning, and organization, is more advanced in women than men, and you have the makings of a powerful female leader.
“Being different is a gift; it also makes me see things from outside the box. I don’t easily fall for lies; I can see through things.”
Technical skills and knowledge are critical to success. But more and more interest is being paid to the value of soft skills. Examples of soft skills are effective communication, self-awareness, critical and creative thinking. Even though these can be difficult to measure, they are becoming more and more valuable in business and have a growing impact on the bottom line. And once again, these are skills and talents that most women have at their fingertips.
Schools are creating academic curriculum around “21st Century Skills,” including creative and critical thinking and problem solving. The Human Centered Business model is also gaining traction in corporate and academic settings. The Human Centered Business model focuses on building successful enterprises that also improve society, serve the real needs of people and create jobs for the future that make use of creativity, communication, and empathy. Again, women leaders not only understand the importance of Human Centered Businesses, they have the natural skills to implement them.
“My job now is to try and help people understand every one of us makes a difference. And cumulatively, wise choices in how we act each day can help to begin to change the world.”
WOMEN WORK TOGETHER
Some women call it their tribe, their team, their squad, or their mastermind group. The idea of having a select group of colleagues to help support business and personal growth and success is part of their business strategy.
As one woman entrepreneur reports: “Not only do we support each other, but we act as connectors to people and opportunities. Whenever one of us comes across a great opportunity, we immediately send it to each other. It is amazing to be part of a group of women who want you to be your very best and actively help you to succeed.”
With the majority of women owned businesses committed to creating impact as well as financial success, there is a strong, shared belief that we are more powerful working together.
“There is a special place in hell for women who don’t help other women.”
WOMEN IMPACT THE WORLD AROUND THEM
It is no surprise that when women succeed, they share their success. Investments in women have a “ripple” effect. Researchers have found that women are more likely than men to put their income back into their families and communities. With business success, women can provide better care for their children, support their education, and pass on the values and principles of good business. As successful business women, they serve as role models and mentors to younger women.
Muhammad Yunus, who was awarded the Nobel Peace Prize for founding the Grameen Bank and pioneering microcredit and microfinance, confirms that women are more likely to invest their money into their children’s health and education.
Women also see the big picture. As global and climate issues expand, women wonder what kind of future their children and grandchildren will inherit. They stay informed and make choices based not just on the price and quality of a product but also the environmental impact of the production cycle. Women now want to know: Who made it? What is it made of? How was it made?
“I think realizing that you’re not alone, that you are standing with millions of your sisters around the world is vital.”
WOMEN BUSINESS OWNERS & WOMEN CONSUMERS
Women in the US drive over 80% of all buying decisions and consumer purchases. Therefore we can assume that women entrepreneurs are also women shoppers. As shoppers, they understand the needs of consumers and how to market and position their products and services to appeal to female consumers.
Women business owners are sensitive to style, user experience, quality, positioning, messaging, and marketing. They know how to emotionally connect with their customers, turning them into loyal fans. Women business owners also belong to professional and personal groups and readily share their opinions and recommendations. If there is a great product, service, or company, the word spreads quickly.
RELIABLE PAYBACK & SUCCESS
Micro-loans are a driving force behind female empowerment in underserved communities. Women have proven to be more reliable borrowers than men and have thus benefitted more from the availability of microloans. For example, Grameen Bank—a major microloan bank founded in Bangladesh with over 2,500 branches presently—reports that 97% of their borrowers are female (Grameen.com).
“We find that women, relative to men, display a greater willingness to repay their loans in both communities irrespective of the type of loan (i.e., individual or group). Thus, gender differences in the repayment behavior in microcredit cannot be explained by the different roles that women play in our two very distinct societies. In other words, women appear to be naturally better credit risks than men”. (Grameen.com)
In more affluent communities, the fund amounts are more substantial, but the pattern of responsibility and commitment to payback is similar.
INNOVATIVE MODELS FOR SUCCESS
As a founder and owner, they get to be their own boss, determine their salaries, secure their own funding, and create an environment where they can balance their career and their family life. With women run businesses, they can succeed on their own terms.
Creating their own company means doing what they do best, building a collaborative environment that fosters innovation and community and fulfills their business ambitions as well as their passion to have a positive impact and contribute to others. They provide jobs and serve as role models and mentors to other women and younger generations.
Historically we look back at groundbreaking role models like Coco Channel, Mary Kay, and Anita Roddick, founder of the Body Shop. These women and many others were trailblazers of creativity, risk-taking, innovation, and economic growth.
There is no end to women entrepreneurs’ creativity, passion, and purpose and no limit to the positive and lasting impact women can make.
“Our world is a better place when everyone has the opportunity to live their dream, and there are a lot of women out there with the potential to do good for the world, so we should all care about helping women hit their potential.”
Libby Morris, Head of Loan Operations, Funding Circle