Module three for review (draft 11)

A Tool Kit for Credit Union
Leaders and Lenders
Module Three

DRAFT FOR REVIEW - PLEASE
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Why do more women than men start
businesses in Canada but more men grow
them?
What barriers do women face in growing
their businesses?
How can credit union leaders and lenders
better support women to grow their
businesses?
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Vancity Community Foundation undertook
the
Women Entrepreneurs: Financing
Opportunities for Growth
project between 2011 – 2013 to address
these questions.
The project included extensive
research and a pilot project for women
entrepreneurs.
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The content of this tool kit reflects what we
learned from project participants, service
providers and advisors about how credit
unions in Canada can better support
women to grow their businesses and, by
extension, support greater economic
activity and job creation.

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Welcome to Module Three:

Common Challenges Women
Face in Growing their
Businesses

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In this module we will explore
Some common challenges women may face
in growing their businesses including
Setting business goals
Knowledge of financing options
Lack of assets, business skills and confidence
Connection to networks and business supports
Accessing new markets

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Introduction
• Women entrepreneurs are not a homogeneous group.
• Not all women face barriers to growing their businesses
but many do. The Women’s Enterprise Centre identified
common challenges including
– business education and training levels
– self-perceptions and confidence
– access to networks
– household income and assets
– family situation
– geography

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• Historically disadvantaged groups may face the
same challenges more intensely and other
barriers such as
– language proficiency
– familiarity with Canadian business environment
– lack of skills recognition

• Effectively reaching sub-groups of women
entrepreneurs, such as Aboriginal or immigrant
women, will most likely require deliberate,
thoughtful approaches on the part of credit
unions.
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• So what else is holding women back from
growing their businesses?
• It may have something to do with the
reasons many women go into business to
begin with – reasons discussed in Module
Two.

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“Really it was just a happy accident that
I ended up being an entrepreneur. It
wasn’t planned at all but works well
because I can control my time and
have a flexible lifestyle”

Kim van der Woerd, Evaluation Consultant,
First Nations Entrepreneur
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Challenge: Lack of Business Goals

• 69% of women surveyed by Women’s Enterprise Centre
(2011) were motivated to start their business for reasons
relating to “passion and self-fulfillment.”
• This influences how and when entrepreneurs prioritize
business planning including setting goals and revenue
targets.
• This lack of early planning results in an ‘I can do it all’
approach rather anticipating what will be needed –
financing, people, technology – to grow the business.

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• In addition, because women tend to
operate smaller businesses, they are not
always prepared for business growth
needs when they occur.
• In British Columbia, the majority (60%) of
women entrepreneurs operate as sole
proprietors without paid help (Statistics
Canada, 2010).

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“Women’s financial responsibilities
are growing faster than their
knowledge”
Joan Cleveland, Senior VP, Prudential

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Challenge: Knowledge of
Financing Options
• Often, women business owners finance
their business needs through personal
accounts and credit cards.
• They are also often not linked to
professional or social networks to connect
them to potential investors or lenders.

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“Survey data clearly shows that women
tend to start companies using more of
their own money and less capital from
outside investors than men do.”

Kauffman Foundation study (US, 2009)

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Challenge: Knowledge of Financing
Options
• Women business owners are less likely to seek
equity capital because they don’t understand the
options, terms or jargon (Anne Day, Canadian
Taskforce for Women’s Business Growth, 2011)

• Access to types of equity capital usually occurs
through informal networks made up primarily of
men. Women often do not have the personal
relationships that provide the necessary access.
(The Urban Institute, 2006)

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Challenge: Knowledge of
Financing Options

• Women project participants said they need
and want to know more about financial
products for their businesses.
• They need better information, earlier,
about how and when to seek financing.

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“Our big task is to find the right ways to help
women entrepreneurs who want to think
bigger and grow their businesses.
A big part of this is educating women about
financing – why it’s important, the different
types and how and when to access it.”

Pam Chaloult , Managing Director, Renewal

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Challenge: Lack of Assets
• Lack of personal assets to leverage
against loans
• Personal credit history
• Lack of business plan and cash flow
projections
• Lack of relationship with lender

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Challenge: Lack of Business Skills
• Unsure of how to develop and implement a
business growth plan
• Unsure how to measure success
• Not proactive at establishing relationships with
business and financial advisors
• Timing: not knowing when to ask for financing
• Not understanding the seasonality and cash flow
cycles of her business
• Lack of business experience and training
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Challenge: Lack of Confidence

• Not self-identifying as an entrepreneur
• Prior experience at a financial institution of
not being taken seriously
• Reluctance to delegate and develop a
human resources plan
• Fear that business growth will result in
losing control of business and vision
• Fear of debt
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Challenge: Connection to Networks
• Barriers to accessing business coaching
and training
• Not connected to business or trade
associations
• Isolated in home-based, small or
geographically remote businesses
• Lack of formal peer networking
opportunities for historically disadvantaged
groups
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Challenge: Accessing New Markets
• Can lack financial resources for new marketing initiatives
(e.g.: participating in trade shows or trade missions).
• Women-owned businesses are often overlooked in
corporate and government procurement policies
• Many women business owners do not know where to
find help to access supplier diversity opportunities or
know about existing organizations set up to do just that;
such as WEConnect Canada and the Canadian
Aboriginal and Minority Supplier Council (Canadian
Taskforce for Women’s Business Growth)

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“One of the ways to overcome some of the
barriers for accessing new markets is to
become certified as a women business
owner through WEConnect Canada.
WEConnect helps facilitate connections with
corporations, both in Canada and
internationally for women business owners
ready and wanting to expand.”

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“Women’s Enterprise Centre (WEC) in B.C.
understands that developing new markets
takes time and money and has developed
a loan product to fill that need.
WEC’s Market Development Loan can be
used for working capital to finance
inventory or marketing materials, pay for
participating in trade shows and attend
international business fairs.”

Kath Britton, CMA, MBA
Business Advisor, Women’s Enterprise Centre
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The Result?
• As a result of the common challenges
women entrepreneurs face, established
businesses may not be ready to grow
when opportunities arise.
• This is a lost opportunity to generate
economic activity that creates employment
and benefits the broader community.

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“If you are an entrepreneur, you should
not leave your outcome to chance,
you should set your own path to
ensure everything you work towards
is worthwhile.”

Natacha Beim, Founder and CEO,
Core Education & Fine Arts

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VIDEO

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Quiz
• Please click on this link to review the
points covered in this module.
• Note to Reviewer:
– Modules will include an optional, online quiz
(5 to 6 questions), that will reinforce some of
the key points made in the module.

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Resources
• Websites
• Articles
• Studies

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End Notes
• Anne Day. November 2011. “Why Do Women Entrepreneurs Fare
Worse Than Men? “
• Huffington Post Canada.
• http://www.huffingtonpost.ca/anne-day/women-entrepreneurs-
speak_b_1088257.html
• Canadian Taskforce for Women’s Business Growth:
http://sites.telfer.uottawa.ca/womensenterprise/
• Prudential Financial. 2012. 2012-2013 Research Study. “Financial
Experience & behaviours Among Women.”
• The Urban Institute. July 2006. “Capital Access for Women; Profile
and Analysis of U.S. Best Practice Programs.” Ewing Marion
Kauffman Foundation.
• WEConnectCanada - http://weconnectcanada.org/home.html
• Canadian Aboriginal and Minority Supplier Council -
https://www.camsc.ca/about_camsc

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Project Partners
Project partners:

This project was funded by

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Module three for review (draft 11)

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