module three for review (draft 11)
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A Tool Kit for Credit Union Leaders and Lenders
Module Three
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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