Since colonial times, women have played important leadership roles in Aussie business. Many have become household names, while others of us are quietly plugging away, changing the landscape of the business world.
One example of a time-tested success story is Mary Reibey, who arrived in Australia as a convict, led numerous businesses and became the wealthiest woman in New South Wales. You’ve probably seen her image many times, as it’s on the Australian $20 bank note.
Whereas once upon a time, being a woman in business was something banknote-worthy, today, it’s much more commonplace. So, just how close are we to seeing an even playing field? Let’s take a look at where we stand in 2021.
Young entrepreneurs scaling up
We’ve come to understand, ‘you can’t be what you can’t see’, and we continue to take steps in the right direction. While corporate Australia still has a long way to go, many of our wealthiest business people in 2021 are women. Old money continues to dominate the rankings of the AFR Rich List, with mining magnate Gina Rinehart currently in the top spot, however, younger female entrepreneurs are quickly scaling the list. Ranking among the list’s youngest, at 35 years old, Canva co-founder Melanie Perkins comes in at number 12, a former teacher turned tech entrepreneur whose business was valued at $8.6 billion in 2020.
From one-woman bands to startups and large corporations, women play a pivotal role in leading all types of businesses. We’ve made gains as SME owners in Australia, however, there are still many challenges to overcome.
Slow but steady growth for women leading SMEs
According to the Australian Bureau of Statistics and the Australian Small Business and Family Enterprise Ombudsman, the proportion of female owned or managed business in Australia grew from 31 per cent in 2015 to 35 per cent in 2019. This represents 12 per cent of Australia’s 5.9 women currently employed. Although the growth hasn’t been rapid, there’s a clear upward trend.
In 2020, MasterCard’s Index of Women Entrepreneurs placed Australia towards the top of the list, at number nine, but there’s still room for improvement in overcoming the barriers faced by women operating SMEs, especially considering our ranking next to peers including the US, the UK, and New Zealand.
Reasons for starting an SME
Despite the challenges involved, women start their own businesses for a range of reasons, but a few stand out. Research by Marie Claire and Salesforce revealed the main factors for taking the leap into business ownership in Australia. According to the study:
- 56 per cent of women started a business to gain more flexibility
- 49 per cent wanted better work-life balance
- 46 per cent wanted to be their own boss
- 34 per cent wanted greater financial independence
- 31 per cent want to make more money
- 30 per cent had an opportunity came up
- 29 per cent wanted to do more meaningful work.
Challenges for female founders
Regardless of gender, when starting or scaling a business, entrepreneurs often encounter similar challenges, including limited access to funding and fear of failure.
According to the 2020 report Achieving Scale: Breaking Through Barriers for Female Founders, the greatest barriers for female entrepreneurs building businesses are cash flow, managing time and increasing sales.
However, as women, we’re often contending with a wider range of challenges, and some of this comes down to traditional gender roles. Marie Clare and Salesforce found that 21 per cent of women surveyed found it difficult to achieve work-life balance, while 18 per cent were challenged by the workload of running a business, not to mention a household, and all the invisible labor that involves.
The Boosting Female Founders Initiative, which The Department of Industry, Innovation and Science kicked off in 2018, has identified additional challenges specific to women. Challenges for female business founders include:
- Funding and investment (38%) – factors mentioned included the founder’s personal financial situation and attracting investors
- Access to networks, guidance and information (32%) – this included material information, application guidance and financial advice
- Lack of confidence (23%) – either the founder themself or the business idea
- Time constraints (15%) – demands on time, including family commitments
- Role of men (15%) – gender or cultural barriers.
Impacts of COVID-19 on women in business
Based on a wealth of research, COVID‐19 threatens to erode some of the gains of women in business, unless governments and individuals in positions of power act to provide opportunities and support.
A recent paper, COVID‐19 and the gender gap in work hours, found that women with care responsibilities significantly reduced their hours in paid employment during COVID‐19, while men’s hours in paid employment were unaffected. That’s heightened by the fact that women business operators are more likely to have dependent children than other employed people, with 81 per cent being mothers compared to 51 per cent of women employees.
As mentioned earlier, one of the main reasons women start businesses is for the flexibility that it offers, but there are growing questions around whether working from home is necessarily good for women’s economic empowerment. Women also tend to own a larger proportion of SMEs in sectors that were negatively affected by the pandemic, such as personal services, allied health services, hospitality and accommodation.
Financial support for women in business
In order to encourage women’s participation in SMEs ownership, the Commonwealth Government introduced the Boosting Female Founders Initiative in late 2020. This program provides female startup business founders with grant funding to scale their businesses into domestic and global markets. Although the first round of the grant program has closed, subsequent rounds will continue until 2025. The assessment criteria include that business introduce new products or services and contribute 50 per cent of the project cost. To learn about the types of businesses that were successful in receiving these grants, see the list of Round 1 Grant Recipients.
Expanding female entrepreneurship in Australia
Overcoming obstacles to expanding participation in business ownership requires improving education and fostering inspiration beginning with younger generations.
Recognising the importance of women in business leadership, the Australian Government has developed initiatives to inspire the next generation of female business leaders. The Future Female Entrepreneurs Program is open to young women between the ages of 10 and 24, and is designed to inspire, educate and empower future female business owners by cultivating skills in design thinking, technology and business.