Why Women-Led Businesses are Outperforming Men

Are women kicking ass in business? Absolutely. Is it good for the economy? Sure. It’s also good for loads of other, more important things. (What?! More important than the economy!?) When women have the opportunity to thrive in business, when they are seen, heard, and included, entire communities reap the benefits. Women-led initiatives help our societies evolve, but the hurdles for women are daunting. 

Barriers to Women in Business

There is plenty of research about the barriers women face in business. At the top of the list is an old favorite–the classic family/household narrative. As the story goes, women struggle to succeed in business because they have more responsibility to their families and households than men. The objective reality of the narrative may vary culturally, but regardless of cultural differences in gender roles, it definitely isn’t the only barrier.

In many places, women don’t even have the option to commit to business. For starters, 2.7 billion women in the world are legally restricted from having the same choice of jobs as men. 

In 2018, 104 economies still had laws preventing women from working in specific jobs, 59 economies have no laws on sexual harassment in the workplace (and just to state the obvious, rampant sexual harassment tends to hinder women’s advancement or participation in certain environments), and in 18 economies, husbands can legally prevent their wives from working. So. There’s all that. But wait, there’s more. 

  • In the legal world, women are 45% of associates but only 22.7% of partners. 
  • In the medical world, women are 40% of all physicians and surgeons, but only 16% of medical school deans.
  • Don’t forget academia! Women currently earn the majority of doctorates (for eight consecutive years) but are only 32% of full professors and 30% of college presidents.
Family still holding us back?

There has been a lot of recent celebration of the increase in women CEOs of Fortune 500 companies. It’s up to a whopping almost 8 percent–all of whom are white it feels important to note. While meager, this 8 percent of white women has at least overcome the fun statistic from a few years ago when there were more CEOs with the name of John or David then there were women. (That’s correct, not John and David combined.) In 2018, 5.3 percent of CEOs in the U.S. had the first name of John, 4.5 percent had the first name David, and 4.1 percent were women. Fascinating, truly. 

Who Is Investing and Why?

In the U.S., female entrepreneurs received significantly less early-stage capital from investors than their male counterparts. This investment gap exists despite the fact that in many countries, women-led businesses are outperforming those founded by men in terms of revenue. Research also shows that women tend to make more realistic projections, ask for more realistic loans and investment capital, and default less. 

Who are the majority of big investors? Who already holds most of the economic power and capital? Take a guess–who are the majority of the people who approve or deny loans? (Hint–it’s not women.) 

And this is not solely a binary situation. This lack of inclusion in investing, receiving investment capital, and general access to entrepreneurship is true across all intersections of race, class, gender, and sexuality. 

So while women, BIPOC, differently abled, immigrants, and humans of all genders and sexualities have new and valuable ideas, and while this may make it difficult for the white Davids and Johns to see the value in these products or services, it doesn’t make them any less important or desired. Consider this–all these humans also purchase goods and services and generally tend to exist in the world. 

Changing Tired Narratives 

In Mexico, 39% of businesses are founded by women. These women-led businesses consistently show higher profit margins in comparison to male-led companies. Around the world, women who found businesses are likely to start with less capital, seek less financial backing, and receive less when they do seek it. Despite these financial barriers, women-led businesses are generally kicking ass.

Why are women’s businesses doing so well? It turns out that women have ideas that men may not think of, due to different day-to-day lived experiences. Could it be possible that responsibility to family may even give women ideas for businesses that men have not considered?

women-led businesses
Women are kicking ass in all kinds of businesses.

Perhaps the reason women have been “held back” from entrepreneurship is less about our commitment or responsibility to the family and more about not having had access to capital. 

Perhaps we are still climbing our way out of generations of not having our own bank accounts, the ability to own property, or even access public spaces. Just perhaps, these little details are all related. 

Women-led Businesses Are Good for Communities

There are plenty of calculations that celebrate the economic potential of women. 

Ah, thank you capitalism, women should be equal because there is more money in it. But, as it turns out, women-led businesses are good for society for more than just a dollar amount. 

At the individual level, women experience an improved ability to provide for their families, greater respect in their communities, and increased self-confidence. Furthermore, research suggests that employees are better off in women-led businesses, where there tends to be greater investment in employee growth and well being. 

At the community level, women tend to spend more of their income on education and health, which benefits families, children, and overall community health. 

When opportunities for women are more closely matched with those of men, communities have fewer child deaths, fewer conflicts, and better public services and health. Essentially, when women are more involved in creating and driving the economy, communities are safer and healthier.

A lot of research shows that our societies are better, healthier, and safer when women participate fully in them. When you break it down to a basic thought process, it makes a lot of sense. Equal participation is good for everyone. It’s really not a difficult concept. 

However, it seems to be difficult to carry out. Many gender mainstreaming efforts, and even women’s own advances in leadership and entrepreneurship, seem content, or conditioned, to just add more women into men’s places. Or to encourage women to take on stereotypically male characteristics in order to succeed. Maybe this is how women learned to succeed at first in male-dominated spaces, but now we are learning that we are valuable on our own terms. 

Now we are learning that no human should have to conform to any gender stereotype in order to become successful.

The Goal: Deconstruct Our Notions of Power

The goal isn’t for women to just grab at power and leadership, to take power from men, and then wield it in the same ways. Nor is it (in my opinion) to use women to grow the economy ever larger in the same unsustainable ways. The goal is to deconstruct the notion of power and to reconstruct holistic and healthy societies where all humans are seen, heard, and valued. In this vision, businesses add value to our societies, not just dollar amounts to our economies.

This holds true for all intersecting identities–ethnicities, races, sexualities. All people have unique experiences and lenses through which they view the world. All people have value to add to our economies, governments, and social structures. 

Support Your Local Women-led Business

At Medusa, we are all about women in business. It’s who we are and it’s what we support. Our website was created by a women-led company. Our graphic design and branding was done by a Latina entrepreneur. All of our photographers, coaches and consultants have been women. It was critical to us to support women-led businesses as we built our own brand. 

Go ahead, follow our lead! Support women-led businesses. And while you’re at it, support queer, BIPOC and Latinx-led businesses as well. Our communities only stand to thrive and flourish.

What do you think? More women in business? More CEOs? If you’ve got a business idea cooking or need content for your already-running initiative, get in touch here!

amy schmidt

Amy Schmidt is the CEO and founder of Medusa Media Collective. She is an editor, writer and teacher. She also teaches yoga, leadership, and empowerment self-defense for women. Her goal in writing is connection through empathy and her passion is working to end gender-based violence. She likes her humor dry and her fruit juicy.