Arkansas should lead the nation in leveling the playing field for women entrepreneurs
Starting a new business is challenging for anyone, as I know from first-hand experience. Even with an MBA, it wasn’t easy. But it’s even harder for women, who must face a playing field slanted against them. Arkansas has an opportunity to level that field and create a model for the nation. My conversations with dozens and dozens of women entrepreneurs in the state reveal how.
I’ve had those conversations in my role as senior advocate in Northwest Arkansas for national nonprofit Right to Start, which champions entrepreneurship as a community priority. I can speak easily with women entrepreneurs because I started my own social enterprise, a nonprofit bakery developing on-the-job skills to transform the lives of people with intellectual and developmental disabilities.
What I’ve heard from those women entrepreneurs is a consistent set of concerns, whose alleviation would go a long way to leveling the field – a field on which the entire nation’s economy depends, as new businesses create virtually all job growth in America. Their concerns are these:
First, access to capital for small businesses is a challenge nationwide: “one of the biggest policy issues in the United States today,” according to the U.S. Small Business Administration. But it’s even greater for women, who are held to a different standard than men. The women entrepreneurs with whom I’ve spoken recount consistently that in seeking funding they are asked not only about their business goals and prospects but about their personal capabilities of achieving them. They are treated by lenders with undue skepticism about their business skills.
This is consistent with a recent Bank of America study that found that more than half of women entrepreneurs say they do not have equal access to capital. The study found furthermore that only 34% of women entrepreneurs believe that women will achieve equal access to capital at some point in the future.
Key to solving this problem is creating awareness of it and encouraging banks, venture capital firms, and other lenders and investors to hire more women in decision-making roles. If more women entrepreneurs seeking funding saw women in their fundraising meetings, they would be treated differently and would have more confidence in the process.
Second, women entrepreneurs often tell me that their businesses would benefit from government contracts, which can be catalytic – providing not only crucial business but a credential that can be leveraged for other business. Yet women-owned small businesses are dramatically underrepresented in that respect. While the federal government, for instance, has continued to meet its overall goal of 23% of procurement dollars going to small businesses annually, according to the Bipartisan Policy Center, it has fallen short in supporting women-owned small businesses. Five percent of federal contract spending is supposed to go to women-owned small businesses, but that goal has only been met twice (2015 and 2019) since the goal was set in 1994.
All levels of government should look at their procurement rates with women-owned small businesses. They should all set goals and report on their ability to achieve them. When only a small percentage of government contracts goes to women-owned small businesses, women entrepreneurs are discouraged from pursuing them. Once more women-owned businesses benefit, other women entrepreneurs will see opportunities for themselves.
Third, women entrepreneurs in conversations with me cite affordable child care as essential to sustaining and increasing the number of women-owned businesses. While the responsibility for child care should fall equally on fathers and mothers, in reality the burden typically falls more heavily on mothers – and on single-parent entrepreneurs especially.
Affordable child care is not just an admirable social condition but an economic necessity. Without it, neither women nor the nation can achieve their economic potential.
In that context, numerous women entrepreneurs with whom I spoke expressed concern about the impact for them of the overturning of Roe v. Wade. What does that mean for their future as entrepreneurs if there is no access to affordable and reliable child care?
Fourth, women entrepreneurs tell me that they need more male allies. They need more men who will advocate for them, will take the same financial risk with them that they take with men entrepreneurs, and will work within their own industries to level the playing field.
Arkansas should consider these concerns and create a strategy for advancing the number of women-owned small businesses. It can do so at the state level and at the municipal and county levels. It’s in the interest of everyone in Arkansas to have the most vibrant economy possible, and Arkansas can light the way for the nation. When we turn on the lights, wouldn’t it be beautiful to see a level playing field for women and men entrepreneurs?
Editor’s note: Daymara Baker is the owner of Rockin’ Baker in Fayetteville and senior advocate in Northwest Arkansas for the national nonprofit Right to Start. The opinions expressed are those of the author.