Interview: Empowering Female Entrepreneurs
On #equalpayday, our founder’s interview on Conversations that Matter aired.
It has since aired on CHEK news, msn.com, the Vancouver Sun and the World News
“Self-employment should empower women to earn more money, but studies show the wage gap persists in self-employment and it’s even worse in the gig economy for many entrepreneurial women. Regardless of parity in education, work experience, number of hours worked or occupation, women earn less than men in self-employment,”
says Laurel Anne Stark, an entrepreneur and co-author of a
new report on the State of Female Entrepreneur Mental Health.
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Full transcription below:
Stuart McNish:
Self-employment should empower women to earn more money, but studies show the wage gap persists in self-employment, and it's even worse in the gig economy for many entrepreneurial women. "Regardless of parity in education, work experience, number of hours worked, or occupation, women earn less than men in self-employment," says Laurel Anne Stark, an entrepreneur and co-author of a new report on the state of female entrepreneur mental health.
Stuart McNish:
Key to understanding reasons why women face unique challenges lies in their motivation to start a business. For women, many if not most have to start a business because they have few employment choices. Women tend to be entrepreneurs of necessity, which means they were victims of a system that didn't compensate them appropriately. Didn't promote them. Their work-life balance was, well, off balance or they were harassed, to name but a few of the reasons for going out on their own.
Stuart McNish:
The good news is that research shows women are uniquely suited to entrepreneurship. They're adept at understanding the needs of others, which is essential in the development of strong client relationships. As well, Stark says, "Their potential is enormous given their ability to succeed and exceed the profitability of many companies created by men despite the crippling barriers they face. One such barrier is access to capital." Stark says, "The harsh reality is women simply do not have the same access as men do to financing."
Stuart McNish:
Now while launching an enterprise ought to provide protective factors for women such as an increased control over work schedules and a better work-life balance, it does not alleviate the concerns that motivated women to start a business in the first place. Stark says, "Research shows self-employment does not provide relief from gender bias, the gender pay gap, workplace harassment, or the other stressors unique to women." Add it all up and female entrepreneurs burn up more frequently and are significantly more likely to encounter mental health challenges than their male counterparts. I invited entrepreneur, Laurel Anne Stark, to join me for a conversation that matters about empowering female entrepreneurs with the resources needed to support a vital sector of our economy.
Stuart McNish:
Laurel Anne Stark, thank you for joining me here on this conversation about the unique challenges that female entrepreneurs face that there are different than their male counterparts. I was quite surprised in your study to see the reasons why women start businesses and they're quite different than men. They do so out of necessity. And why is it important that we understand that there is this difference, not wanting to necessarily seize opportunity, but saying, "I have to do this"?
Laurel Anne Stark:
The reason it's important to understand that female entrepreneurs tend to start businesses out of necessity more often is because multiple studies show that starting a business out of necessity generally indicates that you're going to have a lower mental health and well-being index. Obviously, there's less choice involved. And typically, the women who are starting businesses out of necessity are doing so because of lack of state-sponsored childcare. Here we are in 2020, and both in Canada and the States, regardless of who is the breadwinner in the household, women are still doing the bulk of domestic labor that includes childcare and elder care. So a lack of a state sponsored childcare, means that women are trying to juggle home life and work life, and that can be very, very difficult if your job doesn't allow that flexibility. So the domestic burden is one component.
Laurel Anne Stark:
Another one shows that 50% of women experience harassment in the workplace. So we have the domestic burden. We have harassment. We have the fact that most women still experience gender bias with respect to getting promoted, with respect to gender pay gap, et cetera. So all around, the self-employment is an attempt to escape systemic bias and a system and an economy that simply does not work for women.
Stuart McNish:
So does that set up a rather... Well, I don't even want to say rather. That's the wrong qualifier here. It sets up a situation where a female entrepreneur is starting their business with very limited resources. It's not like they've been saving for a long time or they have access to capital or financing that's going to give them some kind of safety net. And as a result, when you go into a business and you don't have wiggle room in your budget, it puts you in a negative negotiating situation. And so, therefore our clients can somehow sense this and take advantage of it. And does that not add a tremendous amount of additional stress?
Laurel Anne Stark:
Oh gosh, yeah, of course. So what I'd like to illustrate as well as the context that goes into the resources that women have. So we still have a gender pay gap. So white women are getting 72% on the dollar for every dollar that a man makes. If you are a woman of color, indigenous, disabled, or LGBTQ plus, you're often making 40 to 50 cents on the dollar. Women have not been able to participate in the workforce for as long as men. We were once considered property of men. So as a result, there's an extreme wealth gap, which means that we don't have as much savings. We don't have as much in the way of assets.
Laurel Anne Stark:
We don't have as much leverage in the marketplace to begin with. Women are denied bank loans much more often than men, regardless of whether it's personal or business. In the U.S. last year, we only received less than 5% of venture capital investment. That's 5%. So what ends up happening is over 80% of self-employed women are financing their businesses on their credit cards or on their lines of credit, which of course has much higher interest rates, and can put you in a more precarious financial position.
Laurel Anne Stark:
And then in terms of the clients being able to sort of sniff out that sort of risky situation, women have a tricky situation with respect to being self-employed because we have basically a double bind where society expects us to and we are socialized to be feminine, and accommodating, and caring, which directly contradicts the requirement for success in business, which is to be decisive, and commanding, and assertive.
Stuart McNish:
Women, they are forced to, as you say by necessity, in great numbers to have to put themselves into this position. It takes a tremendous amount of initiative and courage to move forward because so often you step out into that environment without a playbook and without mentors that you can turn to and say, "What do I do about managing cashflow? What the heck is cash flow and how do I manage that?" So how do we develop those kinds of resources so that women can turn to one another and to other mentors that can help them navigate their way through this very tricky process?
Laurel Anne Stark:
Yeah, absolutely great points, Stu. So projections indicate that if self-employed women were supported to grow and scale their businesses at the rates of men, we could contribute a staggering $12 trillion to the global economy, which is 11% of the GDP of the globe. So there's tremendous economic benefit to supporting self-employed women. Both research and anecdotal evidence suggests that women-led businesses do actually perform better.
Laurel Anne Stark:
Kevin O'Leary from Shark Tank has been very public about stating that women-owned businesses make him more money. They tend to meet their financial productions more often. And I think that it's safe to say that typically women-owned businesses, we have tremendous time management skills, given the fact we perform all of this domestic labor. We also have a societal expectation and this pressure to appear a certain way. So there's expense and time associated with being what's called professionally pretty. So that's definitely a factor as well.
Laurel Anne Stark:
And then in terms of access to mentorship and community, certainly actions do need to be taken. Women only have 29% of the leadership seats worldwide. Lack of network, and lack of support is one of the top three reasons that women struggle in business. So how do we rectify this situation? Well, first of all, it needs to be acknowledged as an issue by men. So oftentimes, you'll see topics like this in the news. You go into the comment section and there's a lot of men who are dismissive of this state of affairs, dismissive of the fact that this is our lived experience, and dismissive of the facts.
Laurel Anne Stark:
And what needs to occur is a redistribution of resources. So the folks in leadership positions need to sponsor women and allow them a seat at the table. Organizations that have tremendous wealth need to be funding support for female entrepreneurs that specifically addresses some of the negative impacts of living and working in a society that has such extensive gender bias.
Laurel Anne Stark:
And also women need to know and have that knowledge internally, that it does really take a community to grow a business, and not to be afraid to reach out, and to build those networks. Women use social media a lot more frequently to grow their businesses, so we already know that, but I think we're all just as female entrepreneurs, we're all sick of being told what we should be doing to fix the issue. We are working long and hard. We're doing the best we can with limited resources. And we're still outperforming our male counterparts. What we need is for male counterparts specifically to start helping us out a little bit.
Stuart McNish:
So that's a really interesting point. And you know as well as I do, just by virtue of the fact that you're a small business or an independent operator, people run around saying, "Oh yeah, you're the backbone of the economy, and you're providing employment for so many people, and we're behind small business." And yet, then you turn to government. They're not there. Every single program that they put into place actually stands in the way of moving forward as a small independent operator.
Stuart McNish:
You turn to big business and banks, they trumpet the same stat, small business is such an important part of the economy, and we're there for them until you need to go and borrow money from them. You talk to labor, they say the same thing, but they're not there for you. All the rules are set up to support large organizations with deep, deep, deep resources.
Stuart McNish:
And so just by virtue of the fact that you're an entrepreneur, you're running an uphill battle. And then you layer in all of the other issues that we've already just talked about right now for women, it's amazing to me that so many women aren't cracking under the pressure that you've pointed out. These are monumental hills to climb, and yet we're not sitting there giving the appropriate resources and support. We give it lip service, but we're not actually doing it. And as you say, it's incumbent upon all of us to say we're going to do what we can to support you.
Laurel Anne Stark:
Agreed. Yeah and even the definitions of entrepreneurship are harmful to women-owned businesses. There was an article analysis of experts covered in the Globe and Mail and there was a huge disparity. Entrepreneurs are typically portrayed as being predominantly white and male. And that creates a deficit of leadership, creates a deficit of example. And also female owned businesses tend to be smaller. We tend to be micro businesses, not necessarily fitting the criteria that say small and medium enterprise.
Laurel Anne Stark:
A great example is with the COVID support, et cetera. Pretty much every self-employed woman I know it doesn't meet the criteria for support due to not having rent to pay or a lot of employees. A lot of self-employed women are simply working on their own in isolation and so don't meet the definitions of entrepreneurship, both for the types of support that you were mentioning that are supposedly available through private and public enterprise, but also, yeah, they just simply are not thought of being entrepreneurs in the same way that white males are. So that's a tremendous difficulty.
Laurel Anne Stark:
And in terms of women cracking under the pressure, I think that we definitely have a very serious situation, especially with COVID. Our research shows that 70% of female entrepreneurs feel overwhelmed consistently. 22% of them in our latest survey experienced feeling like they want to escape life, which is tremendously concerning. But also I think personally is a pretty accurate response to the amount of pressure and the amount of obstacles that are in our way and the amount of difficulty that just simply being a female in our society means that you have to live with every single day.
Laurel Anne Stark:
As a self-employed woman, the amount of obscene messages that are received online, the amount of harassment that occurs in a standard woman's life. United Nations says that 70% of women are going to experience violence in their life. And that's an obstacle that's all too real for many, many self-employed women. And help for the mental and emotional impacts of living in a society where violence and harassment towards women is normalized, that needs to be part of the support for self-employed women. Because just because nobody likes talking about it doesn't mean that it's not happening.
Stuart McNish:
What are some of the concrete steps that can be taken, that anybody who's watching this that says, "I can make a contribution to help change this environment that's going to help to support entrepreneurial women." Because as you pointed out, the economic contribution to the global economy is tremendous. So what are a few things that we can do?
Laurel Anne Stark:
Great. Oh, I'm so glad you asked, Stu. Okay, so first of all, if you're a male watching this, the first thing that you can do is you can call out your peers, your male peers, any sort of locker room talk, any sort of objectification of women, any sort of trivializing of physical or online harassment of women, any demeaning terms, misogynistic terms. Calling out your friends and coworkers and saying, "You know, that's just not appropriate." That would be a great step. Women simply aren't listened to when we attempt to assert those things, so that would be certainly beneficial.
Laurel Anne Stark:
Again, if you're a male watching this and you know self-employed women, buy from them, promote their businesses, refer them, send clients their way, make introductions, proactively support those women. If you are a self-employed woman watching this, I definitely want to normalize your lived experience. It is actually this hard. It's not just you. And I would encourage you to reach out to your other self-employed women and have a virtual coffee or something like that.
Laurel Anne Stark:
I think for any organizations that purport to support entrepreneurial women, rolling out a mental health and wellness program in addition to assistance with the more tactical and logistical supports like a business plan and the cashflow plan, and actually talking about how experiencing trauma can negatively affect your ability to sell, for example. Those types of things would be tremendously beneficial.
Laurel Anne Stark:
I think government organizations need to really honestly cut the red tape and start proactively reaching out to self-employed women that have recently registered businesses. Give them a phone call, ask how you can help, and actually deliver. Because as a self-employed woman trying to navigate and go through the hoops that are present for any sort of assistance through public or private enterprises is frankly a waste of time and has not produced any results for me personally. And I've been self employed for 17 years, and I haven't had any help from any sort of organization simply because it doesn't seem to be accessible, although they report that it is.
Stuart McNish:
What's the most important thing that you would say to somebody who is now looking at the daunting task of having to be self-employed that will help them get through that first year?
Laurel Anne Stark:
One really critical piece that has been under publicized and not a lot of people are aware of is the link between mental health concerns and entrepreneurship. A study came out of the University of Berkeley and San Francisco in 2015 that indicated that entrepreneurs experience mental health concerns at a rate three times the global average. So simply by becoming self employed, you expose yourself to extremely high risks for depression, anxiety, substance use, and misuse disorder, suicidal ideation, mania, manic behaviour, et cetera.
Laurel Anne Stark:
So the one thing that I would say that's critically important is you're no good to anyone if you are six feet underground and to take really good care of your mental health. Whether that looks like ensuring that you're not working at home all the time, making sure that you're changing into business clothes, that you have social contact, that you are exercising and eating regularly, and sleeping regularly.
Laurel Anne Stark:
Because the prevailing culture of entrepreneurship is that it is a culture of bravado. It is a culture that sacrifices the health and well-being of the entrepreneur for the performance of the business, where expressing your needs and any sort of weakness is very difficult and frowned upon. And consequently, we have lots of famous entrepreneurs that have killed themselves, and the pressure is enormous, and the risks are real. And it's critically important to take care of your mental health, especially now in the global pandemic when people are already feeling isolated, their income is already decreased.
Stuart McNish:
I think that you are absolutely right that this focus on your own state of mind is fundamentally important. And that it's something that you need to carve out. I know that when I was building my business, I didn't do it. And, oh my gosh, the consequences of working through that were physical, mental, emotional, relationship. And I didn't face some of the challenges that we've highlighted today. So first of all, I think that we have to really applaud those women who persevere and succeed, but also recognize that any woman that any of us knows who's out there being self-employed or on their own needs our support.
Laurel Anne Stark:
Absolutely. Yeah, absolutely. Just because we carry it well, doesn't mean we can definitely use some help, absolutely. And then in terms of just the mental health journey and things like that, yeah, like a lot of us are in isolation, and we're struggling with swinging between complete thoughts of failure, and fear, and imposter syndrome. And then thinking, "Okay, I can do this," et cetera. And a lot of folks use substances to cope and that can be problematic. So certainly don't go it alone. Find someone you can talk to, and tell the truth to, and take good care of yourself. And also know that you're not alone. Most people do struggle with their mental health a lot more than we talk about certainly on social media, et cetera.
Stuart McNish:
Well, I think the other thing to remember is that if you're doing this and you're still there, you're extraordinarily strong because you overcome all of those things. And your knees may buckle a little every now and then, but you are fighting your way through this and that is a testament to your own inner strength. And so let's appreciate that. I believe that the effort is appreciating and embracing that effort and supporting people who try is more important than celebrating those people who are so-called big successes. It's the individual efforts of all of us that make for a really robust and wonderful society. And so let's support that because when we do, everybody wins.
Laurel Anne Stark:
Absolutely. And in our report, the State of Mental Health of Entrepreneurial Women, we discovered that entrepreneurial women, they experience increasingly high risks and obstacles to both wellness and success in business. In the report we surveyed over 250 independent studies to gather all the data about what the risks are. And far from being a laundry list of items that would show women to be weak, what we found is that self-employed women are absolutely incredible. They've got tenacity, resilience, the ability to problem solve, to time manage, and essentially do like three jobs for the price of half of one, and still managed to put on a brave face and a pretty hairdo, and go out in the world, and conquer the best they can. So I think it's a testament to the spirit and the ability to conquer obstacles, no matter how great.
Stuart McNish:
Okay. Now to wrap up, I know that you are putting together resources that can be available to women entrepreneurs. How can they find you so they can have access to this resource?
Laurel Anne Stark:
I'm the founder rather of an organization called resurgo. That's spelled R-E-S-U-R-G-O, which is rise in Latin. And we just created the very first study that's ever been done on the mental health risks to female entrepreneurs. It's again, 250 independent studies that have been analyzed, as well as we've done our own independent research. And anyone can get a copy of that at resurgo.co.
Stuart McNish:
Thank you for putting that resource together. It's vitally important to anybody who's in self-employment, but particularly so for women who face so many of these challenges. Thank you very much for taking the time to share this information with us today.
Laurel Anne Stark:
Thank you so much, Stu. Have a wonderful day.
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