A NerdWallet survey finds most women business owners work outside jobs to overcome financial hurdles, and describe lower confidence levels than male entrepreneurs.
It’s well-known that women launching businesses often encounter unique challenges that their male counterparts don’t face, or at least not to the same extent. New research sheds light on the specific hurdles women entrepreneurs typically face as they grow their businesses and offers insight into how women perceive both the exciting and tough aspects of entrepreneurship.
A Surge in Entrepreneurship, But Women Lag Behind
Since the pandemic, there’s been a significant increase in people eager to start their own businesses, with new business applications rising by at least five million annually since 2020. However, women still make up just one-quarter of these new business owners, according to a recent NerdWallet study. Out of 3,059 U.S. adults surveyed last January, only 406 were women who claimed to be running their own businesses. These women spanned the spectrum, from traditional business owners to those offering specialized services independently.
Gender Disparities in Entrepreneurial Confidence
The study also revealed a noticeable difference in the way male and female entrepreneurs perceive their success. While 32% of men feel financially successful, only 23% of women share the same sentiment. This lack of confidence can not only shape the mindset of women who never consider starting a business but can also make it harder for women who do become entrepreneurs to recognize their leadership effectiveness in the long run.
Financial and Time Constraints Hold Women Back
When asked why they hadn’t started a business, 63% of women cited a lack of funds as the primary barrier. This is a common obstacle for many would-be entrepreneurs. Other reasons women gave for not starting their own businesses included not having a strong enough idea (27%), doubting their ability to succeed (22%), and not having enough time (19%).
Responses from women who have already launched their businesses reveal a common concern about time management. The study showed that 35% of female entrepreneurs still hold full-time jobs to support their businesses, 12% juggle part-time work with their startups, and 18% are involved in gig or freelance work.
The Struggle for Time Flexibility
Given these time demands, it’s no surprise that only 17% of women reported having more time flexibility running their own business than working for someone else. This balancing act might explain why only 13% of women entrepreneurs plan to grow their businesses in 2025.
According to Randa Kriss, an entrepreneurial specialist at NerdWallet, “Many women have to balance other work with running their small businesses.” Women, in particular, face more obstacles than men when it comes to starting their businesses. Many women who aren’t entrepreneurs point to time, ideas, or funding as barriers, underscoring the pressing need for targeted financial support and resources tailored to women entrepreneurs.
Advice for Women Entrepreneurs
NerdWallet’s study also offers some practical advice for women navigating the early stages of business growth. One key recommendation is to set achievable goals before diving into business operations. The report suggests that women should regularly assess their time and labor demands throughout their journey. Breaking down larger goals into smaller, more manageable tasks allows women to build confidence and feel a sense of accomplishment as they move forward.
For women juggling jobs while running a business, the research recommends evaluating whether hiring staff could be a viable investment to help the business grow while still maintaining external work. Additionally, the report suggests actively looking for opportunities to free up time for the business, which could lighten the load. Entrepreneurs should also consider whether hiring support is justified, based on the progress the business has made toward its goals.
Making Tough Decisions: When to Pivot or Close
Finally, the report advises women to carefully assess whether it’s time to shut down the business if things aren’t working out. “If you take a hard look at the business and see it isn’t functioning, you may also wonder whether it’s time to close it,” the survey suggests. “Whatever decision you make, keep your lifestyle and objectives in mind. Prioritize the business if it truly matters to you. But if the challenges begin to outweigh the benefits, consider what comes next.”
Balancing the Struggles and Rewards
While these tips are especially helpful for women who face even more challenges than their male counterparts, they also highlight the tough decisions all entrepreneurs must make as their businesses evolve. Ultimately, these insights can guide women through the unique challenges of entrepreneurship, helping them make better decisions and ultimately find success in their ventures.
