female professional smiling
While the number of woman-owned businesses is on the rise, there are a few main challenges that many find themselves facing. — Getty Images/PeopleImages

If you ask the average American if they know a female small business owner, the answer is likely a resounding "yes." The National Association of Women Business Owners (NAWBO) reports that there are currently more than 11.6 million U.S. firms owned by women, which employ nearly 9 million people and generate $1.7 trillion in sales.

These numbers represent a nearly 60% increase in women-owned businesses since 2007 — as well as a larger societal trend in confidence among professional women.

"We've entered into an era of women's empowerment," said Christy Whatson, a marketing manager for handmade sellers. "Women [are] awakening to their potential of being successful small business owners."

Social media manager Lundyn Majstorovic agreed, noting that women are becoming braver about going after their career dreams.

"[It's] not just ... corporate female 'boss babes,' [but] moms who work from home, freelancers and businesswomen who leave their secure, full-time salaries for something riskier," Majstorovic said. "It's becoming the norm to see working women in every field, and more opportunities are being presented to women."

[Read: 4 Steps to Bring Your Business Idea to Life]

The state of female entrepreneurship

While the overall trends in female business ownership are good news, things aren't all positive for the majority of female business owners: In 2018, less than 6% of women-owned firms generated revenues of $250,000 or more.

"When you look at some of the hard numbers ... the number of women who have actually started firms has increased exponentially," said Rebecca Harris, executive director of the Center for Women’s Entrepreneurship at Chatham University. "[But] 90% of all women-owned businesses are sole proprietors, meaning only 10% are hiring employees. That has to change, because you have to have employees to grow."

Why has most of the growth among woman-owned businesses been concentrated to such a small number of firms? To understand this, Harris said it's important to look at what types of businesses women entrepreneurs are starting.

"Women are starting businesses that are not necessarily always in the largest and most revenue-producing industries," she said, adding that many woman-owned businesses are in fields like health care and professional services, rather than in higher-revenue industries like construction and trucking.

Be OK taking risks. You have to ask for what you want. If you need money, help, etc., don't be afraid to ask.

Rebecca Harris, executive director of the Center for Women’s Entrepreneurship at Chatham University

Overcoming 3 major challenges as a woman in business

Of course, there are some common challenges that still persist for female entrepreneurs, regardless of industry:

Lack of funding

While the inability to obtain capital is the biggest entrepreneurial challenge across the board, Harris noted that it's harder for women, particularly women of color, to get loans than men. Investors are an even less likely path, as just 2.2% of venture capital went to female-founded startups in 2018.

"I think banks tend to be more old-fashioned," added Nicole Pomije, who was rejected by several traditional banks before finding an alternative lender to fund construction of her bakery, The Cookie Cups. "They are more guarded with loans to women."

However, it's important to get comfortable with putting yourself out there and taking a chance on yourself.

"Be OK taking risks," said Harris. "You have to ask for what you want. If you need money, help, etc., don't be afraid to ask."

[Read: 3 Things You Need to Know About Small Business Lending in 2019]

Low self-confidence

Whatson noted that women who struggle with low self-confidence, self-worth and self-esteem can easily project those traits onto their business.

"Finding my own worth ... and keeping my own emotions out of it has been a big challenge for me," she told CO—. "I think it is a matter of learning our own value as well as separating it from our businesses."

Pomije agreed, noting that women need to value themselves and build confidence to succeed as an entrepreneur.

"If you don't ask for what you are worth or feel confident about your business, people will see that and act accordingly," she said.

Market saturation

Because so many doors have opened for women to pursue entrepreneurship, certain fields have become saturated — and getting noticed among competitors is hard work.

"The challenge has been to research and strategize how to ... set myself up as an authority in my field," said Majstorovic, who recommends offering insightful tips and networking to gain trust from potential clients.

The best thing women entrepreneurs can do to stand out is be their authentic selves and share their knowledge with others, while learning everything they can along the way.

"Be confident in what you do know," Majstorovic said. "Be motivated to keep learning and keep pushing through the rough patches, because there will be plenty of them."

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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