Business Insurance is Helping Female Entrepreneurs Break Barriers

Congratulations to South Africa’s female entrepreneurs for being one of the 12 national groups throughout the world to grow during the period from 2020 to 2022! However, South African female entrepreneurs still face multiple challenges, including access to capital and overcoming negative stereotypes. Every woman entrepreneur should consider getting the right business insurance to protect her hard-won entrepreneurial success.

First for Women has noticed a significant upward trend in female entrepreneurship. We believe every female entrepreneur needs to know that they have a place in South Africa’s economy.

This article will show you that you can win in entrepreneurship and also how business insurance cover can help you along the way.  

Female entrepreneurship on the rise in South Africa

One would expect women to play a more significant role in South Africa’s economy since they make up half of the country’s adult population. Lack of job opportunities, the gender gap, and COVID-19 has had a huge negative impact on the earning capabilities of women. 

The good news is that with challenges come opportunities. In 2021, South Africa witnessed an increase in female entrepreneurial activity due to increased opportunity-driven and necessity-driven entrepreneurship. According to Mastercard’s Index of Women Entrepreneurs (MIWE)[1], female entrepreneurship jumped from 62.8% in 2020 to 91.2% in 2021 — a staggering growth of 45.2%.

There are a couple of reasons for this increased activity rate. For example, political stability improved by 10.5%, while access to venture capital went up by 17.2%. This shows that creating an enabling environment can go a long way towards ramping up female entrepreneurship activity in South Africa.

The entrepreneurship landscape showed a ratio of 1 female entrepreneur to 1.52 male entrepreneurs in 2017[2]. The good news is that the ratio improved significantly in 2019, dropping to 1:1.14 — which is a 25% improvement in just two years. This is a sign that the number of female entrepreneurs in this country is rising.

Measured on a global scale, South African women entrepreneurs are doing pretty well — being one of only 12 economies that showed growth in female-owned entrepreneurial activity rates from 2020 to 2021/moving up to rank 37th in the world in the world 2021.

Why the female business owner is key to economic growth

It may sound like a cliché, but small businesses are the lifeblood of the South African economy. With the country reeling from a COVID-19-increased unemployment rate, an increased number of small businesses could improve employment opportunities.

The country is still facing massive unemployment, currently sitting at 33.9%. It’s even more disheartening that the youth — the future of this country — currently face a 46.5% unemployment rate.

An increase in female entrepreneurship can help reduce the unemployment rate. The opportunity to do so is high, considering that women-founded small and medium-sized businesses currently comprise only 34% of the total.

It’s estimated that female-owned businesses launched in South Africa[3] between 2018 and 2022 could generate up to R175 billion annually. In the process, they could create job opportunities for nearly 1 million unemployed South Africans.

Women have business and leadership skills that are not currently being tapped. Additionally, research by Harvard Business Review has found that women outscore men in many leadership competencies. For example, women outranked men in:

• Taking initiative

• Developing colleagues or mentees

• Integrity and honesty

• Bold leadership

Just imagine the impact increasing the female entrepreneurial activity rate could have on South Africa’s economy!

Although female entrepreneurs in South Africa are making progress in closing the gender gap, challenges still persist. They still access fewer business networking opportunities and have limited access to capital and limited mentorship. 

Why women in business succeed: how business insurance can help them

Business success is often about leadership. In addition to the leadership skills mentioned, other elements equip women to succeed in business.

• Women are better communicators: According to Entrepreneur[2] effective communication is the mark of successful business owners. Since women are good at listening, reading nonverbal cues and displaying empathy — essential communication qualities — they can form strong relationships inside and outside of their organisations. From these relationships, they can improve efficiency within their companies and generate sales from their target markets.

• Women have a higher emotional intelligence quotient (EQ): Running a business involves dealing with various types of people, including colleagues, employees, customers and suppliers. The ability to win people to your way of thinking and being empathetic can lead to business success. 

This is because you need to connect with staff and customers at a level for them to want to do business with you. Women are good at this, which helps considerably when building a business.

• Women are better at multitasking: Women are known to function in multiple roles simultaneously and perform them well. For example, they can run their own families, lead religious institutions, hold leadership roles in the community and be effective business owners. 

• Women are not afraid to take risks: Taking financial risks is one of the things entrepreneurs, both men and women, cannot do without. However, the Center for Entrepreneurship has found that more women than men consider themselves financial risk-takers.

• Women know how to collaborate: There’s an African proverb loosely translated as “No one finger can pick up numerous corn seeds”. Collaboration is necessary for successful entrepreneurship, and women tend to value the input of others.

• They’re good at negotiating: Successful negotiators understand the needs of the party at the opposite end of the table. Armed with empathy and practical communication skills, women generally win others to their way of thinking more than men do. This gives them an advantage at the negotiation table, which means that they tend to be better at resolving conflicts. Business endeavours fare better because women value fairness.

Although women succeed in business because of the above-mentioned qualities, you still must protect your investments. Building a successful business takes money, courage, effort, and time.

No female entrepreneur can afford to watch helplessly as her hard-earned investment fails due to unforeseen events. This is where having business insurance is important.

5 types of business insurance female entrepreneurs need

Whether you run a restaurant, clothing shop, construction company, salon, or accounting firm, you have to consider business risks. For example, you may provide your client with advice that leads to financial loss, or your premises could cause injury to a member of the public. This is why you must identify and take out the right kind of small business insurance.

There are numerous reasons for having insurance for business. For example:

• The law requires it

• It protects against loss or damage to property 

• It protects against theft, fire and natural disasters

There are five types of insurance for businesses you may need:

• Errors and omissions insurance: insurance that covers you in case claims are made against you due to inaccurate advice or negligence that leads to a financial loss 

• Business vehicle insurance: this insurance covers your business vehicles in case they’re stolen, damaged or involved in a car accident.

• Public liability insurance: protects you and your employees if you’re held liable for third-party claims, such as an injury to a customer at your workplace.

• Commercial property insurance: this insurance protects your premises against loss or damage due to perils such as a natural disaster, theft or fire.

• Worker’s compensation insurance: protects you if an employee incurs an injury or illness while on duty. It covers medical costs and may provide cash benefits as well.

You can inform yourself further by looking at First for Women’s Small business insurance tips for entrepreneurs.

Get business insurance from First for Women

When you are ready to protect yourself and your business from unforeseen circumstances such as theft, loss or damage to property, contact First for Women. We support female entrepreneurs and look forward to helping you succeed. The process is simple: request a free and no-obligation online business insurance quote.

Sources:

[1] Mastercard.com The Mastercard index of women entrepreneurs 

[2] Gemconsortium.com Igniting startups for economic & social change 

[3] News24.com The ‘she-cession’: women entrepreneurs are key to South Africa’s socioeconomic success 

Harvard Business Review: Research: women score higher than men in most leadership skills

Disclaimer: The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice. First for Women is a licensed non-life Insurer and FSP. T’s & C’s online.