Women-led businesses are more profitable: studies

March 10, 2021 7 min read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

Opinions expressed by Entrepreneur contributors are their own.

The participation of Mexican women in entrepreneurship is lower than that of men, because according to the Radiography of Entrepreneurship in Mexico 2020 , carried out by the Association of Entrepreneurs of Mexico ( ASEM ), only 39% of the country’s companies they were founded by women.

However, female-led organizations are more profitable , perform better, and have higher profit margins compared to male-led companies. S & P’s When women lead, firms win report notes that these economic benefits translate into profits of up to $ 1.8 billion globally.

“Breaking gender gaps and equalizing the participation of women in entrepreneurship is key to boosting the country’s economic development, especially after the COVID-19 pandemic, which left a large number of Mexicans without jobs or reduced their income level. Encouraging and promoting women entrepreneurs will not only contribute to the economic reactivation, but also to improve the quality of life for the 28.5% of households in Mexico in which the only livelihood is a woman ”, says Juana Ramírez, president of the ASEM.

The report Women entrepreneurs: an unexplored investment opportunity , from the Inter-American Development Bank (IDB), reports on the importance of betting on female entrepreneurship, since despite the fact that in Latin America they receive up to 50% less investment, their companies achieve revenues up to 20% higher than their male peers. “In addition, SMEs led by women have a 54% lower probability of default than those led by men,” indicates the IDB.

For its part, the study Gaps for Entrepreneurship , carried out by the Association of Entrepreneurs of Latin America (ASELA), states that in the region gender gaps are more accentuated, because “although women represent 40% of the population economically active in Latin America, their participation as entrepreneurs does not exceed 15% ”, she details.

Talent has no gender

Women have been systematically excluded from the labor market and their possibilities for professional development have been limited. Data from the International Labor Organization (ILO) indicate that although they dedicate more time to their work activities, the remuneration they receive is on average 25% lower than that of men.

In this scenario of unequal working conditions, entrepreneurship has been the answer so that thousands of women can improve their income; however, the challenges they face are not minor.

Data from the X-ray of Entrepreneurship in Mexico reveal that the factors that influence the failure of companies are not the same for men as for women since, for 23% of them, time availability is one of the main causes for those that your business does not grow; on the other hand, for them time is not a limitation. “This is due to the fact that housework and care of children or relatives continue to be responsibilities that are delegated to women, however the talent for entrepreneurship has no gender,” adds Juana Ramírez.

For its part, the Organization for Economic Cooperation and Development (OECD) recognizes that women face more challenges in opening and growing a business. “Among them, it is more difficult for them to have access to initial financing, they find smaller or less effective business networks and public policy frameworks that discourage female entrepreneurship,” says the agency.

Furthermore, cultural gaps are another obstacle, since “being an entrepreneur is thought to be a ‘masculine’ concept … This could lead to less ‘legitimate’ female entrepreneurs being considered, which affects market positioning and image of women-owned businesses, restricts the flow of essential resources and prevents the full realization of their entrepreneurial potential ”, indicates the OECD.

In Latin America they receive up to 50% less investment / Image: Depositphotos.com

More diversity, more wealth

Including effective gender equality actions in companies and public policies can help increase female participation in national entrepreneurship, and with it the value of companies.

Women in business leadership positions are key to creating stronger companies, as they provide a vision that enriches decision-making, while creating more equitable work teams and with work environments that promote development, respect and creativity.

“Talking about the success stories of women entrepreneurs is the first step to make their work visible and give them the recognition they deserve, but it can also serve as inspiration for many others who are just starting to start or who are in charge of their businesses” , says Jorge Corral, executive director of ASEM.

ASEM bets on them

ASEM has implemented various actions to promote female entrepreneurship. One of them was to include in its Entrepreneurship, which is a series of 10 proposals to promote entrepreneurship in the country, a point with a gender perspective.

Point 8 of the document points out the importance of improving the conditions in which women undertake, since data from the study Gaps for Entrepreneurship in the Pacific Alliance, carried out by the IDB and ASELA, refer that in the region, 90 % of those who access private financing are men.

In addition, the association has permanent policies that urge that there be gender equality, since in all its programs they promote a 50/50 participation of male and female entrepreneurs.

They have also carried out activities such as conferences and panels aimed at them, where they share success stories, experiences and challenges of entrepreneurship led by women. Likewise, it monitors obstacle and failure metrics for companies led by women, which will be included in later editions of the X-ray of Entrepreneurship in Mexico .

Shortly, ASEM will announce a program aimed at female entrepreneurs from all over Latin America, which will have access to mentoring and other high-value benefits for the management of their companies. This activity will be carried out with the collaboration of important strategic partners.

No Comments Yet

Leave a Reply

Your email address will not be published.


The Abundance Pub (TAP) is a media source dedicated to all things positive in the world. Focusing on Health, Wealth and Happiness. The Abundance Pub serves as repository of positive news articles, blogs, Podcasts, Masterclasses and tips to help people live their best life!


Message From Founder