A new report by PayPal Canada and Barraza & Associates has found that businesses owned by women generate an average of $68,000 less revenue than men who run similar businesses, representing a 58 percent gap.
To develop the report, PayPal Canada and Barazza & Associates conducted an online survey of 1,000 Canadian small and medium-sized businesses between January 26, 2018 and February 28, 2018. The survey’s goal was to assess the gap in earnings between male and female entrepreneurs, as well look at the impact of ecommerce tools on women-led businesses.
The report found that of online businesses that launched over the past two years, 50 percent of them were owned by women, compared to 10 years ago, when only 34 percent of online businesses were owned by women.
The report found that women who do secure external financing through a line of credit or loan, report earning double the revenue of women entrepreneurs who cannot secure external investments.
When it comes to the impact of using ecommerce tools, the report found that 73 percent of women entrepreneurs said ecommerce contributes to their sustained growth and success. Eighty-five percent of women entrepreneurs said that selling their products and services online would help them keep up with the competition, while 61 percent of women entrepreneurs said selling internationally has also made their small businesses more successful. In comparison, 60 percent of male entrepreneurs said they would attribute ecommerce to their success, while 74 percent said selling online would give them a competitive advantage.
When it comes to the revenue gap between women and men-owned businesses, the report found that the gender revenue gap is slightly smaller for businesses operating online, at $55,000 (44 percent), compared to offline businesses, which had a gap of $71,000 or 64 percent. Women entrepreneurs who use ecommerce tools reported that they earn 75 percent more revenue than women entrepreneurs who don’t sell online. The report suggests that using taking businesses online could be part of bridging the revenue gap between women and men-owned businesses.
The report notes that while women entrepreneurs using ecommerce tools might have a competitive advantage, one barrier to growth for them is limited access to capital. The report indicated that almost half (47 percent) of women-owned businesses that use ecommerce tools have difficulty securing external investment that is needed to scale, and the lack of access to capital can lead to financial strain. In comparison, 67 percent of men with online businesses find it easier to access capital.
In addition, while 70 percent of women with online businesses experience personal credit card debts, the report found that women who do secure external financing through a line of credit or loan, report earning double the revenue of women entrepreneurs who cannot secure external investments.
“Supporting women entrepreneurs is critical to Canada’s long-term economic prosperity,” said Paul Parisi, president of PayPal Canada. “At PayPal, we are focused on offering accessible e-commerce solutions that help people start and grow their businesses. Helping women entrepreneurs thrive in the digital economy is an important part of what we do every day.”
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