by Daphney Klopper

In the world of business, the narrative that women are more risk-averse than men has persisted for decades. But is this perception rooted in reality, or is it a convenient stereotype that overlooks deeper, systemic issues?

Understanding Risk and Risk Appetite

Risk, in a business context, refers to the potential for loss or failure when making decisions. A risk appetite is the level of risk an individual or organization is willing to accept to achieve their goals. This appetite varies widely among individuals, influenced by personal experiences, cultural norms, and societal expectations.

The Perception of Risk Aversion

Studies have often suggested that women are more risk-averse than men. This perception is partly based on observed behaviors in financial decision-making and investment strategies. However, these studies frequently fail to account for the broader context in which women operate.

The Reality: Systemic Barriers and Responsibilities

Access to Capital: Women entrepreneurs often face significant barriers in accessing capital. Financial institutions may perceive women as higher-risk borrowers, leading to fewer opportunities for funding. This lack of access can force women to adopt more conservative business strategies.
Social and Cultural Norms: In many societies, women are expected to prioritize family responsibilities over professional ambitions. This dual burden can limit their ability to take on high-risk ventures, not because they lack the appetite for risk, but because they must navigate a complex web of responsibilities.
Legal and Structural Constraints: In some regions, legal frameworks and business environments are not conducive to female entrepreneurship. Women may face legal restrictions on property ownership, inheritance rights, and access to financial services, further constraining their ability to take risks.

Focus and Business Strategies

Another common stereotype is that men tend to focus intensely on a single business goal, risking everything to achieve it, while women are perceived as being more scattered in their approach. This perception fails to recognize the multifaceted roles women often play and the strategic diversification they employ.

Strategic Diversification: Women entrepreneurs often diversify their business interests to mitigate risk and ensure stability. This approach is not a sign of lack of focus but a strategic decision to balance multiple responsibilities and safeguard against potential failures in any single venture.
Multitasking and Management: Women frequently manage multiple roles simultaneously, both in their professional and personal lives. This ability to multitask can translate into a business strategy that involves managing various aspects of a business effectively, rather than focusing narrowly on one area.
Holistic Business Models: Women are more likely to adopt holistic business models that integrate social, environmental, and economic goals. This broader focus can lead to more sustainable and resilient business practices.

Challenging the Stereotype

The notion that women are inherently more risk-averse than men is a simplification that ignores the structural and societal barriers they face. When given equal access to resources and opportunities, women demonstrate comparable, if not greater, entrepreneurial spirit and innovation.

Moving Forward

To foster a more inclusive business environment, it is crucial to address the systemic barriers that limit women’s participation in high-risk, high-reward ventures. This includes:

Improving Access to Capital: Financial institutions should develop products and services while understanding and researching women entrepreneurs.
Changing Cultural Norms: Societal attitudes towards gender roles need to evolve to support women in balancing professional and personal responsibilities.
Legal Reforms: Governments should enact and enforce laws that promote gender equality in business.

Your Role in Supporting Women-Owned Businesses

While not everyone has the resources to invest directly in women-owned businesses or change laws, everyone can make a difference through their daily choices. Here are some practical steps you can take:

Support Women-Owned Businesses: Choose to buy from women-owned restaurants, service stations, clothing stores, grocery stores, online shops, beauty salons, fitness centers, bookstores, cafes, consulting firms, tech startups, streaming services, vehicle manufacturers, home decor shops, and travel agencies etc and etc.
Be Conscious of Your Choices: When selecting suppliers or service providers, consider their ownership. Opt for those that support gender equality.
Spread Awareness: Encourage others to support women-owned businesses. Share your positive experiences and promote these businesses on social media.
Advocate for Change: Use your voice to advocate for policies that support women entrepreneurs. Join or support organizations that work towards gender equality in business.

By making conscious choices and supporting women-owned businesses, you can help create a more equitable business environment. The power of the wallet is often the only thing that will make businesses take notice of their own policies and structures that are unequal.

Dare to be aware and dare to change your behavioral patterns. Every small action counts towards a larger impact.

Daphney Klopper is a dynamic leader in the property industry and a passionate advocate for diversity, equity, inclusion, and belonging (DEIB). As the Founder and Director of The Hive, Accelerating Women in Business in South Africa, she empowers women and drives change. With qualifications as a Principal Property Practitioner (NQF 5) and Property Practitioner (NQF 4), and studies on Leading Diversity and Inclusion at Work from UCT, Daphney brings a wealth of knowledge to her roles. She serves as the Property Sector Lead for the Western Cape at WECONA, the Women’s Economic Assembly, and is a member of the Woman in Property Network (WPN) and the Cape Chamber of Commerce (CCOC). Daphney has led The Hive, focusing on accelerating women in business.