What are the common reasons for failure at some women-led start-ups?
Members of Golden Bauhinia Women Entrepreneur Association share their experiences
A bad shareholding structure, too little focus and difficulty in hiring and sexism were some reasons cited by the Golden Bauhinia Women Entrepreneur Association for failure at some start-ups led by women.
Members of the association share their successes and failures with other female entrepreneurs as part of efforts to encourage more women to set up their own businesses. The association has teamed up with the Guangdong Women Entrepreneur Association as a sister organisation and the two associations have 4,500 members.
While only 10 per cent of directors in Hong Kong-listed companies are women, the city is taking the lead when it comes to female entrepreneurs.
Among all entrepreneurs in Hong Kong in 2015, 45 per cent were women, which is the highest ratio worldwide, only behind India where this number is 49 per cent, according to a BNP Paribas survey.
“It is important for us to share our experiences with other female entrepreneurs. We can thus learn from each other’s successes as well as mistakes,” said Clara Li Oi-kay, a member of the association and director of sales and brand development at jewellery retailer King Fook Holdings.
Before joining King Fook as a senior executive, Li cofounded an education centre with a partner in early 2000 but that eventually closed down in 2003 due to the outbreak of the Severe acute respiratory syndrome, which discouraged parents from bringing their children to the centre.
It was also because the company had a bad shareholding structure. “I and my partner were good friends so we decided to have a 50-50 shareholder structure. It is quite common for female entrepreneurs, as we want equal rights among us and we believe we can always negotiate our differences,” Li said.
“That was a mistake, as eventually we found we had a lot of differences over how to run the business. As there was no one with a majority stake, we could not decide on a future direction. When the business was bad due to the disease, we shut it down.”
WineWorld Xplorer founder and managing director Mariana Lam cofounded the company with two other partners 10 years ago, but they have since left the firm.
“Some women have the passion to set up businesses but they cannot stay on for long. It is very easy for them to feel exhausted after some years. Some would like to spend more time with their children. Those who are preparing to set up a business, they need to consider if they can afford to stay for a long term, for their start-ups to grow,” Lam said.
Lam said another challenge for her was hiring. “I found that many male staff members were not willing to listen to my instructions,” she said.
“I believe if I were a man, it would be easier to convince them to follow my decisions.”
Despite these difficulties, Li and Lam want more women to set up their own businesses.
“Hong Kong women are lucky as whether female and male, you have equal opportunities to receive education. We also have domestic helpers to help out with family responsibilities. Our society also supports women in setting up their own business,” said Carol Yau King-shan, president of the association.
She said a fast-growing economy has also encouraged many women to set up businesses in Hong Kong and Guangdong in recent years. “Social media breaks down geographic barriers, allowing us to reach overseas clients through Facebook and other internet platforms,” Yau added.