Measuring Problems and Prospects of Women Entrepreneurs: an Empirical Insight on Beauty Parlor Business in Bangladesh

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1 Measuring Problems and Prospects of Women Entrepreneurs: an Empirical Insight on Beauty Parlor Business in Bangladesh Naznin Alam, Faria Kabir 2 Corresponding Author, Lecturer, Department of Business Administration, Stamford University Bangladesh, 5, Siddeaswari Road, Dhaka 27, Bangladesh 2 Assitant Professor, Department of Business Administration, Stamford University Bangladesh, 5, Siddeaswari Road, Dhaka 27, Bangladesh Abstract Women entrepreneurship has been playing a pivotal role in terms of economic growth, employment generation and industrialization. Beauty consciousness has dawned on rising affluence. Likewise other business women are now engaged in beauty parlor business. The aim of this study is to have an overview of the existing socio-economic situation of women entrepreneurs in line with their problems and prospects in beauty parlor business. To find out a justified result the study has conducted based on both primary and secondary data. An attempt has been made through factor analysis to identify the obstacles women entrepreneurs of Bangladesh face when starting their own business, the socio-economic barriers and managerial and technical constraints. The study also explored that women are increasingly participating to beauty parlor industry in spite of facing several challenges; they have to be given the opportunity to extend their scope in beauty parlor business. The findings of the study are discussed to arrive at suitable conclusion and suggestions. Keywords: Women Entrepreneurship, Beauty Parlor, Socio-economic Problems. Introduction It is inspiring that a new women entrepreneur s class is increasingly emerging in Bangladesh by taking the challenge of working in competitive and complex economic and business environment. Most of the women are now showing their preferences towards the entrepreneurship rather than going into the fields of professional as well as various services. Now a day s women are choosing both the traditional (pickle making, candle making, etc.) as well as the nontraditional (garment shop, beauty parlor, computer-training etc.) activities and are performing well enough (Gajendra & Himnish, 204). At present the participation of women in beauty parlors business in Bangladesh is prominent. This business has benefited entrepreneurs to gain economical and social independence. Their entrepreneurship not only improves their living conditions and earns them more respect in the family and the society, but also contributes to business, supplies, employment generation, productivity and skill development. Thus, women entrepreneurs have a special role to play in creating empowerment and establishing entitlement at all levels of socioeconomic development (Choudhury, Hossain & Solaiman, 2008). In Bangladesh, women are actively participating in many productive sectors despite the importance of women entrepreneurship, little research has been conducted particularly on women entrepreneur s in beauty parlor business. So, it has become important to analyze several factors and issues in support of and against women entrepreneurship in this industry. This is borne out of the fact that women empowerment is central to human development and national advancement. Women entrepreneurs also enhance living standard of their family which in turn help in development of the country. Entrepreneurs are regarded as backbone of any economy. 289

2 Today with growing fashion people want to look more beautiful and fit. So, parlors play crucial role in fashion industry. Often due to socio-cultural barriers Bangladeshi women are not allowed to go outside and do business. Consequently, they can start microenterprise like beauty parlor in their home after doing some training or diploma or certificate courses. Thus, parlors are proved to be an important field of business for women empowerment. Objectives of the Study This paper highlighted on the women entrepreneurs in the beauty parlor business and tries to addresses the barriers of socio-economic empowerment and importance of sustainable development of entrepreneurship in Bangladesh. To accomplish this, the study will cover the following aspects: Identify the degree of influence of socio- economic factors on women entrepreneurs in the beauty parlor business. To understand the problems of business operation of women entrepreneurs Explore future prospects for women entrepreneurs in this business. To understand and give solution to the problems of women entrepreneurs. Literature Review Women entrepreneurs represent a group of women who have broken away from the beaten track and are exploring new avenues of economic participation (Dhameja, 2002). Like many developed and developing countries the economic empowerment of women is believed to work as a catalyst for economic growth and development in Bangladesh. Evidence shows that involvement of women in entrepreneurial activities can improve their social status and contribute to economic growth (Newaz, 202). The emergence of women entrepreneurs in a society depends mainly on economic, social, religious, cultural and psychological factors (Habib et.al., 2005). The reason behind their interest on becoming an entrepreneur is enormous. Liebow (99) revealed that social issues and problems act as impetus for women to start a business. However, the main motivating factors for women entrepreneurs are economic compulsion, need for achievement, inspiration gathered from the success of others and frustration in the present occupation etc (Azad, 982). In Bangladesh women entrepreneur have come a long way in breaking the barriers of social conventions and stereotyping that have kept women outside of business though in first phase they work only for survival (Haidar & Akhtar, 999). In fact, women entrepreneurship development is a challenging phenomenon in Bangladesh as women are lagged behind socially and economically (Haque & Itohara, 2009). Nevertheless, their significant contribution in economy is not recognized properly. Women entrepreneurs have to encountered different types of obstacles in starting and running a business which includes lack of confidence, funding, access to business networks, family hostility, and culture of masculine advantage and challenges of ethnicity (Gill & Ganesh, 2007). According to World Bank (2003) women entrepreneurs also face severe constraints in terms of managerial and quality control skills, basic knowledge about the industry and market and of course, access to markets. In this context the development of beauty parlor industry in Bangladesh flourishes silently. According to the recent studies, it is suggested that the beauty salon industry is worth around BDT 290

3 0 billion and it is growing each day. The sector has been contributing to the economy of the country by employment and revenue generation (IDLC, 204). However, most challenging aspects of being in beauty parlor profession was getting social acceptance and respectability, since this is a profession quite different from being a doctor, or banker or even the traditional and conventional professions associated with women. In considering the social status, many of them informed that the impediments came from parents who did not like them to enter into business. (MIDAS, 2009). In addition, ensuring access to finance is the most important prerequisite that an entrepreneur must have to operate a beauty salon business. Unfortunately, for women entrepreneurs it is not that easy to avail loan facility from banks and financial institutions, since most of them face problems in providing collateral for security purpose and another critical problem is having trade license/registration because bank do not provide loans without trade license (IDLC, 204). In contemporary Bangladesh, the socio cultural values and norms has a strong influence on the issue of women discriminations. It is well established that in Bangladesh women or girl are everyday targets of discrimination within their household (Zaman, 999). Women Entrepreneurs need encouragement and support from their families, social circles and most importantly the government. Government should make initiations to provide financial supports to women entrepreneurs (Shashtri and Sinha, 200). Hence, this paper has taken a step to identify and explain the most important issues for women entrepreneur s from the perspective of Bangladesh. Data and Methodology Data: Total 50 respondents are taken from Dhaka city to fill up a well constructed questionnaire. Most of them are HSC pass. Some of them are graduate and a very few are SSC pass. Age limit of the women was 20 to 30 years old. Maximum of them are married. Study Period: The duration of this research was from August 204 to December 204. Factor Analysis: Factor analysis is a very well known statistical method. Variability among observed and correlated variables, in terms of a potentially lower number of unobserved variables that are called factors can be described by this analysis. By factor analysis we can show that variations in four observed variables can reflect the variations in two unobserved variables. It has to be done when in Bartlett s test of Sphericity the p-value is less than p-value is a function of the observed sample results (a statistic) that is used for testing a statistical hypothesis. Then we can say, at least some of the variables have significant correlations. Then the factor analysis can be done. Findings and Analysis: In this paper, the factor analysis is done to see which factors are most important in eight different situations for women entrepreneurs in Bangladesh.. Major problems faced in family Table.: for Major problems faced in family Total % of Variance Cumulative % Total % of Variance Cumulative %

4 The Extraction Method is Principal Analysis. We can have 77% variation if we just Table.2: Matrix for Major problems faced in family Major problem: Parents did not want them to be in business.90 Major problem: Husband did not approve their profession as entrepreneur.866 Major problem: In-laws did not like their free movement outside homes.890 Major problem: The women did not spend for family purpose.857 Based on the above factor loadings the factor represents the first variable most. Hence, the major problem faced by family is that their parents did not want them to be in business. 2. Facilities provided to women Entrepreneurs Table 2.: for Facilities provided to women Entrepreneurs Total % of Variance Cumulative % Total % of Variance Cumulative % The Extraction Method is Principal Analysis. We can have 86% variation if we just study one component only. Only one component is extracted so rotated component matrix is not Table 2.2: Matrix for Facilities provided to women Entrepreneurs Facilities provided: Lack of information about business opportunities.942 Facilities provided: Lack of information about training centers.944 Facilities provided: Lack of information about SME loan facilities.894 Based on the above factor loadings the factor represents the second variable most. Hence, lack of information in training centers is a major problem to them. 3. Problems encountered in daily activities Table 3.: for Problems encountered in daily activities Total % of Variance Cumulative % Total % of Variance Cumulative %

5 The Extraction Method is Principal Analysis. We can have 86% variation if we just Table 3.2: Matrix for Problems encountered in daily activities Daily activities: High labor costs and unskilled labors.890 Daily activities: Workers lack of sense of duties and responsibilities.956 Daily activities: High turnover rate.905 Daily activities: Unethical activities like stealing enterprise products.948 Daily activities: Worker s left work for household works during working hours as giving lame excuse.98 Daily activities: Violated organizational rules and regulations.933 Daily activities: Security problems faced in business and at work.949 Based on the above factor loadings the factor represents the second variable most. Hence, the major problem in their daily business is, workers have lack of sense of duties and responsibilities. 4. Problems faced by women in business Table 4.: for Problems faced by women in business Extraction Sums of Squared Loadings Total % of Variance Cumulative % Total % of Variance Cumulative % The Extraction Method is Principal Analysis. We can have 83% variation if we just 293

6 Table 4.2: Matrix for Problems faced by women in business Problems faced: Lack of capital.97 Problems faced: Lack of experience.975 Problems faced: Lack of sufficient raw materials, technology, suppliers.848 Problems faced: Lack of marketing opportunities.952 Problems faced: Delay of loan processing and non-cooperation from banks.75 Problems faced: Lack of information regarding SME loan.975 Problems faced: High income tax.92 Problems faced: Lack of Govt. incentives.836 Problems faced: Sexual harassment.95 Problems faced: Increase rent of the shop by landlord.897 Based on the above factor loadings the factor represents the second variable most. Hence, lack of experience has often become a major problem in business for women. 5. Reasons for not having registration Table 5.: for Reasons for not having registration Total % of Variance Cumulative % Total % of Variance Cumulative % The Extraction Method is Principal Analysis. We can have 88% variation if we just Table 5.2: Matrix for Reasons for not having registration No registration: Afraid of the long procedure.967 No registration: Didn t have enough knowledge about registration.840 No registration: Harassment from officials.973 No registration: Excess charge of trade license.980 No registration: Before registration compulsory TIN certificate was a problem.935 Based on the above factor loadings the factor represents the fourth variable most. Hence, the major reason for having no registration is excess charge of trade license. 294

7 6. Hindrance to marketing of products Table 6.: for Hindrance to marketing of products 295 Total % of Variance Cumulative % Total % of Variance Cumulative % The Extraction Method is Principal Analysis. We can have 8% variation if we just Table 6.2: Matrix for Hindrance to marketing of products Hindrance of marketing: Lack of suitable market.872 Hindrance of marketing: Problems of customer taste.957 Hindrance of marketing: Fluctuation of prices.963 Hindrance of marketing: Competition of quality.94 Hindrance of marketing: Religious barrier.92 Hindrance of marketing: Lack of Advertisement.946 Hindrance of marketing: Transportation problem for marketing.856 Hindrance of marketing: Lack of proper marketing policy for beauty parlor.740 Based on the above factor loadings the factor represents the second variable most. Hence, the major hindrance to marketing of products is problems of customer taste. 7. Dimension of challenges Table 7.: for Dimension of challenges Total % of Variance Cumulative % Total % of Variance Cumulative %

8 The Extraction Method is Principal Analysis. We can have 84% variation if we just Table 7.2: Matrix for Dimension of challenges Dimension of challenges: Religious leaders do not approve of women in business.927 Dimension of challenges: Negative attitude of social leaders.963 Dimension of challenges: Conservative society does not allow women in business.890 Dimension of challenges: The women are not equally accepted as male entrepreneurs.924 Dimension of challenges: Large beauty salons create negative impact on small business.897 Dimension of challenges: International market competition creates additional threats.885 Based on the above factor loadings the factor represents the second variable most. Hence, the major dimension of challenges is negative attitude of social leaders of our country. 8. Overall suggestions Table 8.: for Overall suggestions Total % of Variance Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Cumulative % of Cumulative % Total % of Variance Cumulative % Total Variance % The Extraction Method is Principal Analysis. We can have 86% variation if we study two components only. Table 8.2: Matrix for Overall suggestions Overall suggestions: BD Govt. Policy needs to give special attention to Women Entrepreneurs particularly this sector Overall suggestions: Organize vigorous awareness program to change the attitude of people(religious leader, family, society head) towards women entrepreneurship and to stop eve-teasing Overall suggestions: Establish technical institutes for product development Overall suggestions: Loan procedure needs to be more user friendly Overall suggestions: ensure secured business environment for the WE Overall suggestions: well organized women association is needed to solve women entrepreneurs problems

9 Extraction Method is Principal Analysis. More than one component is extracted so rotated component matrix is Table 8.3: Rotated Matrix for Overall suggestions Overall suggestions: BD Govt. Policy needs to give special attention to Women Entrepreneurs particularly this sector Overall suggestions: Organize vigorous awareness program to change the attitude of people(religious leader, family, society head) towards women entrepreneurship Overall suggestions: Establish technical institutes for product development Overall suggestions: Loan procedure needs to be more user friendly Overall suggestions: ensure secured business environment for the WE Overall suggestions: well organized women association is needed to solve women entrepreneurs problems Finally, the Rotated Matrix shows the factor loadings for each variable. Rotation Method is Varimax with Kaiser Normalization. Rotation converged in three iterations. Based on the above factor loadings, for the first component we have to consider the second, third and fourth variables. Then, for the second component we have to consider the first, fifth and sixth variables. Conclusion In this parlor business, women have to face various kind of problems. The major problems according to this research are firstly their parents did not want them to be in business. Secondly, lack of information in training centers became a major problem to them. Thirdly, the major problem in their daily business was workers have lack of sense of duties and responsibilities. Fourthly, lack of experience often started a major problem in business for women. Fifthly, the major reason for having no registration in their business was excess charge of trade license. Sixthly, the major hindrance to marketing of products was problems of customer taste. Taste changes through time to time. Sometimes they can t cope up with it. Seventhly, the major dimension of challenges was negative attitude of social leaders of our country. This sector is not well appreciated by our society. Overall suggestions should be BD Govt. Policy should give special attention to Women Entrepreneurs particularly this sector. We should also organize vigorous awareness program to change the attitude of people (religious leader, family, and society head) towards women entrepreneurship. Thus, we can see this parlor sector is becoming more and more popular day-by-day. Therefore, we should be more careful for making this sector popular. It has already opened a huge way of employment opportunity for women. Recommendations. Importance of Moral support Family members and social support is essential for women entrepreneurs to star their business. Providing personal support can be financial, ethical and motivating women to feel confident to cheese their dreams. Involving social key persons (School teachers, Religious leaders, Chairman and local clubs) will influence positively the women in entrepreneurship development. It will nourish their creativity and decision making ability in business operation as well as define their unique social status. 297

10 2. More promotional activities required for training centers Training institutes can support proper guideline to women entrepreneurs academic knowledge and additional skills to run their beauty parlor successfully. It will also help entrepreneurs to gain initial experience and providing ultimate satisfaction to their clients. Lack of information regarding training centers can be mitigates through appropriate advertising channels (private & government media). Business leaders in beauty industry can also promote workshops, consultancy to facilitate training opportunity for entrepreneurs. Government, NGOs etc should establish sufficient number of International Standard Beautification training institutes and should aware properly about training programs. 3. Providing marketing support for identifying customers preferences Developing research centre in training institutes can serve the purpose and facilitate to understand, analyze the customer demand, needs and choices. Organizing annual exhibition on beauty products can be another way for women entrepreneurs to communicate with customers and business communities which will help them to realize the fashion trends and clients preferences. 4. Providing easy procedure of registration/ trade license and Government support Issuing of trade license should be made simply and free for women entrepreneurs and structured business policy for beauty parlor business needs special consideration. Government should initiates vigorous awareness program to change people s perception about this industry in Bangladesh. The creation of government offices of women business ownership could facilitates women in beauty parlor business and provides them legal support. In addition long term and low interest free loan should be available. Thus cooperation between government and private organizations in beauty parlor business can facilitate entrepreneurial endeavors. References. Nawaz, Faraha (2009) Critical Factors of Women Entrepreneurship Development in Rural Bangladesh, Bangladesh Development Research Working Paper Series (BDRWPS), BDRWPS 5 (May); available at: 2. Women Entrepreneurs in SMEs: Bangladesh Perspective MIDAS, November 2009, 3. IDLC monthly Business Review, Volume 0, Issue 7, Zaman, H 999, Violence against Women in Bangladesh: Issues and Responses Women s Studies International Forum, 22(). pp Haque, M, Itohara Y 2009, Women Empowerment through Participation in Micro- Credit Programme: A Case Study from Bangladesh, Journal Social Science,5(3), pp Haidar, R., & Akhtar, R. (999). The Role of NGO and Women s Perception of Empowerment: An Anthropological Study in a Village. Journal of Women for Women, 6, World Bank. (2003). South Asia Enterprise Development Facility Annual Report. Washington, DC. 8. Gill, R. and Ganesh, S. (2007) Empowerment, Constraint, and the Entrepreneurial Self: A Study of White Women Entrepreneurs, Journal of Applied Communication Research, 35 (3): Azad G S (982), Development of Entrepreneurship among Indian Women: A psychological Analysis, SEDME, Vol.6 0. Leibow C (99), Necessity Mothers a child care Invention, Nations Business, June Issue. 298

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