Men and Women Entrepreneurs
Driven by different motivations
By: Joyce Smith
Men may be from Mars and women from Venus when it comes to relationships, but how about when it comes to entrepreneurship?
A recent report by the U.S. Small Business Administration looked at 685 businesses that started between 1998 and 1999. Although the study showed more similarities than differences between men and women, it indicated that women-owned businesses on average were lagging male-owned businesses on such factors as annual sales, employment growth, income and venture survival.
“Usually men tend to be more risk-prone and women were more likely to have positive revenues and prefer lower-risk-to-return businesses. I think relationships are stronger with women-owned businesses and perhaps financial considerations are stronger with men,” said Wendell Bailey, Kansas City-based regional advocate, Office of Advocacy, at the SBA. “Those are findings that I think the general public agrees with.”
The general public, perhaps, but not some local and national small-business experts.
“There are comments about women not working as many hours, not making as much money, and they are simply looking for balance — true and not true,” said Candy Whirley, co-author of Ordinary Women … Extraordinary Success and a Kansas City-based professional speaker.
“Bottom line, women are looking for balance, what makes their heart sing, independence and what will bring enough money in the house to be comfortable. They are searching for fulfillment in their personal lives and in their professional lives. We want it all, and we are getting it.”
The SBA study included these findings:
Motivations for starting a business
Women are more likely than men to start businesses to achieve a work-family balance. Women also more often listed a desire for self-fulfillment and job satisfaction as reasons for starting a business and wanted to be challenged personally and have self-determination. They also are more likely to start a business to gain the recognition of others. Men are more likely to start a business to make money or build a company.
Sherry Turner, executive director of the Kansas Women’s Business Center in Lenexa, which helps women entrepreneurs grow their businesses, said women do tend to start small businesses because they need more flexibility in their work schedules.
“They are trying to figure out what business they want to start that will make their lives more fulfilling,” Whirley said.
Effort expended on business creation
Researchers have found that female entrepreneurs, on average, work fewer hours than male entrepreneurs. In particular, women invest less time in the development of their businesses than men.
Men may work more hours because their goal is usually to earn money and because they face fewer demands for their time. Women tend to devote more hours to caring for children, parents and the household.
Turner disagreed, saying she sees women putting in 24/7 days.
“They still do the family functions when they need to — the doctor’s visits, the soccer tournaments — and they put a load of laundry in at 10 p.m.,” Turner said. “Then they may be working on their business at 3 in the morning. Women probably aren’t giving themselves credit for certain hours they are working.”
Whirley said women often open more than one business.
Paula Jagemann is an example. Jagemann is founder and director of eCommerce Industries Inc., a $100 million software company based in Fort Worth, Texas, a nationally known speaker (she will speak on growing a small business at The Central Exchange’s Women’s Lyceum in April) and president of the only bioscience and information technology business incubator in Frederick, Md.
“The 24/7 rule applies to all, but I generally find women to be more multitask-oriented and efficient — we have to be,” Jagemann said. “More role models/success stories will help fuel this entrepreneurial fire and spur interest in younger girls to pursue math and science fields, as well.”
Many business opportunities are identified through social networks, but women have different social networks than men, so they have different sources of information about opportunities.
Women are thought to learn from a greater variety of sources than male entrepreneurs, while male entrepreneurs are thought to learn more from setbacks than female entrepreneurs.
“Kansas City has numerous women role models in all sizes of businesses,” said Karen M. Zecy, president of American Micro Co., a Kansas City-based document management services company. “Many women have often commented to me about the encouraging environment and camaraderie among women business owners in Kansas City.”
But Turner said women often cannot take on one more task because of their family responsibilities and must be strategic in their networking.
Type of business
Female-led businesses are more likely to have personal services and retail trade operations and less likely to be in manufacturing and high technology. Women start businesses that are less growth-oriented and less driven by opportunity. According to some researchers, women tend to work in certain occupations and industries because they are more socially acceptable for women.
Again, Turner disagreed.
“The industries with the highest failure rate — retail and restaurants — are very female-dominated,” Turner said. “True entrepreneurs are looking for challenges and how to get through the hurdles.”
Bailey, of the Office of Advocacy, concedes there are strong exceptions to these stereotypes.
“While women are thought be the candle-and-soap business, there are women like Kathy Bennett (head of Bennett Packaging of Kansas City Inc.), who runs one of the largest packaging companies in the Midwest,” Bailey said.
On average, women start businesses that are smaller than those started by men. The smaller scale may be because they lack access to larger-scale business opportunities and the financial resources necessary to develop them.
“There are a rising number of women-only business loans and angel investing companies than ever before,” Jagemann said. “Also, there is a growing number of women in venture capital firms. The tides are turning, but ever so slowly.”
Expectations for venture performance
On average, female entrepreneurs do not have as many expectations for their businesses as male entrepreneurs. Women are more likely to set limits beyond which they do not want to expand their businesses to ensure that they do not adversely affect their personal lives.
Men have greater confidence in their entrepreneurial abilities than women, so they form greater expectations for their businesses.
Social norms about the role of women, the shortage of female role models and the greater household burdens faced by women lead female entrepreneurs to face more startup problems.
“I know from personal experience that the network of business, banking and investor relationships is key,” Jagemann said. “I doubt I could have raised $92 million in venture capital money had I not already been associated with a prior success story and known those individuals personally.”