Despite the rapid growth of women-owned businesses, the average size of women-owned businesses is smaller compared to the average size of businesses owned by men, according to Sharon G. Hardy, in the article “Why Are Women-Owned Firms Smaller Than Men-Owned Ones?” According to the same article, the average revenues of majority women-owned businesses are nevertheless dwarfed by the revenues of majority men-owned businesses.
Though many of the businesses owned by women are thriving, the numbers suggest that something is holding women back.
Hardy believes some of the disparity stems from the goals women set for themselves, or the goals others set for them. Women tend to set lower goals for growth than men. Many workshops and seminars designed for women focus heavily on the start-up aspect of running a business, and don’t focus enough on long-term planning. Limited access to capital, markets, and networks can be a result of some women failing to be assertive and capitalize on relationships, but can also be the result of limiting mindsets of people in the community.
In “Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers”, a paper from the Ewing Marion Kauffman Foundation, more reasons for the lower numbers of successful female entrepreneurs are discussed. Women seem to stay with large companies or in structured academic settings, rather than pursue opportunities in private industry.
Both articles talk about the influence of many women’s desire to achieve a work/life balance, and how this may affect the scale of women’s goals when it comes to the size of her business. Many women like to oversee every aspect of her business, something she loses in a larger business setting.
To encourage female entrepreneurship, there are few steps we can take. We can challenge the existing belief structure that women-owned businesses do not have the capacity or potential of men-owned businesses. We can encourage female entrepreneurs and business leaders to act as mentors for other women who are considering entrepreneurship. We can support programs that encourage female entrepreneurship and setting big goals for growth.
John Bradley Jackson
Director, Center for Entrepreneurship