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Welcome to the WISE newsletter, a program of
The Falcone Center for Entrepreneurship at Syracuse University
 

Tuesday, April 11, 2006

WISE2006: What We Know about Women Entrepreneurs: Patterns, Problems, and Possibilities

Dr. Elizabeth “Betsy” Gatewood (Director, Wake Forest University Office of Entrepreneurship and the Liberal Arts) spoke on the patterns, problems, and possibilities that women entrepreneurs face. Her presentation included video clips.

Women business owners:
  • one in 18 women is a business owner

  • Nearly 11 million businesses or 48% of all firms, when you include firms that are majority women owned

  • Women owned businesses (WOB) grew by 17% during 1997 – 2004.
Men are more likely to think about starting a business. Businesses that are owned by men tend to be bigger than WOB.

Women have difficulty starting businesses because of:
  • Lack of education

  • Lack of capital

  • Not being taken seriously

  • …and more…
Gatewood then outlined research results that looked at WOB vs. men owned business.

Human Capital Differences? - Women do have less employment and industry experience. Do these qualities impact the success of WOB? Some. The most important seems to be that women need more industry experience (in the industry they are choosing) before they create their startups. That industry experience helps women learn the business and the industry. They are able to make key contacts, which can be vitally important. It can also teach women how to run a business.

Social Capital Differences? - When think they have a good network, but tend to have more family in their networks. A High proportion of kin in a social network can decrease the odds of starting a business. Social networks are important to financial resources for growth.

Financial Capital Differences? – Women tend to use less capital to start their businesses. They often use different financial strategies; which means that they try to accumulate less debt. Access to capital is important depending on the size of the business. More capital can equate to more growth.

Prior to starting the business, you need to have enough capital to sustain you during the first year of business.

It is important to forge good relationships with your financial team (e.g., your bankers). This can be critical to the success of the business.

Cognitive Differences? – Women are less confident in their abilities. Women look to have business that allow for flexibility, independence and family-work balance. Women are internally motivated, while men are motivated by market needs. Women need to consider market conditions before starting their businesses.

Women entrepreneurs score lower than men but higher than the general population on risk-taking. However, there is now clear tie between risk-taking and entrepreneurship. Women may not think of risk, but rather think about what they want to do with their lives.

Strategic Choice Differences? – Women businesses are over represented in the service area and retail. These businesses can require less capital and may be seen as more “women” appropriate. Survival rates in these businesses, though, may be lower.

Women put more emphasis on quality than men, which can help the success rates of their businesses.

Women are less likely to delegate authority or allow others to make decisions. They are less likely to consult employees about business decisions.

Women are more likely to set size limits to their businesses. For some, getting bigger means not knowing their clients as well. It can also have to do with how they want to use their time (not wanting to work all the time).

Women business owners make face structural barriers like not having access to large clients or facing discrimination in banking. This may be more of a barrier in some industries than others. The venture capital (VC) industry is primarily male, which can make getting VC finding more difficult for women.

There are cultural barriers that women face, too. Laurie Linn (on video) talked about industries/markets that are more used to dealing with men. She talked about how her business works to use a “male face” when appropriate.

Implications:
  • Women need to work to reduce barriers.

  • Women need to make better – more informed - decisions.

  • Women need to build and use their networks.

  • Women need to mentor the next generation of women business owners.




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1 Comments:

Anonymous women entrepreneurs said...

I know it's more difficult for women entrepreneurs to become successful, but it seems to me like many of these tips are for everyone.

1:06 PM  

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