I've been hearing a lot about a recent Wall St. Journal article, Why Are Women-Owned Firms Smaller Than Men-Owned Ones. Sharon Hadary shares this troubling news:
The phenomenal growth of women-owned businesses has made headlines for three decades—women consistently have been launching new enterprises at twice the rate of men, and their growth rates of employment and revenue have outpaced the economy.
So, it is dismaying to see that, despite all this progress, on average, women-owned business are still small compared with businesses owned by men. And while the gap has narrowed, as of 2008—the latest year for which numbers are available—the average revenues of majority women-owned businesses were still only 27% of the average of majority men-owned businesses.
What's going on here? Could it be that women and men have different measures of success? Different goals when they start a business? Sharon Hadary shares this research in the article:
Research also shows that the differences between women and men entrepreneurs begin with their own reasons for starting a business. Men tend to start businesses to be the "boss," and their aim is for their businesses to grow as big as possible. Women start businesses to be personally challenged and to integrate work and family, and they want to stay at a size where they personally can oversee all aspects of the business.
Sounds like a big overstatement to me, though I think there is a ring of truth to it. Doug Hickok, CEO of Institute for Provocative Leadership shares his thoughts in the blog post Journal Gets It Wrong/Right About Women Business Owners.
Since when is business success measured just by size, and why is this woman [Sharon Hadary] doing that?
To Ms. Hadary, the fact that women-owned business revenues are “still only 27 of the average of majority men-owned businesses” is a problem, even as she goes on to say that women start their businesses for different reasons than men.
Now, I am an executive coach who works with a lot of women business owners, and I can attest to the fact that women are very individual in their desires for their businesses, including revenues and size.
Doug Hickok goes on to point out some valuable insight in the Wall Street Journal article as to what's holding women back and his take on them:
- Women often fail to set high goals for growth. Very true, but women – and men – usually set goals only for revenues, leaving out other aspects of their business and their lives. Strong goals are needed for all of those things, or life doesn’t feel whole and satisfying.
- Women often start their businesses with fewer resources available to them than men. Sometimes true. This factor can drive women out of what they really want to do and into retail or personal services industries instead, for example, where the cost of entry is low, but so is the growth and profit potential.
- Research shows that women tend to think of debt as a “bad thing” to be avoided… one of women’s strengths is relationship-building, yet women seldom focus on building relationships with bankers. True again. Often women don’t reach out to the banker until they’re in trouble and REALLY need the money… the very worst time to start the relationship.
What are your thoughts? Do men and women have different measures of what a successful business looks like?