Fast-growth women and men entrepreneurs take different paths toward business success
Fast-growth women and men entrepreneurs take different paths toward business success
Keywords: Entrepreneurialism, Gender, USA
Washington, DC, USA – Women business owners are less likely than their men counterparts to have a mentor before opening a business, but more likely to consult outside sources on business management and growth issues, according to a survey from the National Foundation for Women Business Owners (NFWBO). The study, "Entrepreneurial vision in action: exploring growth among women- and men-owned firms", was sponsored by a unique collaboration of non-profit foundations, the Edward Lowe Foundation and the Kauffman Center for Entrepreneurial Leadership, in conjunction with FleetBoston Financial.
When owners of fast-growth firms were starting or acquiring their firms, less than half of the women had a mentor or role model. "Women who own fast-growing businesses are also less likely than men who own fast-growing firms to indicate that someone close to them was an entrepreneur when they were growing up", according to Mark Lange, executive director of the Edward Lowe Foundation. "Only 43 per cent of fast-growth women owners had an entrepreneurial role model, compared to 59 per cent of fast-growth men owners."
However, women may compensate for the lack of mentors by consulting more with outside sources while they grow their businesses. When asked who they consult with on business issues, women owners of fast-growing businesses are the most likely to say they consult with accountants, family members and fellow business owners. "Gaining new perspectives from outside sources on business management and growth issues is an important ingredient in expanding a business",noted Lange. He continued: "60 per cent of the fast-growth women owners consult with accountants, compared to 44 per cent of men owners of fast-growing firms. Furthermore, women owners of fast-growing firms are the most likely to discuss business issues with their family and fellow business owners." While 49 per cent of these fast-growth women discuss business management with their family, only 36 per cent of fast-growth men do, and 31 per cent of fast-growth women confer with fellow business owners, compared to 26 per cent of fast-growth men.
The survey also shows that women entrepreneurs who have achieved fast growth for their firms have taken a more varied path to business ownership than did their men counterparts. "The diversity of characteristics and life experiences that fast-growth women owners bring to their firms illustrates that there is no single or best path to owning a fast-growing firm", said Kate Hodel, of the Kauffman Center for Entrepreneurial Leadership. "Although women owners of fast-growing firms are less likely than their men counterparts to have had managerial or executive experience, they are more likely to have a professional background. Of women who own fast-growth firms 23 per cent had managerial experience, compared to 50 per cent of men owners of fast-growth businesses. In contrast, 31 per cent of the fast-growth women business owners have professional experience compared to 16 per cent for men."
Further, the fast-growth women owners surveyed, also do not bring as much past experience with business ownership as their men counterparts do, 30 per cent of women owners who have achieved fast growth for their firms had past experience owning other businesses, compared to 45 per cent of the men owners who have achieved fast growth.
"Despite these differences, women increasingly are leading fast-growing businesses", noted Nina McLemore, NFWBO chair and president of Regent Capital. "Past NFWBO research has documented trends showing that the women who are starting businesses today are more likely than inthe past to have managerial and professional experience. In addition, the emergence of strong entrepreneurial programs, such as those offeredby the Edward Lowe Foundation and the Kauffman Foundation, are a major influence in helping women who wish to lead growing, profitable businesses."
Hodel also noted that most business owners do not have an exit strategy. Less than one-third of growth-oriented women business owners (26 per cent), other women business owners (27 per cent), and men business owners not oriented toward growth (30 per cent) say that they have an exit strategy. Although growth-oriented men business owners are the most likely to say that they have an exit strategy, only 37 per cent do so.
"The overwhelming majority of business owners are fully engaged in the operation of their businesses, regardless of their outlook toward growth, and often ignore the importance of an exit strategy as part of their business growth plan", said Lange. "This survey reinforces the importance of Edward Lowe's strategies for providing business owners, both women and men, with the outside information and perspectives to focus on key issues of growth and business success."
The survey, "Entrepreneurialvision in action: exploring growth among women- and men-owned firms" was conducted in mid-2000 among 1,194 business owners – 602 women and 592 men.
The report, "Entrepreneurial vision in action: exploring growth among women- and men-owned firms", is available for $90. Contact the National Foundation for Women Business Owners, 1411 K Street, NW, Suite 1350, Washington,DC 2OO05-3407, USA. Tel: (202) 638-3060; Fax (202) 638-3064; E-mail info@nfwbo.org; Web site http://www.nfwbo.org (Discounts are available for NFWBO corporate partners and NAWBO members.)
