Female entrepreneur

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Female entrepreneurs, also known as women entrepreneurs, encompass approximately 1/3 of all entrepreneurs worldwide.[1]

Oprah Winfrey at 2011 TCA

History[edit]

Before the 20th century, women were operating businesses as a way of supplementing income. In many cases, they were trying to avoid poverty or making up for the loss of a spouse. The ventures that these women undertook were not known as entrepreneurial at the time; many of them usually had to bow to their domestic responsibilities. The term entrepreneur is used to describe individuals who have ideas for products and/or services that they turn into a working business. In earlier times, this term was reserved for men.[2]

Women became more involved in the business world only when the idea of women in business became palatable to the general public. However, this does not mean that there were no female entrepreneurs until that time. In the 17th century, Dutch Colonists who came to what is now known as New York City, operated under a matriarchal society. In this society, many women inherited money and lands and, through this inheritance, became business owners. One of the most successful women from this time was Margaret Hardenbrook Philipse, who was a merchant, ship owner, and also involved in the trading of goods.[3]

During the mid 18th century, it was popular for women to own certain businesses like brothels, alehouses, taverns, and retail shops, among others. Most of these businesses were not perceived with good reputations, because it was considered shameful for women to be in these positions. Society at the time frowned upon women involved in such businesses because they took from the women's supposed gentle and frail nature. During the 18th and 19th centuries, more women came out from under the oppression of society’s limits and began to emerge into the public eye. Despite the frowns of society, women like Rebecca Lukens flourished. In 1825, Lukens took her family business of ironworks and turned it into a profit-generating steel business.

In the 1900s, due to a more progressive way of thinking and the rise of feminism, female entrepreneurs began to be a widely accepted term and although these women entrepreneurs serviced mostly women consumers, they were making great strides. Women gained the right to vote in 1920 and two years later, Clara and Lillian Westropp started the institution of Women’s Savings & Loan as a way of teaching women how to be smart with their money. As each change in society happened, female entrepreneurs were there, becoming more influential. With the boom of the textile industry and the development of the railroad and telegraph system, women like Madame C. J. Walker took advantage of the time and was able to market her hair care products in a successful way, becoming the 1st African American female millionaire. Carrie Crawford Smith was the owner of an employment agency opened in 1918 and, like Madame C. J. Walker, she sought to provide help to many women by giving them opportunities to work.

During the Great Depression, some of the opportunities afforded to women took a backseat and society seemed to reverse its views, reverting to more traditional roles. This seemed to affect women working in business. However, it served as a push to those involved in the entrepreneurial world. More women began starting their own businesses, looking to survive during this time of hardship. In 1938, Hattie Moseley Austin, who had begun to sell chicken and biscuits after her husband died, opened Hattie’s Chicken Shack in Saratoga Springs, NY.

During WWII, many women entered the workforce, filling jobs that men had left behind. Women of their own accord took these jobs as a patriotic duty along with others who started businesses of their own. Some of these women included Pauline Trigere, who came to New York from Paris in 1937 and started a tailoring business that later turned into a high-end fashion house. Estee Lauder at the time was also working on the idea for her beauty products and officially launched in 1946, a year after the war ended. When the war ended, many women still had to maintain their place in the business world because most of the men who returned were injured.

The Federation of Business and Professional Women’s Clubs were a source of encouragement to women entrepreneurs. They often would hold workshops with already established entrepreneurs, such as Elizabeth Arden, giving advice. When the 1950s came, women found themselves surrounded by messages everywhere, stating what their role should be. Domesticity was the overall concern and theme that was highly stressed during this time, and women were juggling, trying to combine the home and their career.

Home-based businesses helped to solve a good part of the problem for those women who worried about being mothers. Lillian Vernon, while pregnant with her first child, started her own business dealing with catalogs by investing money from wedding gifts and started filling orders right at her kitchen table. Mary Crowley founded Home Decorating and Interiors as a way of helping women to work from home by throwing parties to sell the products right in the comfort of their own home. In an effort to avoid criticism and lose business from those who did not support women in business, Bette Nesmith, who developed the product “Mistake Out," a liquid that painted over mistakes in typing, would sign her orders B. Smith so no one would know she was a female.

From the 1960s to the late '70s, another change came about when divorce rates rose and many women were forced back into the role of being a sole provider. This of course pushed them back into the working world, where they were not well received. When the recession hit, many of these women were the first to be without work. Once again, the entrepreneurial endeavors of women came to the rescue as an effort of asserting themselves and aiding other women in being a part of the workforce. Mary Kay Ash and Ruth Fertel of Ruth’s Chris Steak House were part of that movement.

The 1980s and '90s were a time of reaping the benefits from the hard work of women who worked tirelessly for their rightful place in the workforce as employees and entrepreneurs. Martha Stewart and Vera Bradley were among the 25 percent women who owned businesses. The public was also becoming more receptive and encouraging to these women entrepreneurs, acknowledging the valuable contribution they were making to the economy. The National Association of Women Business Owners helped to push Congress to pass The Women’s Business Ownership Act in 1988, which would end discrimination in lending and also get rid of laws that required married women to acquire their husband’s signature for all loans. In addition, the Act also gave women-owned businesses a chance to compete for government contracts.

Another monumental moment for women in business was the appointment of Susan Engeleiter as head of the Small Business Administration in 1989. In the late '80s and throughout the '90s, there was more of a focus on networking opportunities in the world of female entrepreneurs. There were many opportunities that came about to help those who were interested in starting up their own businesses. Support groups, organizations for educating the female entrepreneur, and other opportunities like seminars and help with financing came from many different sources, such as the Women’s Business Development Center and Count Me In. Despite all these advances, the female entrepreneurs still fell behind when compared to their male counterparts.

As the '90s came in, the availability of computers and the increasing popularity of the internet gave a much needed boost to women in business. This technology allowed them to be more prevalent in the business world and showcase their skills to their competitors. Even still, with the added popularity of women in business, the availability of technology, the support from different organizations, female entrepreneurs today are still fighting. The economic downturn of 2008 did not serve to help them in their quest. With the continual attention given to female entrepreneurs and the educational programs afforded to women who seek to start out with their own business ventures, there is much information and help available. Since 2000, there has been an increase in small and big ventures by women, including one of their biggest obstacles—financing. [4]

Demographics[edit]

Studies have shown that successful women entrepreneurs start their businesses as a second or third profession. Because of their previous careers, women entrepreneurs enter the business world later on in life, around 40–60 years old. As women are now overtaking their male peers when it comes to education,[5] having higher education degrees is one of the significant characteristics that many successful female entrepreneurs have in common. The number of self-employed women has steadily increased over the past 3 decades, putting them at an approximate 33 percent increase. Many women-owned businesses continue to be home-based operations. These types of businesses usually have limited revenue with about 80 percent of them making less than $50,000 in 2002. This group made up for about 6 percent of total women-owned businesses. Children of these female entrepreneurs are expected to boost that number as they contribute to the growing amount of female entrepreneurs. Most women-owned businesses are in wholesale, retail trade, and manufacturing. Female entrepreneurs have also made a name for themselves in professional, scientific and technical services, as well as in healthcare and social assistance. In 1972, women-owned businesses accounted for 4.6 percent of all U. S. businesses—that was about 1.5 million self-employed women. That number increased to 2.1 million in 1979 and 3.5 million in 1984. In 1997, there were about 5.4 million women-owned businesses and in 2007, that number increased to 7.8 million. The participation of females in entrepreneurial activities does of course vary in different amounts around the world. For example, in Pakistan, women entrepreneurs account for only 1% of this gender’s population, while in Zambia 40% of women are engaged in this activity. The highest number of females involved in entrepreneurial activities can be seen in Sub-Saharan Africa, with 27% of the female population. Latin America/Caribbean economies show comparatively high percentages as well (15%). The lower numbers are seen in the MENA/Mid-Asia region with entrepreneurial activities registering at 4%. Developed Europe and Asia, as well as Israel, also show low rates of 5%.

International implications[edit]

A recent international study found that women from low to middle income countries (such as Russia and the Philippines) are more likely to enter early stage entrepreneurship when compared to those of higher income countries (such as Belgium, Sweden and Australia). A significant factor that may play a role in this disparity can be attributed to the fact that women from low income countries often seek an additional means of income to support themselves and their families. Overall, 40 to 50 percent of all small businesses are owned by women in developing countries.[6] Alternatively, this may also be due to the fact that, in western business practices, it is not seen as beneficial to exhibit feminine traits. While eastern businesses tend to follow methods based around mutual respect and understanding, western business' expectations are for business leaders to be more ruthless, headstrong, and less sensitive or respectful.

"In the grab for power women use whatever means available to them, whereas a man would take a club to his opponents head a woman is more likely use other less forceful and more subversive measures. Let's just own it we have different weapons in our arsenal." [7] Female entrepreneurs make up for approximately 1/3 of all entrepreneurs globally. According to one study, in 2012 there was an approximate 126 million women that were either starting or already running new businesses in various economies all over the world. As far as those who were already established, there was an approximate 98 million. Not only are these women running or starting their own businesses but they are also employing others, so that they are participating in the growth of their respective economies.

A study in India entitled "Barriers of Women Entrepreneurs: A Study in Bangalore Urban District", has concluded that despite all these constraints, successful women entrepreneurs do exist. Women entrepreneurs have evidently more to ‘acquire’ than their male counterparts. But, the socio-cultural environment in which women are born and raised hinders them. Social customs, caste restrictions, culture restraints and norms leave women lagging behind men.[8]

Present challenges[edit]

Even though female entrepreneurship and the formation of women business networks is steadily rising, there are a number of challenges and obstacles that female entrepreneurs face. One major challenge that many women entrepreneurs face is the traditional gender-roles society may still have on women. Entrepreneurship is still considered as a male-dominated field, and it may be difficult to surpass these conventional views. Other than dealing with the dominant stereotype, women entrepreneurs are facing several obstacles related to their businesses.

Obstacles specific to starting new firms[edit]

External finance and sex discrimination.[edit]

In general, women have lower personal financial assets than men. This means that for a given opportunity and equally capable individual, women must secure additional resources compared to men in order to exploit the opportunity because they control less capital. A question that has developed into its own sub-field in women’s entrepreneurship literature, is do women have a harder time getting finance than men for the same business opportunity?[9][10][11]

A specific solution for solving women’s difficulties for obtaining financing has been microfinancing. Microfinance is a financial institution that has become exceptionally popular, especially in developing economies.

Obstacles specific to managing a small firm[edit]

Studies on women entrepreneurs show that women have to cope with stereotypic attitudes towards them on a daily basis. Business relations—from customers to suppliers and banks—constantly remind the entrepreneur that she is different, sometimes in a positive way such as by praising her for being a successful entrepreneur even though she is a woman. Employees tend to mix the perceptions of the manager with their images of female role models, leading to mixed expectations on the woman manager to be a manager as well as a “mother”. The workload associated with being a small business manager is also not easily combined with taking care of children and a family. However, even if the revenues are somewhat smaller, women entrepreneurs feel more in control and happier with their situation than if they worked as an employee.[12] Women entrepreneurship has been recognised as an important source of economic growth. Women entrepreneurs create new jobs for themselves and others and also provide society with different solutions to management, organisation and business problems. However, they still represent a minority of all entrepreneurs. Women entrepreneurs often face gender-based barriers to starting and growing their businesses, like discriminatory property; matrimonial and inheritance laws and/or cultural practices; lack of access to formal finance mechanisms; limited mobility and access to information and networks, etc.

Women’s entrepreneurship can make a particularly strong contribution to the economic well-being of the family and communities, poverty reduction and women’s empowerment, thus contributing to the Millennium Development Goals (MDGs). Thus, governments across the world, as well as various developmental organizations, are actively undertaking the promotion of women entrepreneurs through various schemes, incentives and promotional measures.

Women entrepreneurs in the four southern states and Maharashtra account for over 50% of all women-led small-scale industrial units in India[citation needed].

Obstacles specific to growing firms[edit]

A specific problem of women entrepreneurs seems to be their inability to achieve growth, especially sales growth.[13] Another previously addressed issue is finance and, as stated previously, the entrepreneurial process is somewhat dependent on initial conditions. In other words, as women often have a difficult time to assemble external resources, they start as less ambitious firms that can be financed to a greater degree by their own available resources. This also has consequences for the future growth of the firm. Basically, firms with more resources at start-up have a higher probability to grow than firms with fewer resources. By resources is meant here societal position, human resources and financial resources. This initial endowment in the firm is therefore of great importance for firm survival and especially for firm growth.[14][15][16][17] Despite the fact that many women entrepreneurs face growth barriers, they are still able to achieve substantial firm growth. There are examples of these both in a number of developing economies (Ethiopia, Tanzania and Zambia) surveyed by the ILO, as well as in more developed economies such as the United States.

Encouragement of women entrepreneurs[edit]

In 1993, "Take Our Daughters To Work Day" was popularized to support career exploration for girls, later expanded to Take Our Daughters and Sons to Work Day.

“Investing in women is not only the right thing to do but also the smart thing to do.” (Hillary Clinton from unfoundation.org) Research shows that there are many support groups for women in business, female entrepreneurs and women just looking for business advice. Women in different areas are wanting to show the support that in some cases, they never had. One such group is can be found on Facebook called Mompreneurs, https://www.facebook.com/groups/motivatedmompreneurs/ they offer encouragement, advise and support to moms who seek to provide for their families through their own visions for business. HerCorner, http://www.hercorner.org is a group located in Washington, D.C. This groups seeks to bring women business owners together to collaborate with each other for the betterment of their businesses. There are government backed programs available to female entrepreneurs and information can be found on their website at http://www.sba.gov/about-offices-content/1/2895 and their Facebook group https://www.facebook.com/SBAgov?ref=br_tf. Female-only taxi companies in India, the UAE and Brazil support working women.[18] One example of successful women entrepreneurs in rural villages of Bangladesh is the Infolady Social Entrepreneurship Programme (ISEP).

Reasons for becoming a female entrepreneur[edit]

Many studies show that women start their own businesses for a variety of reasons. These reasons include; having an idea for a business plan, a passion for solving a specifically related career problem, wanting to be more in control of their careers, maintaining a more balanced life, having a flexible work schedule and taking a personal vision and turning it into a lucrative business. Along with the intense desire to see their vision carried out, these women also have a great ability to multi-task and are not fearful of the risks involved in being self-employed. Women are still facing many issues in the workforce and being their own boss certainly is more appealing to some of the everyday issues they face outside of entrepreneurship. Gender roles are still very much a part of their lives but for some female entrepreneurs, they feel more in control, when working for themselves.

See also[edit]

References[edit]

  1. ^ "Some Facts About Women Entrepreneurs". Go4Funding. Retrieved 30 May 2012. 
  2. ^ "From Ideas to Independence A Century of Entrepreneurial Women." Entrepreneurs.nwhm.org. N.p., n.d. Web.
  3. ^ Bostwick, Heleigh. "History's Top Women Entrepreneurs." LegalZoom: Online Legal Document Services: LLC, Wills, Incorporation, Divorce & More. N.p., March 2009. Web. 18 Apr. 2014.
  4. ^ "From Ideas to Independence: A Century of Entrepreneurial Women | National Womens' History Museum." From Ideas to Independence: A Century of Entrepreneurial Women | National Womens' History Museum. N.p., n.d. Web. 18 Apr. 2014.
  5. ^ Schumpeter (27 August 2011). "The daughter also rises women are storming emerging-world boardrooms". The Economist. 
  6. ^ Lemmon, G. (2012). Women entrepreneurs, example not exception [Video]. Available from http://www.ted.com/talks/lang/en/gayle_tzemach_lemmon_women_entrepreneurs_example_not_exception.html
  7. ^ Jacobs, S (2012). Can we please change the Conversation. http://www.shebusiness.com/2012/09/can-we-please-change-the-conversation/
  8. ^ Gayathridevi, C.L., 'Barriers of Women Entrepreneurs: A Study in Bangalore Urban District', International Journal of Trends in Economics Management & Technology (IJTEMT), ISSN: 2321-5518, Vol. 3 Issue 2, April 2014, pp:24-30.
  9. ^ Brush, C. G. 1992. Research on women business owners: Past trends, a new perspective and future directions. Entrepreneurship Theory & Practice, 16(4): 5-30.
  10. ^ Carter, S., Anderson, S., & Shaw, E. 2001. Women's Business Ownership: A Review of the Academic, Popular and Internet Literature. London, UK: Small Business Service.
  11. ^ Carter, S., & Rosa, P. 1998. The financing of male- and female-owned businesses. Entrepreneurship and Regional Development, 10: 225-241.
  12. ^ Loscocco, K. A., & Leicht, K. T. 1993. Gender, work-family linkages, and economic success among small- business owners. Journal of Marriage and the Family, 55: 875-887.
  13. ^ Du Rietz, A., & Henrekson, M. 2000. Testing the female underperformance hypothesis. Small Business Economics, 14(1): 1-10.
  14. ^ Brüderl, J., & Schussler, R. 1990. Organizational Mortality: The liabilities of newness and adolescence. Administrative Science Quarterly, 35(3): 530-548.
  15. ^ Cooper, A. C., Woo, C., & Dunkelberg, W. 1989. Entrepreneurship and the initial size of the firms. Journal of Business Venturing, 4(5): 317-332.
  16. ^ Cooper, C. A., & Dunkelberg, W. C. 1987. Entrepreneurial research: Old questions, new answers and methodological issues. American Journal of Small Business, 11(3): 11-23.
  17. ^ Fichman, M., & Levinthal, D. A. 1991. Honeymoons and the liability of adolescence: A new perspective on duration dependence in social and organizational relationships. Academy of Management Review, 18(2): 442-468.
  18. ^ Schumpeter. (2011, 08 27). The daughter also rises women are storming emerging-world boardrooms. Retrieved from http://www.economist.com/node/21526872