I was reading the latest issue of Inc. magazine and noticed with interest an article about “Cool Campus Start-ups”. While I’m primarily interested in older entrepreneurs, I flipped to the article to see what the kids were up to. Looking at the photos of these young entrepreneurs I was startled to realize only 3 of them were women.
But I thought women were starting businesses in record numbers.
I mentioned my observation to my sister. She went into a rant about how the school system is failing our kids by not instilling an entrepreneurial spirit. But is that really it?
Sure, back when I was a student I was taught to be a good girl and follow the rules – lessons I’m still fighting with today.
But while I agree that too much of the school system is designed to turn out well-behaved and obedient worker bees, I don’t think that’s the entire picture. After all, that wouldn’t explain the gender discrepancy.
I decided to dig deeper.
I found a 2004 report from CIBC looking at women in business in Canada. This report stated that the number of women-owned businesses is growing 60 percent faster than men-owned businesses. The fastest growing group of women entrepreneurs is women over 55.
Hmmm…
However, this report did report something else disturbing. It stated that women were earning less than men. Significantly less.
As of 2004, one-third of all women-run enterprises generated less than $50,000 in annual revenue, which is double the rate seen among firms run by men. At the same time, more than 20% of firms owned by men generated annual revenue of more than $500,000 – almost double the rate seen among women.
So not only are young women less likely to start businesses, women are earning less than men. In the 21st Century!?! But this report is five years old. Can I find newer numbers?
According to the Center for Women’s Business Research, women-owned firms in the U.S. account for 40 percent of all privately held firms. However, only 20 percent of companies earning over $1 million dollars are owned by women. Comparing apples to apples: “3% of all women-owned firms have revenues of $1 million or more compared with 6% of men-owned firms”.
The Small Business Adminstration published a report Human Capital and Women’s Business Ownership in April 2008. It agreed that women entrepreneurs are growing in numbers.
There were some other interesting bits of information as well. This particular study showed that women entrepreneurs were most likely to fall into the highest or lowest income categories – the middle is under represented as compared to their male counterparts. It also confirmed that women entrepreneurs also tend to be older – women aged 40 to 59 are by far the largest group of women entrepreneurs.
So what can we conclude from this cursory glance at the data?
Women are starting businesses when they’re older, rather than straight out of school. And they’re mostly earning less than men.
Why?
From personal experience and observation, most women are still primarily responsible for child care in their families. If you’re planning to have kids, it’s awfully hard to imagine running a business and being first on call for dealing with sick children, doctors’ appointments and after school activities. I really think many women are waiting until their kids are older to start businesses.
That explains why women in their 30s are less likely than women in their 40s and 50s to start businesses. But what about women in their 20s? After all, few women are having kids straight out of school anymore.
[bctt tweet=”Why do women entrepreneurs tend to earn less than male ones?”]
So why are young women less likely than young men to start businesses? I’m beginning to wonder if we still selling young women a bill of goods. Are we (as a society) telling them not to take risks, not to stray out of traditionally women’s fields, not to be entrepreneurs?
I think the numbers don’t lie. Women aren’t starting businesses until they’ve had a few more miles under their belts and have learned they really can hold their own with the men. And perhaps have learned that they need to depend on themselves, not others for their financial security.
And why do women entrepreneurs tend to earn less than male ones? Perhaps it does go back to school, where we’re taught to be “good” girls. After all, good girls play by the rules and don’t earn more than men. Are we fighting our socialization that tells us it’s unfeminine to have a profit motive, to make good money? I think perhaps so.
Am I wrong?
Andrea J. Stenberg
