In fact, according to the Center for Women’s Business Research, in 2004 there were an estimated 10.6 million businesses that were privately held and that had woman ownership of 50 percent or more, accounting for 47.7 percent of all privately held firms.
The largest share of these firms is in the service sector at 45 percent, followed by retail trade (16.4 percent), finance, insurance or real estate (8.9 percent), construction (6 percent) and other unclassified industries (12.5 percent).
The growth in the number of privately held, 50 percent or more women-owned firms is nearly twice the growth rate of all privately held firms at 17.4 percent, versus 9 percent, and almost three times the growth in the number of employer firms (with paid employees) at nearly 30 percent versus 9.1 percent.
To understand the growing trend of female business owners, it’s important to appreciate the inherent gender differences in the work setting and how they affect behavior, perception and decision-making. In the game of business, competition is a given. Unfortunately, women do not play that game the same way that their male counterparts do.
Men see competition as challenging and invigorating, with a clear sense of a winner and a loser. In confrontational situations, it’s easier for men to deal with discord and move on when the conflict is over.
Women often care too much about being liked and maintaining harmony and will go to extremes to avoid hurting someone’s feelings. For women, it’s difficult to conceptualize how men can play hardball in the boardroom by day and watch Monday night football with these same beaten buddies by night.
Most corporate cultures nurture competitive rather than collaborative environments. Women find themselves constantly proving themselves and ultimately trying to change the cultures in which they work. Consequently, women are leaving corporations, starting their own companies and creating cultures in which they can be successful.
Work-life balance and other challenges
One of the biggest challenges facing women today is the difficulty of achieving a manageable work-life balance. Not only are women often the primary caregivers for their children, but more often than not, they are caring for their aging parents as well.
The ability to control available time and to gain flexibility with demanding schedules is one of the primary reasons for the surge of female business owners. However, work-life balance is only one of many challenges facing women-owned businesses and small businesses in general.
Operational issues such as cash management, finding adequate financing for capitalization and improving marketing effectiveness are key challenges for small business owners. Client retention, client service and business development are critical for continuity and growth.
Women must learn to utilize their creativity and juggle capabilities to successfully incorporate these demands in their busy lives. They need to recognize that the traditional methods of networking and developing business may not work for their schedules. Golf outings, dinners and sporting events may need to be replaced by breakfast and lunch meetings.
Female business owners also need to continually educate themselves and learn from mentors. According to the Center for Women’s Business Research, “It is critically important that women have access to mentors as well as to knowledge and information about entrepreneurship to be successful in growing their businesses.” Men prefer to be mentored by other men, and women prefer to learn from each other as well.
There are numerous resources and organizations available to women to help in their quest as business owners, such as the National Foundation of Women Business Owners, National Women Business Owners Corp., National Association of Women Business Owners and the Women’s Business Enterprise National Council.
Understanding the strengths that women bring to business and capitalizing on them will undoubtedly lead to continued success and growth and help female entrepreneurs get to the next level.
Leslie Balmforth, CPA, is the chief operating officer of Tauber & Balser PC and a member of the Family Business Services Team. Reach her at (404) 814-4985 or email@example.com.