Enterprise and Small Business Principles

The characteristics and experiences of female entrepreneurs

Little was known about the female entrepreneur until the mid-1980s. Although many studies had been undertaken investigating small business owners, the bulk of the work concentrated upon the male-owned enterprise and there was an assumption that pat­terns of female behaviour conformed to those established using male samples. As Berg (1997: 259) states, theory building in the area of entrepreneurship has been ‘based on studies of men’. The 1980s heralded the start of a new research interest in women’s business ownership, reflecting both the rise in the number of women starting in busi­ness in many western economies and a growing academic interest in small business and the nature of entrepreneurship. Influenced by the existing small business literature, early studies of female entrepreneurship concentrated mainly upon the motivations for business start-up (Schreier, 1973; Schwartz, 1976; Goffee and Scase, 1985b; Hisrich and Brush, 1986) and, to a lesser extent, the gender-related barriers experienced dur­ing this phase of business ownership (Watkins and Watkins, 1984; Hisrich and Brush, 1986; Carter and Cannon, 1992). In Europe, researchers focused their attention on trying to establish links between motivations for female self-employment and the over­all position of women in the labour market (Goffee and Scase, 1985b; van der Wees and Romijn, 1987; Cromie and Hayes, 1988; Carter and Cannon, 1992). As Berg’s (1997: 259) critique highlighted: ‘The aim of the majority of the studies [was] . . . mainly to make comparisons with male entrepreneurs and to make women entrepreneurs visible’. Overall, these studies presented a prima facie picture of business women with more similarities to than differences from their male counterparts. Like men, the most frequently cited reason for starting in business was the search for independence and control over one’s destiny. The greatest barriers to business formation and success were access to capital and mobilising start-up resources. Few of the early studies developed sophisticated taxonomies, preferring to identify female proprietors as a homogenous group, and there was an implicit acceptance by researchers that, beyond the start-up phase, few significant differences existed between male - and female-owned and man­aged companies.

Many of the early studies concentrated on describing the characteristics of the female entrepreneur and their motivations for self-employment. Schreier’s (1973) pilot study of female business owners showed that the female entrepreneur had much in common with her male counterpart, though tended to operate in industry sectors with traditionally high levels of female employment, mainly services and retailing. Schwartz (1976) also described a predominance of service-based businesses and concluded that female motivations for starting businesses were similar to those of men. Notably, Schwartz (1976) drew the earliest research attention to some specifically female bar­riers to business ownership, including financial discrimination, a lack of training and business knowledge, and generally underestimating the financial and emotional cost of sustaining a business. Hisrich and Brush (1986) continued these broad, exploratory themes by attempting a demographic profile of female entrepreneurs, examining their motivations for starting in business and their barriers to business success. The ‘typical’ female entrepreneur was described as being the ‘first born child of middle-class parents. . . After obtaining a liberal arts degree, she marries, has children, and works as a teacher, administrator or secretary. Her first business venture in a service area begins after she is thirty-five’ (Hisrich and Brush, 1986: 14). Motivations for start-up were described as being the search for job satisfaction, independence and achievement, while the major problems facing women were believed to be the initial under-capitalisation of new businesses and a lack of knowledge and training in business skills. As Hisrich and Brush (1986: 17) described: ‘For a woman entrepreneur who lacks experience in executive management, has had limited financial responsibilities, and proposes a non­proprietary product, the task of persuading a loan officer to lend start-up capital is not an easy one. As a result, a woman must often have her husband cosign a note, seek a co-owner, or use personal assets or savings. Many women entrepreneurs feel strongly that they have been discriminated against in this financial area.’ Highlighting issues of credibility that would recur in several later studies, Hisrich and Brush (1986) also reported that half of their respondents reported difficulties in overcoming social beliefs that women are not as serious as men about business.

Early British studies also focused on describing the motivations and characteristics of women starting in business. Comparing the experiences of 58 female and 43 male business owners, Watkins and Watkins (1984) found substantial differences. Men entering self-employment were more likely to have prior work experience related to their venture; self-employment provided an essentially similar occupation with the added attraction of independence and autonomy. Choice of business sector for women was largely determined by consideration of which areas posed the least obstacles to their success, where technical and financial barriers to business entry were low. As Watkins and Watkins (1986: 230) emphasised in a later article: ‘choice of business can be seen in terms of high motivation to immediate independence tempered by economic rationality, rather than by a conscious desire to operate “female-type” busi­nesses’. Goffee and Scase (1985b) continued this theme with their analysis of the experiences of 54 female proprietors in the UK, developing a typology of female entrepreneurs based on their relative attachment to conventional entrepreneurial ideals in the form of individualism and self-reliance and their willingness to accept conventional gender roles, often subordinate to men. Four types of female entre­preneur emerged:

■ ‘conventional’ entrepreneurs highly committed to both entrepreneurial ideals and conventional gender roles;

■ ‘innovative’ entrepreneurs who held a strong belief in entrepreneurial ideals but low attachment to conventional gender roles;

■ ‘domestic’ entrepreneurs who organise their business life around family and held low attachment to entrepreneurial ideals; and

■ ‘radicals’ who held low attachment to both, often organising their businesses on a political, collectivist basis.

These pioneering studies provided valuable descriptions of a group of entrepreneurs who had, hitherto, been overlooked by the mainstream small business research effort, though critics drew attention to their descriptive nature, the small size and unrepre­sentative nature of the sample (Carter, 1993), the general lack of utility and rigour (Allen and Truman, 1988; Solomon and Fernald, 1988; Rosa and Hamilton, 1994) and the limited extent of their cumulative knowledge (Stevenson, 1983; Hamilton et al., 1992). By the late 1980s it was becoming clear that the research debates surrounding the issue of gender and business ownership were continuing largely because of the difficulties for researchers in providing clear and unequivocal evidence, either through empirical investigation or through more theoretical approaches. While several studies had sug­gested that it was considerably harder for women both to start and run their own enterprises, others had argued that start-up problems tended to be equally great for men, and that many women ‘far from being discriminated against, thought that being a woman gave them a positive advantage over men’ (Birley, 1989: 36).

Though the research field as a whole has progressed to encompass some of the most interesting and controversial research themes, such as the existence and extent of female disadvantage in starting and running a business and the processes and practices of gen­der relations within entrepreneurship, it is also the case that many descriptive studies of female entrepreneurship are still being undertaken. Many replicate the exploratory approach seen in early studies, albeit in very different country contexts.

In an analysis of women business owners in African and Asian countries, Marcucci (2001) described women as being more often pushed by severe economic conditions to create survival income. Given the barriers to women in the formal sector and time con­straints of domestic ties, many women start a business they can run from home using traditional skills. In such circumstances, entrepreneurship is seen less a choice than a ‘desperate attempt by women with few alternatives’ (Mayoux, 1995: 4), in contrast to men who are seen as pulled by the prospects of increased earnings, independence and the opportunity to directly benefit from their own work. Overall, however, the study found the gender differences to be not large, with both sexes ‘pushed’ into micro­enterprise creation. Women in Ethiopia, Tanzania and Zambia more often proactively decided to be entrepreneurs, rather than being driven by necessity arising from poverty. They also explicitly referred to their roles as mothers, wives and daughters and their need to generate income for the family as important motivations for business owner­ship. The study failed to find any evidence to suggest women were less committed to their businesses than male entrepreneurs and strong evidence of women successfully balancing their business and household demands (Marcucci, 2001).

In common with many descriptive studies emanating from more developed economies, studies of women entrepreneurs in Africa and Asia describe female-owned enterprises as being generally younger, smaller and requiring lower start-up resources than those owned by men (Marcucci, 2001; Richardson et al., 2004). Women-owned enterprises are less likely to be registered, more likely to be located from home and to operate in low-remuneration, over-crowded sectors (Marcucci, 2001; Richardson et al., 2004). Richardson et al. (2004) also reported that women started businesses with minimal social, human, financial, physical and natural resources, having low levels or no formal education, often illiterate, and having limited or no experience of employ­ment and limited networks. Women’s enterprises also tend to operate in restricted locally based markets, where access, mobility and networks were easier to negotiate, but with the consequence of excessive competition and under-pricing (Zewde and Associates, 2002). They are also constrained by household and community roles which restrict the time and acceptability of their travelling to conduct business. Richardson et al. (2004) found men were four times more likely to be members of employers’ organisations, chambers of commerce and small enterprise associations, prompting concern within the International Labour Organization that women entrepreneurs were less able to express themselves through associations and decision-making forums. Access to information, in particular market information, may also be problematic for women entrepreneurs. In Bangladesh, for example, women found it difficult to inter­act openly with men and to sell their products at the market (Marcucci, 2001). Overall, these studies portray women-owned enterprises as being often under-capitalised and generating limited or no profits. However, as Downing and Daniels (1992: 2) noted in their study of women entrepreneurs in Southern Africa, ‘when investments are made to increase profitability and decrease the labour intensity of the women’s income gen­erating activities, the activities are frequently taken over by men’.