Women in Business and Entrepreneurship Series Part 2 of 3: The Facts and Trends

In part 1 of the Women in Business and Entrepreneurship Series, I discussed my personal experience as a woman entrepreneur. There are many misconceptions about women entrepreneurs so in part 2 I’m sorting through the facts.

More and more women are embracing entrepreneurship and succeeding. A study by the Center for Women’s Business Research shows that women now own 40 percent of private firms. That’s 10 times more businesses than women owned 30 years ago.

Young women and moms are two of the fastest growing demographics of entrepreneurs and overall, women are starting businesses at twice the rate of men. These numbers, however, do not mean we will see equal proportions of men and women running large firms anytime soon. Only one in five businesses with revenue over the $1 million mark are owned by women. In fact, a Kauffman Foundation study on business and gender shows women are outperformed by men in many areas of business.

The following chart shows that women-owned businesses only take in about half the revenue and profit that male-owned businesses take in:

kauffman study chart

The reason why women do not perform at the same level as men is likely because women start businesses for different reasons than men –not because women aren’t capable of achieving at the same level.

Women are more likely to start small, home-based businesses. Women want more freedom and opportunity than the corporate world provides. Women with children start businesses because they want the flexibility of designing a work schedule that balances business and family. In the constant struggle to find balance, many challenges arise for women.

We’ll look at the challenges facing women entrepreneurs in part 3 of the Women in Business and Entrepreneurship Series.

What do you think about the growing number of women business owners? Why do you think male-owned businesses are outperforming women-owned businesses?

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3 thoughts on “Women in Business and Entrepreneurship Series Part 2 of 3: The Facts and Trends

  1. I just wanted to note that there aren’t a whole lot of credible statistics about women and entrepreneurship, probably because this is a fairly recent phenomenon. I noticed that most of the stats available come from the Center for Women’s Business Research and the Kauffman Foundation. More research is needed to find out about the growing number of women entrepreneurs and the reasons why women start businesses. I look forward to seeing what women entrepreneurs achieve in the future!

  2. Thanks for the comment Chantielle!

    The link to the breakdown didn’t work but I looked through the Overview to read about the changes they made to this years competition. I think the changes are great! For readers who don’t know, the W100 is an annual list of Canada’s top women entrepreneurs. There is also a Profit 100 of Canada’s top entrepreneurs but that list is usually dominated by men. Here is what Profit Magazine says about this year’s W100:

    “In many ways, female entrepreneurs have the odds stacked against them. They are more likely to be turned down for bank financing. They have to balance their work with their family life. And they still face long-outdated stereotypes about the types of companies they run.

    Despite the obstacles, however, female entrepreneurship is thriving in Canada. Since 1997, women in Canada have started companies at about twice the rate of men. Women are driving some of this country’s most dynamic and robust businesses — and you’ll find the leaders of many of those firms on this year’s PROFIT W100, our list of Canada’s Top Women Entrepreneurs.

    Now in its 11th year, the PROFIT W100 has become bigger and more inclusive. Previously based on annual company revenue alone, the 2009 W100 also takes the firm’s growth rate and profitability into account, allowing smaller companies to be recognized for their achievements; indeed, 36% of this year’s honourees are new to the list. We’ve also launched a new ranking of 10 up-and-coming women entrepreneurs whose companies are still in the emerging phase. (See “Ones to Watch”).”

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