More than 9,4 million U.S. firms are now owned by women, employing nearly 8 million people and generating $1.5 trillion profit in sales, according to 2015. data from the National Association of Women Business Owners.
Although there are successful male and female entrepreneurs all over the world, sadly there aren’t as many women as there are men, and I say sadly not because I am a woman but because there are many smart, intelligent and motivated women who are seeking to push through and become successful on their own form of entrepreneurship but somehow aren’t known. Some say there is a question of age, others say funding’s, decision making, others say women and men are the same. Which is the actual truth?
Well, scientists have done research and the differences between men and women do exist, but the basics of it all is the same. Male and female entrepreneurs often start a business in order to have more autonomy and control of their finances and business. As they want their income and personal satisfaction, they believe that starting their own business and being an entrepreneur is the way for them. Contemporary research has also shown us that both female and male entrepreneurs may be similar demographically and psychologically. Meaning they tend to be married, between twenty-five and 40 years old, and they are usually the first born child.
But as always, let’s go back to basics. What is an entrepreneur actually?
To go way back, ”Entrepreneur” comes from a French word which means undertake. So by that logic, entrepreneurs are people who undertake new opportunities and ideas and turn them into successful businesses. They are usually the people who were looked over in their office jobs due to lack of experience and lack of formal education. This way they use to maximize the profits and generate growth, foster innovation and exploit new opportunities more than resources. They are usually very perceptive and focused on what they do, they are risk takers, some more than others. Bottom line: entrepreneurs use a wide range of skills, too, and competencies to accomplish their ideas including creating, adapting, founding and managing.
They usually start by managing a small business since they don’t have organizational constraints like top managers have. Therefore they are highly motivated to succeed in this endeavor and face all the challenges they face. Since they don’t have constraints like top managers in someone else’s business, they take on more risks and choose this way since it best suits their personality.
So let’s go over some of the most popular characteristics all entrepreneurs have which make them extremely successful, sometimes even more than regularly employed people. First and foremost, they have more energy according to the research, they easily overcome obstacles and seek opportunities and new ways of reaching solutions. They are also very self-reliant and have self-control. So now that we actually know what makes an entrepreneur let’s see what makes men and women different?
Since as I said, we live in a world in which more and more women are daring enough to take off on their road to become successful businesswomen and CEOs of their own companies, this article is coming in the best moment. Also, some women are trying to be like men in business, so they are becoming more and more dominant and strict in how they do business.
Now, again, the point isn’t in who is better or who is worse, both men and women have differences that make them unique and that help them succeed. Sometimes, men perform better due to their decision-making style, other time, women gain more and better connections and relationships in the workplace due to which they gain partners who fund their companies success. This isn’t the battle of the sexes. This isn’t also about feminism, it is about what makes men entrepreneurs and women entrepreneurs different.
As you can see below there are some differences which have already been established. Of course, this can change at all times and this does not include 100% of the entrepreneurs. There are always exceptions.
The differences we are talking about are decision-making processes, a point of focus, taking the risk and tolerating the possibility of failure, goals for the business, financing and motivation and style of management.
- Make decisions easier
- Are more focused on economy
- Take financial risks
- Are oriented on tasks
- Undergo in manufacturing and construction
- Have more difficulties in making decisions
- Are focused on quality vs quantity
- Are focused on making a contribution
- Focus on creating better relationships with employees
Let’s go a bit deeper into diagnosing why this is.
So it has become clear that women tend to make decisions harder than men. We all know how complex women can get in even picking what to eat (this isn’t me insulting women, on the contrary), to pick out an outfit, to the business side of their life. It is known that women introduce more factors into their decision making which should according to the definition be cognitive. Somehow women end up influencing emotions and previous experiences in the equation. So is that good or bad?
Well, sometimes it is good and it can have benefit, other times, imagine a wide range of influences that you are unaware of introducing themselves into your decisions. Yeah! There are core values, internal preferences, social skills, social ideas of what women should do or who they should be, women neurobiology, authority and power and their own ideas of how they should act. Now, this isn’t all.
Take the simple example of women and men in a relationship. Now men what they say they usually mean just that, while a woman has to put meaning and diagnose the whole situation top to bottom. That can be exhausting. Especially when you get to a conclusion that has nothing to do with anything, but there are a lot of emotions so it must be it. This part obviously sucks.
But then again, due to more influences from the side, women do better PI work with more profound proof and sounder decisions that usually stick longer. So as I said, there are positive and negative sides to both. But I would have to agree that men make decisions easier and faster and for an entrepreneur, this brings more benefits.
Since women do see the world differently than men, they have a different perspective on business also. Both male and female entrepreneurs, usually start their business in order to have more autonomy and control in their business. They also want the income and the personal satisfaction a business can give them, meaning more than an office job could offer them. Men, on one hand, tend to focus on the economic reasons for business ownership whereas women also seek to make some kind of social contribution. Women also may become entrepreneurs to achieve their own or their spouse’s dream.
Why is that so?
I don’t want to go into genetics but men are built to be providers based on history so their drive for a successful business will be to provide, themselves, their family and to have the personal satisfaction of a successful business by making a lot of capital and lowering the cost of the products he is buying.
Women, of course, have the deeper desire to contribute to the society and give something back as they do provide for everyone else. Especially working moms who focus on their family. Of course, there may be more inherent reasons for women to start up a business.
Their goals are not just financial (women do focus on finances and cost but just not as much as men), they have a deeper meaning. Various research proved and found the most important reason women become entrepreneurs, is that they want to feel self-fulfilled. Women care about their clients not only professionally but privately and feel some sort of societal responsibility.
Now this one is a big difference between men and women. Simply put, women take on less financial risk than men. In one psychological research, it was proven that men actually do take on more risk than women in general. They seek sensations that will make their adrenaline rise as that way they are in touch with their masculinity. What do you think, does this have anything to do with business also?
Another study, (Sapienza et al. 2009), Barnea et al. 2010) has shown the effects of biology and genetics on risk attitudes across genders. Where men were shown as strong, loud, aggressive, confident, arrogant, dumb, stubborn, assertive, proud and dominant; women were shown as caring, emotional, flirty, passive, smart, loving, happy, gossipy, helpful and kind. Now again, I see how this looks, men can be caring and emotional also, but this is related to risk-taking. So women definitely as you can see in the image below, are less likely to take on high risks.
Gender identity, next to biology, helps explain the differences in risk tolerance, confidence, and investment behavior across genders. While entrepreneurs are often seen as people who are willing to take a risk, every research shows that women are a lot less willing to take a financial risk than men. They simply have a different attitude toward risk and are way less risk tolerant. Men simply don’t care so much about the consequences as women do so they are more willing to take on some business and financial risks. It is very known that women and men process information that is provided to them in a different way, where women are detail oriented and pay attention to consequences, men are focused on results. This helps them stay on the track when it comes to investing and finances, they seek profit and are cost-oriented more than women, while they are focused on all the details before making a big decision about financial risk they might not be able to control.
Relationships with employees
Due to our previous numbers and facts about male vs female differences, it is obvious women spend more time creating relationships and business connections in a workplace. They also invest more time and energy into creating a positive environment and an open type communication with their employees, whilst men are more focused on results and how dominant they can be.
Women have the idea that by encouraging friendships at work doesn’t mean organizations need to install game rooms and hold weekly happy hours to promote a fun workplace. The goal of encouraging people to get to know one another is to build stronger connections. The more connected employees feel to their teams and co-workers, the better their performance will be and the company will gain more success.
To begin with, there are some differences between men and women regarding the financing of their businesses. Women usually start up their business with less capital than men and their businesses tend to be smaller which can put women at a significant disadvantage when starting up their business.
Why? Simply because this lack of start-up capital can affect the survival rates of female-owned businesses and their ability to grow. On the other hand, men are more likely to end up in debt while women have either less debt or no debt to pay. Most women start up their businesses with personal assets and have minimal if any external funding. They tend to start up with half the capital that men have because they also have less access to informal financial networks that can provide funding for their businesses. Therefore, expanding a business may be more of a challenge to women because banks have more strict requirements for them when it comes to collateral for loans (why?).
So now that you see some of the differences between men and women, you can make your own decision to become a successful woman entrepreneur or be a man who has a little bit more understanding and is more supportive.