Why Women Are Better Entrepreneurs
Why Women Are Better Entrepreneurs
Solving the Enigma of the Better Entrepreneur
Female-owned businesses are on the rise, but looking at the statistics, women are still outnumbered by men by a good mile. From the annual Forbes’ list to Fortune 500 entrepreneurs, almost every list out there is dominated by men. It actually made me think, are men really better entrepreneurs?
So I dug deep, researched my heart out, and the results I got were pretty surprising. Read on to know what I found out!
Who’s more likely to succeed?
According to this study, when women fail to reach their funding goal, they start to believe that they’re not cut out for entrepreneurship and end up quitting. On the other hand, their male counterparts almost always try again after a failed attempt. This could be one of the reasons why females only make up 28.8% of business owners in the U.S. as reported by the Institute of Women’s Policy Research.
Research has also shown that women entrepreneurs face more gender bias toward their competence. In this study, businesses led by women were deemed less investment-worthy and less likely to succeed compared to ones owned by men.
However, female-owned companies out-survive those owned by men in many industries as well as in large cities. For instance, in this survey, it was revealed that female business owners have a much lower failure rate compared to male-owned businesses.
Where Women Have the Better Edge
Seeing that women have higher chances of succeeding, what particular quality actually makes them a better entrepreneur? One reason is that men and women typically see risks differently and in the business world, knowing how to manage risks is the name of the game.
In this report, 62% of male entrepreneurs claimed that their businesses were doing well compared to just 42% of women. When in reality, the women entrepreneurs actually ended up having a higher profit rate before accounting taxes. In that same report, 80% of women state that they see things that others would classify as risk to be opportunities while only 67% of men thought the same.
The end result is that women were much more adept at assessing the health of a business and calculating the risks when compared to men.
Why Female Entrepreneur Growth is Important
Having more women on board the global business arena provides benefits that goes beyond just improving equality. Below are some of the reasons why women are better off joining the entrepreneurial pool today.
Better Financial Performance
In Credit Suisse Research Institute’s 2012 report covering 2,360 global firms, they found out that those who had women executives in their board lineup surpassed the financial performance of executive boards that were all-male. This means that teams that are gender diverse had a much more viable return on equity as well as mean growth.
Better quality in the workplace is also correlated with higher GDP per capita. Although correlation does not necessarily equate causality, it goes in line with the theory that empowering women makes for a better use of human capital. Lowering gender inequality can only lead to heightened economic growth.
Improved female participation in male-dominated industries could potentially increase productivity by anywhere from 3% to 25%. By excluding highly qualified women in such industries, the use of human capital is reduced and the pool of talent available is restricted.
Improved Overall Performance
Businesses that employed more women in their leadership ranks had a more superior all-around performance than companies with little to no female leaders in high positions. Since most women excel in a vast range of competencies and are often multitaskers, it follows that they’ll be able to handle different aspects of a business superbly as well.
In the field of politics, having a female leader resulted in a significant economic boost for the nation. This can be due to the fact that female leaders are more inclined to use a transformational style of leadership that exhibits traits such as diplomacy and inclusiveness.
What Everyone Stands to Gain
In general, there is much value to be gained once we utilize women’s talent to its fullest potential. Having more women in the business field and leadership positions can only lead to more success for everyone and an enhanced working environment.
As Jim Yong Kim has stated, “Gender equality doesn’t require trade-offs; it only has benefits. And the benefits accrue to everyone, not just women and girls. Societies benefit and, as even men are beginning to understand, economies benefit, too.”
Jeanne enjoys writing informational content that teaches skills she’s come to learn over the years. She translates these lessons into self-employed and entrepreneurial advice for anyone looking to overcome their mental roadblocks and psychological barriers in her blog, The Self Hirer.
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