Why More Women Are Becoming Entrepreneurs

Abstract

WHY MORE WOMEN ARE BECOMING ENTREPRENEURS From 1972 to 1982 the number of self-employed women in the United States increased by 69 percent. This represented a rate of increase five times greater than that for men in the same period. From 1977 to 1980 the proportion of non-farm, sole proprietorships operated by women increased from 22.6 percent to 26.1 percent. In addition, the number of non-farm, sole proprietorships operated by couples soared from 284,405 in 1981 to 440,000 in 1982. To find why women are turning to entrepreneurship in increasing numbers, two surveys were conducted: one of women entrepreneurs in the state of Georgia, and another of both male and female entrepreneurs in the Atlanta area for purposes of comparison. OBJECTIVES OF THE SURVEYS Previous studies, including one published in this journal by Robert D. Hisrich and Candida Brush in 1984, have reported that the women entrepreneur is not an average woman and that she has problems not encountered by her male peers. The Hisrich and Brush study covered 18 states, and like most previous studies of this type, focused on the characteristics of the women and the nature of their businesses and problems. While the objectives of the two surveys described in the present article were similar to those of the Hisrich/Brush study, some additional objectives were added and others were omitted. The information sought in the present study included the reasons why women were going into business for themselves; the type (or types) of women who were doing so; and how successful they had been. The first survey in the study was designed for women only; the second for both male and female respondents. A secondary objective was to try to determine how representative the results of this survey, conducted in a limited geographic area, may be of entrepreneurs in general. This determination was considered important because in-depth studies frequently require personal interviews, which are often feasible only when the study is limited to a relatively smaller area. The results of this study are thus compared with those of the large study conducted by Hisrich and Brush. Informed observers have posited a number of hypotheses as to why there has been such a marked growth in the number of women-owned businesses. Included among these is the belief that, of the comparatively large number of women now occupying the lower rungs of the corporate ladder, many have found it impossible to climb to a level where they can run the show. Consequently, they have opted out to found their own businesses. Another explanation is that many women have come to the conclusion that compared to working for others, running one's own business is more compatible with woman's demanding role in child rearing, because of the greater flexibility afforded by setting one's own working hours. Testing these and other popular hypotheses was a final objective of this study. METHOD To accomplish these objectives, 291 questionnaires were sent to women-owned businesses in the state of Georgia. Fifty-three percent (154) of these were returned. The greater Atlanta area accounted for the majority of the respondents. Respondents were asked about their personal and business characteristics; their reasons for going into business; the disadvantages and advantages of being a woman business owner; their chief problem and what they now wish they had done differently; how important income from their business was; and whether their expectations had been met. In order to gain fresh insights and to collect qualitative data, respondents were encouraged to add their comments, and many did. In order to investigate whether there is a difference between male and female entrepreneurs, a second questionnaire intended for male as well as female respondents was later sent to advertising and public relations firms and retailers in the greater Atlanta area. …

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