Gender and Small Business Success: An Inquiry into Women's Relative Disadvantage

Abstract

Even among a successful group of small business owners, women generate lower sales volumes and derive less income than their male counterparts. Alternative explanations of women's relative disadvantage are evaluated systematically. The characteristics of the owner and the small business that differ between genders explain the discrepancy in financial success, with the smaller size of women's businesses emerging as the major explanatory factor. Women's lack of experience and their concentration in the least profitable industries contribute strongly to the gender discrepancy as well. The processes through which the female small business owner generates sales and derives income are quite similar to those of her male counterpart, but even successful women are not as well positioned to exploit business opportunities as their male counterparts because of their structural disadvantages both within and outside of the business arena.

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