Directory UMM :Data Elmu:jurnal:T:Training And Education:Vol42.Issue4-5.2000:
Improving the numbers
and performance of
women-owned
businesses: some
implications for
training and advisory
services
Sara Carter
The author
Sara Carter is a Reader in the Department of Marketing,
University of Strathclyde, Glasgow, UK.
Keywords
Women, Entrepreneurs, Start-ups, Training,
Advisory services
Abstract
The importance of women as a largely untapped pool of
entrepreneurs has been widely recognised by economic
development agencies. However, despite a number of
initiatives designed to stimulate female self-employment,
relatively few women are starting in business. Research
has shown that the experience of business ownership for
women is very different than for men. While early studies
of female entrepreneurship suggested that the start up
period posed particular constraints for women, it was
assumed that these barriers were resolved once trading
commenced. The use of more sophisticated
methodologies and sampling strategies has revealed
profound gender differences in both women's experiences
of business ownership and the performance of women
owned firms. Some of the key research findings which
have emerged from gender based studies of business
ownership are outlined, and the implications of these
findings for training and advisory services dealing with
the small business sector are examined.
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Education + Training
Volume 42 . Number 4/5 . 2000 . pp. 326±333
# MCB University Press . ISSN 0040-0912
Introduction
Although there has been a substantial increase
in the number of self-employed women over
the past 20 years, the female share of selfemployment in the UK (about 26 per cent of
the self-employed population) has remained
relatively constant (Labour Force Survey,
1999). Low business start-up rates for women
in the UK are replicated across many
northern European countries (Reynolds et al.,
1999), but are in stark contrast with those of
North America where women now account
for 38 per cent of small business ownership
(Brush and Hisrich, 1999). The UK figures
are particularly disappointing given the range
of trends expected to stimulate female
entrepreneurial activity, such as:
.
the growth in the number of working
women;
.
unprecedented levels of female rates of
remuneration;
.
an overall expansion in the services
sectors;
.
the fragmentation and growth of local
markets;
.
the increase in ``feminised'' markets; and
.
the development and diffusion of homebased communications technologies.
These trends appear to have had little impact
on rates of female self-employment.
Research which has explored the
motivations and experiences of female
entrepreneurs is scarce in comparison with
the volume of research that has examined the
small firm (Baker et al., 1997). Nevertheless,
studies that have been undertaken have
started to reveal clear and unequivocal
differences in women's experience of selfemployment and business ownership (Carter,
2000). Gender differences which may act as
constraints on both business start-up and
growth are apparent in many aspects of
female entrepreneurial activity and include
women's pre-venture experience of the labour
market, the financing of female owned firms,
the use of networks in the management of
firms and the overall under-performance of
female owned firms.
This article discusses these gender-related
differences and examines their implications
for training and advisory services dealing with
women-owned businesses. Following this
introduction, the article starts by
documenting the increase in the numbers of
women entering self-employment and
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Sara Carter
business ownership. The article then reviews
some of the extant research indicating gender
differences in the management of small firms.
The article concludes with a discussion of
how training and advisory services can assist
in improving the experience and performance
of women in business.
Female business ownership: numbers
and trends
Between 1979 and 1997 the number of selfemployed women in the UK increased by 163
per cent, from 319,000 to 840,000. In the
same period the number of self-employed
males increased by 67 per cent, from
1,449,000 to 2,421,000 (see Table I). While
these figures appear to indicate a rapid and
dramatic growth in the participation of
women in business ownership activities, more
detailed analysis of the UK Labour Force
Survey suggests that this interpretation should
be treated cautiously (Curran and Burrows,
1988; Daly, 1991; Brooksbank, 2000). In
particular, the absolute rise in female selfemployment appears to have been largely
caused by an increase in the number of
women in the labour market as a whole. The
rate of female self-employment has increased
less, but is still a substantial growth, from
approximately 3.12 per cent of total females
economically active in 1979 to 6.76 per cent
in 1997. During the same period, the rate of
male self-employment increased from 9.27
per cent of total males economically active in
1979 to 15.43 per cent in 1997.
Further insight into national trends can be
seen through the example of one UK region.
In Scotland, between 1990 and 1999, the
number of self-employed women increased by
6,830, from 47,957 in 1990 to 54,787 in 1999
(see Table II). As in the UK as a whole,
growth in female self-employment was not
consistent over the ten-year period.
Throughout the decade, there were marked
fluctuations in the numbers of self-employed
women, including an overall decline in 1992
when numbers dropped below the 1990 base
year. In every other year, however, the
numbers of self-employed females in Scotland
showed a growth over the 1990 base-year, and
a period between 1995 and 1998 when
numbers exceeded 60,000. The female share
of self-employment also increased, but by a
relatively modest proportion. In 1990 female
share of self-employment was 23.08 per cent.
By 1999, this had increased to 25.73 per cent.
Although fluctuations were also seen in the
female share of self-employment over the tenyear period, since 1993 they have marginally
exceeded 25 per cent.
During the same period, male selfemployment in Scotland also demonstrated
Table I UK male and female employment and self-employment 1979-1997
Year
Male
employee
1979
1981
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
13,381
12,427
11,672
11,643
11,683
11,583
11,487
11,836
11,984
12,082
11,803
11,363
11,154
11,209
11,380
11,551
11,817
Male
Percentage
self-employed self-employeda
1,449
1,753
1,759
1,988
2,039
2,057
2,231
2,375
2,626
2,647
2,535
2,374
2,321
2,414
2,480
2,403
2,421
9.27
11.12
11.35
12.65
12.90
13.07
14.11
14.86
16.30
16.39
15.77
14.96
14.79
15.40
15.84
15.34
15.43
Note: a Self-employed as percentage of total economically active
Source: Labour Force Survey (1997)
327
Female
employee
9,220
9,147
8,774
9,030
9,207
9,399
9,522
9,872
10,285
10,406
10,329
10,214
10,217
10,265
10,357
10,534
10,690
Female
Percentage
self-employed self-employeda
319
438
533
619
664
661
727
761
803
824
784
773
788
806
795
810
840
3.12
4.16
5.07
5.65
5.91
5.79
6.25
6.43
6.62
6.75
6.43
6.36
6.47
6.61
6.52
6.58
6.76
Performance of women-owned businesses
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Volume 42 . Number 4/5 . 2000 . 326±333
Sara Carter
Table II Self-employment in Scotland by gender 1990-1999
Year
Total
self-employed
Males
self-employed
Females
self-employed
Females self-employed
(percentage of total)
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
207,777
223,851
216,373
217,708
225,216
234,630
224,997
230,915
233,883
212,888
159,820
173,798
171,447
160,737
166,764
174,133
161,394
168,146
172,042
158,100
47,957
50,054
44,927
56,971
58,452
60,497
63,603
62,769
61,842
54,787
23.08
22.36
20.76
26.16
25.95
25.78
28.26
27.18
26.44
25.73
Source: Labour Force Survey (1990-1999)
marked fluctuations, and ended the decade
with an overall decline in numbers (±1,720) in
1999, compared with 1990 figures. This,
however, was the only year of the ten-year
period when male self-employment dipped
below the 1990 base. Although there was no
consistent growth in male self-employment
over the decade, every other year saw a
growth over the 1990 base, and figures in
excess of 170,000 in four of the years (1991,
1992, 1995 and 1998). Over the ten-year
period, the mean growth in male selfemployment was 4.73 per cent. The mean
growth in female self-employment was 19.06
per cent.
Similar trends in business ownership have
been seen in many other northern European
countries. In Sweden, for example, women
represent 23 per cent of all business start ups
and account for around 25 per cent of all
private firms in the country (Nilsson, 1997), a
proportion common to many European
states. In the USA, however, there has been
strong growth in the number of women
starting in business and women now account
for 38 per cent of business owners, employ 25
per cent of company workers and contribute
more than US$2.3 trillion in sales (Carter and
Allen, 1997; Brush and Hisrich, 1999).
Women's experience of business
ownership
Prior to the mid-1980s, the contribution
women made to the small firms sector either
as business owners in their own right, or more
commonly as providers of labour to family
owned firms, was largely unrecognised by
academics and policy makers alike (Goffee
and Scase, 1985; Watkins and Watkins,
1984). The growth in interest in the small
business sector, coupled with a rise in the
number of women moving into selfemployment, triggered a number of important
research studies investigating the issue of
gender and enterprise.
Influenced by the existing small business
literature, early studies of female
entrepreneurship concentrated mainly upon
the motivations for business start up
(Schreier, 1973; Schwartz, 1976; Goffee and
Scase, 1985; Hisrich and Brush, 1986) and,
to a lesser extent, the gender-related barriers
experienced during this phase of business
ownership (Watkins and Watkins, 1984;
Hisrich and Brush, 1986; Carter and
Cannon, 1992). In Europe, researchers
focused their attention on trying to establish
linkages between motivations for female selfemployment and the overall position of
women in the labour market (Goffee and
Scase, 1985; van der Wees and Romijn, 1987;
Cromie and Hayes, 1988; Carter and
Cannon, 1992). As Berg (1997, p. 259)
highlighted, however, the aim of the majority
of the studies was ``mainly to make
comparisons with male entrepreneurs and to
make women entrepreneurs visible''.
Overall, these studies presented a prima
facie picture of businesswomen with more
similarities than differences to their male
counterparts. Like men, the most frequently
cited reason for starting in business was the
search for independence and control over
one's destiny (Goffee and Scase, 1985;
Hisrich and Brush, 1986). The greatest
barriers to business formation and success
were access to capital and mobilising start up
resources (Hisrich and Brush, 1986). Few of
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Performance of women-owned businesses
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Volume 42 . Number 4/5 . 2000 . 326±333
Sara Carter
the early studies developed sophisticated
taxonomies, preferring to identify female
proprietors as a homogeneous group (Allen
and Truman, 1993), and there was an
implicit acceptance by researchers that,
beyond the start-up phase, few significant
differences existed between male and
female owned and managed companies
(Birley, 1989).
More recent studies have continued to
explore the issue of management of female
owned businesses and the field has developed
to encompass more sophisticated
methodologies, larger scale samples, and
more robust sampling procedures.
Importantly, the focus of investigation has
evolved to concentrate on the effect of gender
on both the experience of self-employment
and the relative performance of small
businesses (Kalleberg and Leicht, 1991; Rosa
and Hamilton, 1994; Rosa et al., 1996; Berg,
1997; Carter and Allen, 1997; Marlow,
1997). As a consequence, clear gender related
differences are emerging in women's
experience of self-employment and business
ownership. These differences are apparent in
many aspects of female entrepreneurial
activity from pre-venture experience:
.
the level of constraints in accessing
finance and other resources required for
start-up and business growth;
.
the use of networking in the management
of the ongoing venture; and
.
the performance of female owned firms.
Pre-venture experience of the labour
market
Women's experiences of self-employment in
part reflect their individual experiences of, as
well as the overall position of women in, the
labour market. Despite the increase in both
the number of working women and in the
continuity of their working lives, most women
still hold low-paid, unskilled or semi-skilled
positions. Employment is often part-time and
concentrated in the service sectors and, on
average, women still earn only 80 per cent of
what their male counterparts earn (Engender,
1999). At the executive level, only 10 per cent
of the UK's 200 largest companies have
female board members (Brush, 1997).
Discrimination in the workplace is often
assumed to be associated with older
generations, but remuneration inequalities
still adversely affect women soon after labour
market entry (Breitenbach, 1999).
Some authors have suggested that selfemployment for women is both a reaction to,
and a means of escaping, the persistent
inequalities and the occupational confines of
the labour market (Goffee and Scase, 1985;
Carter and Cannon, 1992). Starting a
business has frequently been seen as an
obvious means of circumventing the ``glass
ceiling'' experienced by many women
(Buttner and Moore, 1997). While there is
little empirical evidence to support this thesis,
there is a growing body of research indicating
that pre-venture experience of the labour
market has an effect on the ability of
individuals to mobilise the appropriate
resources to start in business. In comparison
with men, when women enter selfemployment they do so with fewer financial
assets, less experience in management and
under-resourced in terms of their human and
social capital.
The financing of female-owned firms
Previous studies into gender and business
ownership have resulted in conflicting
evidence about whether finance poses
problems for women starting and running
businesses. Four areas of the financing
process have, however, been consistently
noted as posing particular problems for
women. First, women may be disadvantaged
in their ability to raise start up finance
(Schwartz, 1976; Carter and Cannon, 1992;
Johnson and Storey, 1993; Koper, 1993; Van
Auken et al., 1993). Second, guarantees
required for external financing may be beyond
the scope of most women's personal assets
and credit track record (Hisrich and Brush,
1986; Riding and Swift, 1990). Third, finance
for the ongoing business may be less available
for female owned firms than it is for male
enterprises, largely due to women's inability
to penetrate informal financial networks (Olm
et al., 1988; Aldrich, 1989). Finally, female
entrepreneurs' relationships with bankers may
suffer because of sexual stereotyping and
discrimination (Hisrich and Brush, 1986;
Buttner and Rosen, 1989).
Carter and Rosa's (1998) study of 600 UK
firms demonstrated that female business
owners use substantially less capital at start up
than do male business owners. In total, across
three different sectors included in the
investigation, men used three times more start
up capital than women (see Table III).
Importantly, start up capital was significantly
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Volume 42 . Number 4/5 . 2000 . 326±333
Sara Carter
Table III Median starting capital by sex of respondent
(to the nearest £500)
Median (£)
Women
Men
Textile/clothing
Business services
Hotel/catering
Single owners
Multiple owners
Total sample
1,000
1,000
15,000
2,000
3,000
2,000
3,000
2,000
25,000
5,500
6,000
6,000
undertaken in New Zealand, Fay and
Williams (1993) found some evidence that
women encounter credit discrimination in
seeking start-up funding, although the study
concluded that this was not necessarily the
fault of the banks. Nevertheless, Fay and
Williams emphasise (1993, p. 365) that:
. . . the existence of discriminatory behaviour as a
consequence of prejudice and stereotyping can
be demonstrated only when all relevant factors
up to the point of loan application have been
equalised.
Source: Carter and Rosa (1998, p. 229)
related to current value of capital assets, sales
turnover, total number of employees and
number of core full-time employees. It
appears, therefore, that shortfalls in initial
capitalization can set women at a
disadvantage in being able to grow their
business, and that the extent of this
disadvantage may have been under-estimated
in previous studies. The sources of start-up
capital were, however, common to both men
and women with greatest use being made of
personal and family savings, bank overdrafts
and bank loans. Similarly, no significant
gender differences were found in the use of
guarantees for business financing. An analysis
of financial arrangements for the ongoing
business revealed both gender and sectoral
differences in the sources used for ongoing
finance. Men, particularly those in the hotel
and catering sector, were more likely to make
use of bank loans and overdrafts. Conversely,
women were less likely to use institutional
arrangements, such as bank loans and
overdrafts, and were also less likely to take
advantage of cheaper sources, such as
extended supplier credit. Relationships with
institutional lenders were generally reported
as being good, although men operating in
business services were more likely to describe
their relationship as ``very good'' (Carter and
Rosa, 1998, p. 237).
Other research studies have extended the
gender and finance debate further by
considering the role of banks in providing
finance to female business owners. In a
development of an ``asymmetric information''
approach (Fletcher, 1994), gender researchers
have attempted to determine whether banks
have (unstated) differential lending policies to
male and female business owners and, if so,
whether these policies are a result of unwitting
socialisation or outright discrimination (Fay
and Williams, 1993; Koper, 1993). In a study
Researchers of female entrepreneurship are
still a long way from being able to control
factors so precisely. As Brush (1992) points
out, this area has been studied insufficiently
to enable firm conclusions to be reached.
Networks and female-owned firms
Research that has investigated the
management of female owned enterprises has
often alluded to the important role of
networks in the survival and success of
individual firms (Olm et al., 1988; Aldrich,
1989; Rosa and Hamilton, 1994). Gender
differences in the way networks are created
and used have been cited as having an
influence on certain aspects of the
management process; for example, enabling
improved access to finance and the
development of strong relationships with
financial backers (Carter and Rosa, 1998).
Researchers such as Rosa and Hamilton
(1994) have argued that networking is both
more critical to, and should be greater among,
female entrepreneurs than male
entrepreneurs. This approach is, however,
countered by research conducted by Aldrich
(1989) which suggested that women's
networking levels are lower than men's.
Irrespective of the precise nature of the
influence which gender has upon networking,
it is clear that profound gender differences
exist. As Brush (1997, p. 22) concluded:
. . . women are less welcome in social networks
. . . and are left out of some of those loops,
meaning they do not have access to as much
information. So social structures and the way
that women socialise influence the human and
social capital endowments with which they start
their businesses.
The performance of female-owned firms
The performance of small businesses, that is
their ability to contribute to job and wealth
creation through business start-up, survival
and growth, has become an important area of
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Education + Training
Volume 42 . Number 4/5 . 2000 . 326±333
Sara Carter
recent policy and academic debate (Storey,
1994; Smallbone and Wyer, 2000). Very little
of this work has, however, focused on the
issue of gender and business performance. In
a longitudinal study of 298 UK businesses, of
which 67 were female owned, Johnson and
Storey (1993) found that women proprietors
in their study had created more stable
enterprises than had their male sample,
although on average the sales turnover for
women was lower than for males. Kalleberg
and Leicht (1991) also found only slight and
inconclusive differences in key performance
measures in their sample of 400 businesses
from three industrial sectors in Indiana. Rosa
et al.'s (1996) study outlined four different
measures of performance:
(1) primary performance measures (number
of employees, growth in employees, sales
turnover, value of capital assets);
(2) proxy performance measures
(geographical range of markets, VAT
registration);
(3) subjective measures (including the ability
of the business to meet business and
domestic needs); and
(4) entrepreneurial performance measures
(the desire for growth, the ownership of
multiple businesses).
The results of the primary performance
measures suggested that women's businesses
employed fewer core staff, were less likely to
have grown substantially in employment
(more than 20 employees) after 12 months in
business, had a lower sales turnover, and were
valued at a lower level than male owned
businesses (Rosa et al., 1996). The analysis of
proxy performance measures also indicated
that women-owned businesses were more
likely to serve only local markets, although
gender differences in export sales were nonsignificant. Subjective measures of
performance, however, were less clearly
divided by gender. Women, however,
appeared less optimistic than men in their
expectation of future business success and
were also less likely to believe that their
business created sufficient income to meet
domestic needs. The entrepreneurial
performance measure demonstrated more
marked sex differences. Men were
significantly more likely to own other
businesses (19.6 per cent compared with 8.6
per cent) and also to have strong growth
ambitions in so far as they wanted to expand
their businesses ``as far as they could (43 per
cent versus 34 per cent)'' (Rosa et al., 1996,
p. 469).
Collectively, the results of the various
studies that compare male and female
performance differences offer mixed results. It
appears, however, that the determinants of
performance (i.e. the measures that are used
by owners to assess their business
performance) are similar by gender. Contrary
to many initial studies of gender and
enterprise, there is no evidence to suggest that
men are more profit orientated than women,
or less likely to value intrinsic goals. Although
Rosa et al. (1996) found some marked sex
differences in performance indicators, they
concluded that complexity of the overall
pattern of results suggests that a more
sophisticated interpretation was required than
simply attributing differences to gender alone.
Conclusions: implications for training
and advisory services
The results of the various studies that have
examined the number and experiences of
women in business suggest that there are
many implications for training and advisory
services. The issues for training and advisory
services can be divided according to stage of
business development: start-up and growth
and development. To encourage larger
numbers of women into self-employment,
there is a clear need to widen access to
business start up training and advice. In
practice, this implies offering a wide range of
start up and support services which encourage
women into business. Women enter business
from a wide variety of backgrounds and with a
wide range of experience. The provision of
business start up training and advice needs to
accommodate these very different
experiences. Women attending start-up
programmes have often criticised these
programmes as being male-orientated and
prescriptive. Despite the prevailing view
among management theorists of the need for
businesses to use ``female'' management skills
(Cromie and O'Sullivan, 1999), there is little
evidence of this being addressed in start up
programmes. By contrast, women are
expected to conform to male models and
standards of behaviour and learning is seen as
being ``one-way'', that is, women learn male
behaviours.
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Sara Carter
Not only is there a need to widen access and
accommodate typically female experiences
within start up training programmes, there is
also a need to amend the content of these
programmes to address the weaker financial
position that many women start from.
Research has shown that women not only
have fewer financial resources than men, they
are also more reluctant to take on large sums
of debt when starting a business. Their
particular experience and attitudes towards
finance strongly differentiates them from their
male counterparts. It is now also clear that
initial under-capitalisation has a long-term
effect on business survival and success.
Capitalisation issues, in particular women's
access to and usage of capital, need to be
addressed by start-up programmes and
business advisers.
A long running debate in the development
of start up training programmes and services
for women, has been concerned with the need
for single sex provision (Richardson and
Hartshorn, 1993). Interestingly, many
women business owners tend to be dismissive
of women-only start-up services and training
programmes. A frequently voiced view is that
as women have to trade and compete in
mainstream markets, they should also be
prepared to participate in mainstream startup programmes. In contrast, those women
who have participated in women-only
programmes are overwhelmingly supportive
of such schemes. The key issue in single-sex
provision lies in the fact that women come to
business ownership from a wide variety of
backgrounds and experiences. Some women
may require greater nurturing of selfconfidence and esteem, as well as business
skills. For this reason, it seems clear that if
there is a demand for such services, there
should also be provision.
A concentration on improving the numbers
entering self-employment has resulted in little
emphasis on the provision of after-care
training and advisory services for the ongoing
firm. Arguably, as many women lack the
management experience and access to
networks, they have a greater need for ongoing support. Many women identify
personal skill shortages such as marketing and
sales skills, management skills and acquiring
skilled labour, as constraints on the
development of their firms. Innovative
after-care schemes can be provided which are
both better suited to the needs of individual
women and less resource intensive. These
mechanisms do not, however, necessarily
require heavy investment. Most start-up
programmes offer formal training that
ends after a pre-determined time. The
continuation of self-help groups, or peer
mentoring, after formal start-up programmes
have finished is an innovative and low cost
means of providing ongoing support to
new firms. Peer-mentoring is an example
of a particularly valuable form of self-help
for women, which requires only basic
resources to initiate and encourages a
self-help approach to developing business
ownership skills.
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333
and performance of
women-owned
businesses: some
implications for
training and advisory
services
Sara Carter
The author
Sara Carter is a Reader in the Department of Marketing,
University of Strathclyde, Glasgow, UK.
Keywords
Women, Entrepreneurs, Start-ups, Training,
Advisory services
Abstract
The importance of women as a largely untapped pool of
entrepreneurs has been widely recognised by economic
development agencies. However, despite a number of
initiatives designed to stimulate female self-employment,
relatively few women are starting in business. Research
has shown that the experience of business ownership for
women is very different than for men. While early studies
of female entrepreneurship suggested that the start up
period posed particular constraints for women, it was
assumed that these barriers were resolved once trading
commenced. The use of more sophisticated
methodologies and sampling strategies has revealed
profound gender differences in both women's experiences
of business ownership and the performance of women
owned firms. Some of the key research findings which
have emerged from gender based studies of business
ownership are outlined, and the implications of these
findings for training and advisory services dealing with
the small business sector are examined.
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Education + Training
Volume 42 . Number 4/5 . 2000 . pp. 326±333
# MCB University Press . ISSN 0040-0912
Introduction
Although there has been a substantial increase
in the number of self-employed women over
the past 20 years, the female share of selfemployment in the UK (about 26 per cent of
the self-employed population) has remained
relatively constant (Labour Force Survey,
1999). Low business start-up rates for women
in the UK are replicated across many
northern European countries (Reynolds et al.,
1999), but are in stark contrast with those of
North America where women now account
for 38 per cent of small business ownership
(Brush and Hisrich, 1999). The UK figures
are particularly disappointing given the range
of trends expected to stimulate female
entrepreneurial activity, such as:
.
the growth in the number of working
women;
.
unprecedented levels of female rates of
remuneration;
.
an overall expansion in the services
sectors;
.
the fragmentation and growth of local
markets;
.
the increase in ``feminised'' markets; and
.
the development and diffusion of homebased communications technologies.
These trends appear to have had little impact
on rates of female self-employment.
Research which has explored the
motivations and experiences of female
entrepreneurs is scarce in comparison with
the volume of research that has examined the
small firm (Baker et al., 1997). Nevertheless,
studies that have been undertaken have
started to reveal clear and unequivocal
differences in women's experience of selfemployment and business ownership (Carter,
2000). Gender differences which may act as
constraints on both business start-up and
growth are apparent in many aspects of
female entrepreneurial activity and include
women's pre-venture experience of the labour
market, the financing of female owned firms,
the use of networks in the management of
firms and the overall under-performance of
female owned firms.
This article discusses these gender-related
differences and examines their implications
for training and advisory services dealing with
women-owned businesses. Following this
introduction, the article starts by
documenting the increase in the numbers of
women entering self-employment and
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Sara Carter
business ownership. The article then reviews
some of the extant research indicating gender
differences in the management of small firms.
The article concludes with a discussion of
how training and advisory services can assist
in improving the experience and performance
of women in business.
Female business ownership: numbers
and trends
Between 1979 and 1997 the number of selfemployed women in the UK increased by 163
per cent, from 319,000 to 840,000. In the
same period the number of self-employed
males increased by 67 per cent, from
1,449,000 to 2,421,000 (see Table I). While
these figures appear to indicate a rapid and
dramatic growth in the participation of
women in business ownership activities, more
detailed analysis of the UK Labour Force
Survey suggests that this interpretation should
be treated cautiously (Curran and Burrows,
1988; Daly, 1991; Brooksbank, 2000). In
particular, the absolute rise in female selfemployment appears to have been largely
caused by an increase in the number of
women in the labour market as a whole. The
rate of female self-employment has increased
less, but is still a substantial growth, from
approximately 3.12 per cent of total females
economically active in 1979 to 6.76 per cent
in 1997. During the same period, the rate of
male self-employment increased from 9.27
per cent of total males economically active in
1979 to 15.43 per cent in 1997.
Further insight into national trends can be
seen through the example of one UK region.
In Scotland, between 1990 and 1999, the
number of self-employed women increased by
6,830, from 47,957 in 1990 to 54,787 in 1999
(see Table II). As in the UK as a whole,
growth in female self-employment was not
consistent over the ten-year period.
Throughout the decade, there were marked
fluctuations in the numbers of self-employed
women, including an overall decline in 1992
when numbers dropped below the 1990 base
year. In every other year, however, the
numbers of self-employed females in Scotland
showed a growth over the 1990 base-year, and
a period between 1995 and 1998 when
numbers exceeded 60,000. The female share
of self-employment also increased, but by a
relatively modest proportion. In 1990 female
share of self-employment was 23.08 per cent.
By 1999, this had increased to 25.73 per cent.
Although fluctuations were also seen in the
female share of self-employment over the tenyear period, since 1993 they have marginally
exceeded 25 per cent.
During the same period, male selfemployment in Scotland also demonstrated
Table I UK male and female employment and self-employment 1979-1997
Year
Male
employee
1979
1981
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
13,381
12,427
11,672
11,643
11,683
11,583
11,487
11,836
11,984
12,082
11,803
11,363
11,154
11,209
11,380
11,551
11,817
Male
Percentage
self-employed self-employeda
1,449
1,753
1,759
1,988
2,039
2,057
2,231
2,375
2,626
2,647
2,535
2,374
2,321
2,414
2,480
2,403
2,421
9.27
11.12
11.35
12.65
12.90
13.07
14.11
14.86
16.30
16.39
15.77
14.96
14.79
15.40
15.84
15.34
15.43
Note: a Self-employed as percentage of total economically active
Source: Labour Force Survey (1997)
327
Female
employee
9,220
9,147
8,774
9,030
9,207
9,399
9,522
9,872
10,285
10,406
10,329
10,214
10,217
10,265
10,357
10,534
10,690
Female
Percentage
self-employed self-employeda
319
438
533
619
664
661
727
761
803
824
784
773
788
806
795
810
840
3.12
4.16
5.07
5.65
5.91
5.79
6.25
6.43
6.62
6.75
6.43
6.36
6.47
6.61
6.52
6.58
6.76
Performance of women-owned businesses
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Sara Carter
Table II Self-employment in Scotland by gender 1990-1999
Year
Total
self-employed
Males
self-employed
Females
self-employed
Females self-employed
(percentage of total)
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
207,777
223,851
216,373
217,708
225,216
234,630
224,997
230,915
233,883
212,888
159,820
173,798
171,447
160,737
166,764
174,133
161,394
168,146
172,042
158,100
47,957
50,054
44,927
56,971
58,452
60,497
63,603
62,769
61,842
54,787
23.08
22.36
20.76
26.16
25.95
25.78
28.26
27.18
26.44
25.73
Source: Labour Force Survey (1990-1999)
marked fluctuations, and ended the decade
with an overall decline in numbers (±1,720) in
1999, compared with 1990 figures. This,
however, was the only year of the ten-year
period when male self-employment dipped
below the 1990 base. Although there was no
consistent growth in male self-employment
over the decade, every other year saw a
growth over the 1990 base, and figures in
excess of 170,000 in four of the years (1991,
1992, 1995 and 1998). Over the ten-year
period, the mean growth in male selfemployment was 4.73 per cent. The mean
growth in female self-employment was 19.06
per cent.
Similar trends in business ownership have
been seen in many other northern European
countries. In Sweden, for example, women
represent 23 per cent of all business start ups
and account for around 25 per cent of all
private firms in the country (Nilsson, 1997), a
proportion common to many European
states. In the USA, however, there has been
strong growth in the number of women
starting in business and women now account
for 38 per cent of business owners, employ 25
per cent of company workers and contribute
more than US$2.3 trillion in sales (Carter and
Allen, 1997; Brush and Hisrich, 1999).
Women's experience of business
ownership
Prior to the mid-1980s, the contribution
women made to the small firms sector either
as business owners in their own right, or more
commonly as providers of labour to family
owned firms, was largely unrecognised by
academics and policy makers alike (Goffee
and Scase, 1985; Watkins and Watkins,
1984). The growth in interest in the small
business sector, coupled with a rise in the
number of women moving into selfemployment, triggered a number of important
research studies investigating the issue of
gender and enterprise.
Influenced by the existing small business
literature, early studies of female
entrepreneurship concentrated mainly upon
the motivations for business start up
(Schreier, 1973; Schwartz, 1976; Goffee and
Scase, 1985; Hisrich and Brush, 1986) and,
to a lesser extent, the gender-related barriers
experienced during this phase of business
ownership (Watkins and Watkins, 1984;
Hisrich and Brush, 1986; Carter and
Cannon, 1992). In Europe, researchers
focused their attention on trying to establish
linkages between motivations for female selfemployment and the overall position of
women in the labour market (Goffee and
Scase, 1985; van der Wees and Romijn, 1987;
Cromie and Hayes, 1988; Carter and
Cannon, 1992). As Berg (1997, p. 259)
highlighted, however, the aim of the majority
of the studies was ``mainly to make
comparisons with male entrepreneurs and to
make women entrepreneurs visible''.
Overall, these studies presented a prima
facie picture of businesswomen with more
similarities than differences to their male
counterparts. Like men, the most frequently
cited reason for starting in business was the
search for independence and control over
one's destiny (Goffee and Scase, 1985;
Hisrich and Brush, 1986). The greatest
barriers to business formation and success
were access to capital and mobilising start up
resources (Hisrich and Brush, 1986). Few of
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Performance of women-owned businesses
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Sara Carter
the early studies developed sophisticated
taxonomies, preferring to identify female
proprietors as a homogeneous group (Allen
and Truman, 1993), and there was an
implicit acceptance by researchers that,
beyond the start-up phase, few significant
differences existed between male and
female owned and managed companies
(Birley, 1989).
More recent studies have continued to
explore the issue of management of female
owned businesses and the field has developed
to encompass more sophisticated
methodologies, larger scale samples, and
more robust sampling procedures.
Importantly, the focus of investigation has
evolved to concentrate on the effect of gender
on both the experience of self-employment
and the relative performance of small
businesses (Kalleberg and Leicht, 1991; Rosa
and Hamilton, 1994; Rosa et al., 1996; Berg,
1997; Carter and Allen, 1997; Marlow,
1997). As a consequence, clear gender related
differences are emerging in women's
experience of self-employment and business
ownership. These differences are apparent in
many aspects of female entrepreneurial
activity from pre-venture experience:
.
the level of constraints in accessing
finance and other resources required for
start-up and business growth;
.
the use of networking in the management
of the ongoing venture; and
.
the performance of female owned firms.
Pre-venture experience of the labour
market
Women's experiences of self-employment in
part reflect their individual experiences of, as
well as the overall position of women in, the
labour market. Despite the increase in both
the number of working women and in the
continuity of their working lives, most women
still hold low-paid, unskilled or semi-skilled
positions. Employment is often part-time and
concentrated in the service sectors and, on
average, women still earn only 80 per cent of
what their male counterparts earn (Engender,
1999). At the executive level, only 10 per cent
of the UK's 200 largest companies have
female board members (Brush, 1997).
Discrimination in the workplace is often
assumed to be associated with older
generations, but remuneration inequalities
still adversely affect women soon after labour
market entry (Breitenbach, 1999).
Some authors have suggested that selfemployment for women is both a reaction to,
and a means of escaping, the persistent
inequalities and the occupational confines of
the labour market (Goffee and Scase, 1985;
Carter and Cannon, 1992). Starting a
business has frequently been seen as an
obvious means of circumventing the ``glass
ceiling'' experienced by many women
(Buttner and Moore, 1997). While there is
little empirical evidence to support this thesis,
there is a growing body of research indicating
that pre-venture experience of the labour
market has an effect on the ability of
individuals to mobilise the appropriate
resources to start in business. In comparison
with men, when women enter selfemployment they do so with fewer financial
assets, less experience in management and
under-resourced in terms of their human and
social capital.
The financing of female-owned firms
Previous studies into gender and business
ownership have resulted in conflicting
evidence about whether finance poses
problems for women starting and running
businesses. Four areas of the financing
process have, however, been consistently
noted as posing particular problems for
women. First, women may be disadvantaged
in their ability to raise start up finance
(Schwartz, 1976; Carter and Cannon, 1992;
Johnson and Storey, 1993; Koper, 1993; Van
Auken et al., 1993). Second, guarantees
required for external financing may be beyond
the scope of most women's personal assets
and credit track record (Hisrich and Brush,
1986; Riding and Swift, 1990). Third, finance
for the ongoing business may be less available
for female owned firms than it is for male
enterprises, largely due to women's inability
to penetrate informal financial networks (Olm
et al., 1988; Aldrich, 1989). Finally, female
entrepreneurs' relationships with bankers may
suffer because of sexual stereotyping and
discrimination (Hisrich and Brush, 1986;
Buttner and Rosen, 1989).
Carter and Rosa's (1998) study of 600 UK
firms demonstrated that female business
owners use substantially less capital at start up
than do male business owners. In total, across
three different sectors included in the
investigation, men used three times more start
up capital than women (see Table III).
Importantly, start up capital was significantly
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Sara Carter
Table III Median starting capital by sex of respondent
(to the nearest £500)
Median (£)
Women
Men
Textile/clothing
Business services
Hotel/catering
Single owners
Multiple owners
Total sample
1,000
1,000
15,000
2,000
3,000
2,000
3,000
2,000
25,000
5,500
6,000
6,000
undertaken in New Zealand, Fay and
Williams (1993) found some evidence that
women encounter credit discrimination in
seeking start-up funding, although the study
concluded that this was not necessarily the
fault of the banks. Nevertheless, Fay and
Williams emphasise (1993, p. 365) that:
. . . the existence of discriminatory behaviour as a
consequence of prejudice and stereotyping can
be demonstrated only when all relevant factors
up to the point of loan application have been
equalised.
Source: Carter and Rosa (1998, p. 229)
related to current value of capital assets, sales
turnover, total number of employees and
number of core full-time employees. It
appears, therefore, that shortfalls in initial
capitalization can set women at a
disadvantage in being able to grow their
business, and that the extent of this
disadvantage may have been under-estimated
in previous studies. The sources of start-up
capital were, however, common to both men
and women with greatest use being made of
personal and family savings, bank overdrafts
and bank loans. Similarly, no significant
gender differences were found in the use of
guarantees for business financing. An analysis
of financial arrangements for the ongoing
business revealed both gender and sectoral
differences in the sources used for ongoing
finance. Men, particularly those in the hotel
and catering sector, were more likely to make
use of bank loans and overdrafts. Conversely,
women were less likely to use institutional
arrangements, such as bank loans and
overdrafts, and were also less likely to take
advantage of cheaper sources, such as
extended supplier credit. Relationships with
institutional lenders were generally reported
as being good, although men operating in
business services were more likely to describe
their relationship as ``very good'' (Carter and
Rosa, 1998, p. 237).
Other research studies have extended the
gender and finance debate further by
considering the role of banks in providing
finance to female business owners. In a
development of an ``asymmetric information''
approach (Fletcher, 1994), gender researchers
have attempted to determine whether banks
have (unstated) differential lending policies to
male and female business owners and, if so,
whether these policies are a result of unwitting
socialisation or outright discrimination (Fay
and Williams, 1993; Koper, 1993). In a study
Researchers of female entrepreneurship are
still a long way from being able to control
factors so precisely. As Brush (1992) points
out, this area has been studied insufficiently
to enable firm conclusions to be reached.
Networks and female-owned firms
Research that has investigated the
management of female owned enterprises has
often alluded to the important role of
networks in the survival and success of
individual firms (Olm et al., 1988; Aldrich,
1989; Rosa and Hamilton, 1994). Gender
differences in the way networks are created
and used have been cited as having an
influence on certain aspects of the
management process; for example, enabling
improved access to finance and the
development of strong relationships with
financial backers (Carter and Rosa, 1998).
Researchers such as Rosa and Hamilton
(1994) have argued that networking is both
more critical to, and should be greater among,
female entrepreneurs than male
entrepreneurs. This approach is, however,
countered by research conducted by Aldrich
(1989) which suggested that women's
networking levels are lower than men's.
Irrespective of the precise nature of the
influence which gender has upon networking,
it is clear that profound gender differences
exist. As Brush (1997, p. 22) concluded:
. . . women are less welcome in social networks
. . . and are left out of some of those loops,
meaning they do not have access to as much
information. So social structures and the way
that women socialise influence the human and
social capital endowments with which they start
their businesses.
The performance of female-owned firms
The performance of small businesses, that is
their ability to contribute to job and wealth
creation through business start-up, survival
and growth, has become an important area of
330
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Sara Carter
recent policy and academic debate (Storey,
1994; Smallbone and Wyer, 2000). Very little
of this work has, however, focused on the
issue of gender and business performance. In
a longitudinal study of 298 UK businesses, of
which 67 were female owned, Johnson and
Storey (1993) found that women proprietors
in their study had created more stable
enterprises than had their male sample,
although on average the sales turnover for
women was lower than for males. Kalleberg
and Leicht (1991) also found only slight and
inconclusive differences in key performance
measures in their sample of 400 businesses
from three industrial sectors in Indiana. Rosa
et al.'s (1996) study outlined four different
measures of performance:
(1) primary performance measures (number
of employees, growth in employees, sales
turnover, value of capital assets);
(2) proxy performance measures
(geographical range of markets, VAT
registration);
(3) subjective measures (including the ability
of the business to meet business and
domestic needs); and
(4) entrepreneurial performance measures
(the desire for growth, the ownership of
multiple businesses).
The results of the primary performance
measures suggested that women's businesses
employed fewer core staff, were less likely to
have grown substantially in employment
(more than 20 employees) after 12 months in
business, had a lower sales turnover, and were
valued at a lower level than male owned
businesses (Rosa et al., 1996). The analysis of
proxy performance measures also indicated
that women-owned businesses were more
likely to serve only local markets, although
gender differences in export sales were nonsignificant. Subjective measures of
performance, however, were less clearly
divided by gender. Women, however,
appeared less optimistic than men in their
expectation of future business success and
were also less likely to believe that their
business created sufficient income to meet
domestic needs. The entrepreneurial
performance measure demonstrated more
marked sex differences. Men were
significantly more likely to own other
businesses (19.6 per cent compared with 8.6
per cent) and also to have strong growth
ambitions in so far as they wanted to expand
their businesses ``as far as they could (43 per
cent versus 34 per cent)'' (Rosa et al., 1996,
p. 469).
Collectively, the results of the various
studies that compare male and female
performance differences offer mixed results. It
appears, however, that the determinants of
performance (i.e. the measures that are used
by owners to assess their business
performance) are similar by gender. Contrary
to many initial studies of gender and
enterprise, there is no evidence to suggest that
men are more profit orientated than women,
or less likely to value intrinsic goals. Although
Rosa et al. (1996) found some marked sex
differences in performance indicators, they
concluded that complexity of the overall
pattern of results suggests that a more
sophisticated interpretation was required than
simply attributing differences to gender alone.
Conclusions: implications for training
and advisory services
The results of the various studies that have
examined the number and experiences of
women in business suggest that there are
many implications for training and advisory
services. The issues for training and advisory
services can be divided according to stage of
business development: start-up and growth
and development. To encourage larger
numbers of women into self-employment,
there is a clear need to widen access to
business start up training and advice. In
practice, this implies offering a wide range of
start up and support services which encourage
women into business. Women enter business
from a wide variety of backgrounds and with a
wide range of experience. The provision of
business start up training and advice needs to
accommodate these very different
experiences. Women attending start-up
programmes have often criticised these
programmes as being male-orientated and
prescriptive. Despite the prevailing view
among management theorists of the need for
businesses to use ``female'' management skills
(Cromie and O'Sullivan, 1999), there is little
evidence of this being addressed in start up
programmes. By contrast, women are
expected to conform to male models and
standards of behaviour and learning is seen as
being ``one-way'', that is, women learn male
behaviours.
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Education + Training
Volume 42 . Number 4/5 . 2000 . 326±333
Sara Carter
Not only is there a need to widen access and
accommodate typically female experiences
within start up training programmes, there is
also a need to amend the content of these
programmes to address the weaker financial
position that many women start from.
Research has shown that women not only
have fewer financial resources than men, they
are also more reluctant to take on large sums
of debt when starting a business. Their
particular experience and attitudes towards
finance strongly differentiates them from their
male counterparts. It is now also clear that
initial under-capitalisation has a long-term
effect on business survival and success.
Capitalisation issues, in particular women's
access to and usage of capital, need to be
addressed by start-up programmes and
business advisers.
A long running debate in the development
of start up training programmes and services
for women, has been concerned with the need
for single sex provision (Richardson and
Hartshorn, 1993). Interestingly, many
women business owners tend to be dismissive
of women-only start-up services and training
programmes. A frequently voiced view is that
as women have to trade and compete in
mainstream markets, they should also be
prepared to participate in mainstream startup programmes. In contrast, those women
who have participated in women-only
programmes are overwhelmingly supportive
of such schemes. The key issue in single-sex
provision lies in the fact that women come to
business ownership from a wide variety of
backgrounds and experiences. Some women
may require greater nurturing of selfconfidence and esteem, as well as business
skills. For this reason, it seems clear that if
there is a demand for such services, there
should also be provision.
A concentration on improving the numbers
entering self-employment has resulted in little
emphasis on the provision of after-care
training and advisory services for the ongoing
firm. Arguably, as many women lack the
management experience and access to
networks, they have a greater need for ongoing support. Many women identify
personal skill shortages such as marketing and
sales skills, management skills and acquiring
skilled labour, as constraints on the
development of their firms. Innovative
after-care schemes can be provided which are
both better suited to the needs of individual
women and less resource intensive. These
mechanisms do not, however, necessarily
require heavy investment. Most start-up
programmes offer formal training that
ends after a pre-determined time. The
continuation of self-help groups, or peer
mentoring, after formal start-up programmes
have finished is an innovative and low cost
means of providing ongoing support to
new firms. Peer-mentoring is an example
of a particularly valuable form of self-help
for women, which requires only basic
resources to initiate and encourages a
self-help approach to developing business
ownership skills.
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