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March 31, 2008


Often when Amy and I are working with our female entrepreneur clients, we talk about the importance of understanding 'why' you are starting a business. What is the motivating factor or goal? Financial stability, earning power, flexibility, autonomy, filling a social need, engagement...etc. Understanding this why will not only help you to set your business infrastructure and determine appropriate offerings and products, but will also help you to solicit and find advice and resources that are relevant to the kind of business that you want to create!

It is frustrating when the variety of reasons that women have for starting businesses are not properly recognized, especially when women's businesses are compared to men's. People start businesses for very different reasons, and therefore very different results will determine success! I was heartened to see a blurb on a study in Business Week Small Business Magazine, which not only acknowledges the variety of reasons that businesses are started, but also shows men's and women's businesses perform equally well when compared to the business owners expectations for the business.

Gender Non-Gap
It's often said that men make better entrepreneurs than women. Not so. Companies founded by men and those started by women are equally profitable, according to research commissioned by the Small Business Administration. What matters isn't gender, but a founder's motivations and expectations.
The study, by Scott Shane, a professor of economics, and Case Western Reserve University graduate Erin Keppler, examined data from the Panel Study of Entrepreneurial Dynamics, the first national collection of information on why people started businesses. The survey tracked 685 entrepreneurs who were launching a venture and followed them for four years, compiling financial data as well as information on how founders expected their businesses to do.
When comparing the performance of a business with its founder's expectations, "there is little evidence of differences between male and female entrepreneurs on either effort or performance," says Shane. What's more, the data offered clues to why some people perceive women-owned companies as underperforming those owned by men. More women started businesses with the goal of flexibility, not, as most men did, with the goal of making a lot of money. And more women started companies in service industries where profitability and growth tend to trail those of male-dominated industries such as technology. The perception that women are less skilled reflects a lack of understanding of why many became entrepreneurs in the first place.
—By James Mehring

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