Why are women-owned firms smaller?

A few months ago, I read an article in the Wall Street Journal titled, “Why are women-owned firms smaller than men-owned ones?” by Sharon G Hadary.

The article made the observation that while there has been a phenomenal growth in women-owned businesses, revenues for such businesses were just 27% of comparable businesses owned by men. The author pointed out that this number was largely due to the fact that women-owned businesses remained smaller in size than those owned by men.

So why is this? The author suggested reasons may relate to goals (placing higher emphasis on a good work/life balance), access to capital (women may be more weary of taking on debt), access to markets (specifically those in male-dominated industries such as development), and finally access to networks (women may not be perceived as serious business owners among key industry and financial players—an example of discrimination that persists to some degree in both entrepreneurial and corporate worlds).

One key disturbing observation made by the author was that women networking with other women may be inadvertently holding each other back in their expectations and definitions of success.

This last point got me thinking. I’ve had tremendous success networking with and learning from women business owners. Was my network that lifted up my business also holding me back?

I began talking with other women in my network about the article and the issues it presented. In time, a round table discussion was put together to discuss how we can work together to help our businesses grow BIG. The round table was led by a well-respected and qualified business coach. I imagined a lively discussion about the motivations of women business owners and strategies for advancing our businesses to the next level.

At the meeting, our moderator did a fine job of laying out the motivations of each of the 12+ women entrepreneurs in the room. Consistent with the article, few business owners listed money first as how they measure success. Among the top reasons: work/life balance, job satisfaction, respect within the industry. That’s not to say we didn’t wish to be well paid for what we do, but rather that in terms of success, the other items held more weight.

Now, let me just say that I knew most of the women in the room. They have successful businesses. They speak confidently about their qualifications and the goods/services they provide. These are accomplished business owners.

As the meeting progressed, we addressed our goals for our businesses, then proceeded to break down reasons we may not be there yet. We listed things such as lack of time, lack of resources, fear of debt, fear of losing work/life balance…things of that nature.

Our moderator dove into each of the reasons we suggested and came to a single conclusion meant to apply to every woman in the room: (and I’m paraphrasing:) We believe we’re not good enough.


My gut wrenched as the moderator suggested this “motivational glitch” we all held in common, but I couldn’t quite put my finger on why. I thought about the article. Would men do this kind of self-examination?

Days later, the answer hit me. While well-intended, our presenter had taken a room full of 12+ accomplished women entrepreneurs and reduced us to 12+ emotionally-fraught women paralyzed with the fear that we’re not good enough.

Well, I for one am not buying it!

For example, I’m not entirely sure that the fact that women-owned businesses tend to be smaller than men-owned ones is even a problem. Instead, as the author suggested—and as was voiced by the entrepreneurs in the meeting—perhaps it really is a lifestyle choice. One that’s working.

In talking with the author of the article, Sharon Hadary, about the issue, she pointed out that women in fact are changing the face of business in a very positive way, by “integrating their home and business lives.” And while these smaller businesses may not be adding employees, they are providing substantial work for contract vendors who often collaborate with such businesses as part of a “virtual team.”

Ms. Hadary made the point that while there is a place for smaller businesses and larger businesses based on the owner’s stage in life, the real discussion should focus on laying a [practical] foundation “that will permit them to grow their businesses IF and WHEN they decide they are ready to grow.” Interestingly, she pointed to business associations, development centers and universities as resources…not self examination.

As for myself, I can speak to the fact that I am pleased with the success of my business so far, and look forward to growing it incrementally in future years. How? Not by evaluating my worth or psyching myself up to the task, but through research, solid planning, and persistence—as many successful entrepreneurs (men and women alike) have modeled on their way to fiscal success.

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One Response to “Why are women-owned firms smaller?”

  1. …accomplished entrepreneurs emotionally-fraught & paralyzed? How convenient to boil it down to a Freudian explanation.

    Size is only one aspect of growth as it is only one aspect of success. I don’t think enough variables were measured to be able to conclude much of anything.

    I’m fascinated by all the speculation though. Wild and outside, I’d say.

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