In mid May 2010, Sharon Hadary published a well-researched and thoughtful piece in the Wall Street Journal, “Why Are Women-Owned Firms Smaller Than Men-Owned Ones? “. In this provocative article, Ms. Hadary digs to understand the “why” behind a sobering statistic: While the number of women-owned businesses are still being created at twice the rate of men, the size of women-owned businesses (in revenues) are on average only 27% that of men-owned enterprises.
Thankfully Ms. Hadary does not fall back on easy answers but looks at a more complete set of causal factors, both external and internal to female-run firms. Externally, she still finds access to capital (or limited access to bank credit and investors), access to markets (or contracts with big partners, whether government or corporations) and access to networks (or personal connections with leaders and influencers) as key limiters to women-owned firm growth.
But as the first and most critical barrier to success, this article points to a factor that is firmly in the control of any entrepreneur – the setting of high, yet realistic, goals. Success research on small businesses has found that having goals (and plans to achieve them) are the greatest predictors of success, even over factors such as number of years in business or industry. (It is no accident that high-valued entrepreneurial programs — like SCORE — always start with a workshop on business planning.) Yet women are less likely than men to set aggressive goals for their businesses. Why?
Maybe this difference in goal setting can be traced back to the origins, or the “why” one decides to plunge into the uncertain abyss of entrepreneurship. In her article, Ms. Hadary points to research that women tend to start businesses as a way to balance work and family demands, while men in general, become entrepreneurs as a way to be the “boss” and grow their businesses as large as possible. Business planning calls for SMART (Specific, Measurable, Achievable, Relevant and Timely) goals. Yet most life-balance goals such as “being there” for kids, caring for aging parents and even community volunteering responsibilities cannot be neatly measured with SMART metrics. And then there is that troublesome problem of planning when the woman-owner’s time is messily divided between business and personal “shareholders”.
But this article does raise a very real gap that can, and should, be narrowed. Rather than citing all these factors as excuses, women-owned businesses should embrace their own brand of goal setting:
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