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MY BUSINESS - Jul 26, 2018

They are all entrepreneurs but they are not all the same

Surely, there are some differences between male and female entrepreneurs. A number of small but statistically significant differences among male and female entrepreneurs were found in the types of businesses that they established, their self-reported measures of success, their risk-taking behaviour and how their business growth was funded.

Gender and the type of business conducted

According to the Carleton research, women tend to open businesses in service industries (accommodations and food service, health care and social assistance, and retail trade) while men tend to open businesses in export-oriented sectors (knowledge-based and manufacturing).2 Women also tend to focus on long-term relationship building and design their businesses to grow and adapt over time.2 In contrast, male-dominated enterprises have a propensity for rapid growth in preparation for the future sale of the business.2

These results give pause to traditional lending philosophies that value rapid growth, sale and reinvestment over long-term sustainability. It is as if traditional lending practices treat risk as an objective rather than a means to an end. Focusing on year-on-year growth, balance sheets and operating expenses would therefore seem like metrics that are more likely to favour male entrepreneurs over their female counterparts. There is a concern that businesses that focus on other quantifiable qualities such as goodwill and retained earnings – components of a business that sustain it through challenging times – might not get the attention they deserve by traditional lending practices.

Gender and the measurement of success

Male and female entrepreneurs appear to measure success differently. Men appear to measure success on their earnings alone, while women tend to consider a combination of their earnings and their ability to attend to non-work-related interests and obligations.2

Research from the BMO Wealth Report “Women in Wealth: A financial golden age has arrived”4 identified the “caregiver burden” – the responsibility for the care of children and elderly parents – as a primarily female concern.4 Interestingly, the Carleton authors cite a study that illustrates that “an increasing number of male entrepreneurs are deliberately limiting the growth of their businesses to allow themselves time to pursue interests beyond the office.”5 In fact, the BMO survey found a slight difference between the numbers of women who define business success as having more time with family and men who responded the same way.3 The same survey question found no significant difference between the genders with respect to valuing their business on economic terms.3 With women increasingly reporting themselves as being motivated by earnings6 and men seeking more balanced lives outside of work, perhaps there will be further convergence in this area over time.

Revisiting gender differences in risk-related behaviours

Earlier, it was suggested there was statistical evidence of a correlation between an entrepreneur’s motivation for opening a business and their comfort with risk-related decision making. Should one therefore assume that self-employed men and women exhibit the same risk-taking behaviour? Not exactly. The Carleton research found that while some entrepreneurs of both genders start their businesses with a measure of confidence in their ability to make riskrelated decisions, a significant number of women reported that they became more confident, less fearful of failure, and consequently found it easier to make decisions related to risk.2 A number of women entrepreneurs’ reported they are or were in a position to make risk-related decisions because they grew up in an entrepreneurial family, had a supportive family to fall back on or qualifications to take up jobs in case of business failure, or did not have a lot to lose at that point in their life.2

Men, on the other hand, see risk-taking as a means to generate sustainable income for their families.2 Perhaps the video-game makers at Atari said it best in their 1982 advertisement, using the phrase, “the best way to predict the future is to create it”.7,8 In other words, the Carleton study suggests that women prefer to make risk-related decisions necessary to advance their business interests, while men see risk-related decisions as a means to find financial security. This finding was supported by the BMO survey which found several gender-related discrepancies in the perception of business risks – the most significant of which related to men’s contention that risk is a means to generate opportunity.3

Bearing this in mind, it is interesting to note that while entrepreneurs of both genders may look upon business risks differently, none appear to embody the “cowboy” mentality that is sometimes associated with entrepreneurs. In fact, the survey conducted by BMO found tremendous consistency among entrepreneurs in their belief that business risks should be calculated, assessed, and managed.

Furthermore, in a study referenced in the Carleton research, women were found to be less likely to take on financial risks that jeopardized the business’s growth and preferred to collect information in order to make calculated business risks.9 Few would argue against informed decision-making. Perhaps this is an opportunity for male entrepreneurs to benefit from the best practices of their female counterparts.

Further Reading: Are there Gender Differences Among Entrepreneurs? – Blog Post; Report; Infographic

2 A force to reckon with: Women, entrepreneurship and risk. Becton, C. and McDonald, J. BMO Wealth Management, May 2016.

3 Survey conducted by ValidateIt™ for BMO Wealth Management from May 17–22, 2016. The online sample size was 803 Canadian business owners with 100 or less employees. Overall probability results for a sample of this size would be accurate to within +/-3.46% at the 95% confidence level.

4 Women in Wealth: A financial golden age has arrived. BMO Wealth Institute, March 2015.

5 How female entrepreneurs define success. Dr. Jeff Cornwall (blog), February 28, 2011. entrepreneurs_defin/

6 Exploring motivation and success among Canadian women entrepreneurs. Hughes, K. D. Journal of Small Business and Entrepreneurship, 2016: 19(2), 107-120.

7 Advertisement for Atari Corporation. InfoWorld, September 20, 1982: 4 (37), 68 (Google Books full view).

8 Please note that this quotation has also been attributed to a variety of historical figures, including Abraham Lincoln and Peter Drucker.

9 The psychology of entrepreneurship: A data-driven study into the motivation behind new business creation. Barclays, June 2015. Retrieved from

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