Are there any gender specific characteristics or motives that influence the success of start-ups?
Introduction
Starting up a business can be mind challenging regardless of the gender of the person who is responsible for the business startup. Businesses require great concentration to thrive and meet the expectations of the persons in their possession (Ahmad & Zabri, 2016). Although, results of the research by the IMSI research group in the United States imply that some gender based characteristics and motives can at times affect the success of any business. The characteristics and motives in question are discussed below.
Literature Review
All entrepreneurs aspire to having a good balance between their families and businesses although not all of them meet this need. For example; being a mother and possessing a business can be tiresome because in most families mothers are responsible for bringing up children (Shah & Saurabh, 2015). In cases of single mothers who aspire to become entrepreneurs, they can end up not making their goals valid simply because of the lack of enough time to balance between their families and their businesses (Stamarski & Son Hing, 2016). Despite being hard for one to manage multiple activities, it is still possible whereby a mother has to balance her time and give equal efforts to family related issues as to that spent on the business. The perception has been that it could be more effective to deal with one’s business related issues if not dealing with kids. This is an advantage to men who are in businesses and married as well simply because they can leave it to their wives to deal with family matters and spent most of the time dedicating it to business issues. This is one of the characteristics that lead to gender based issues while doing a business startup, hence making it hard for women to thrive as successful startuper (Ahmad & Zabri, 2016).
Women business startups are also associated with the fear of coping with business failure. In other words, coping with business failure can also be termed as risk taking. One of the greatest concerns of females who launch three quarters of business startups is the fear of their businesses failing. Risk taking is one of the most important aspects to consider before launching up one’s business. The CEO behind the Women Choice Award by the name Delia Passi once noticed that for one to thrive in business, they have to first fail in several attempts, and women are more afraid of such failures while considering launching their businesses (Eltinay & Masri, 2014). It is high time for women to start engaging themselves in the idea of risk taking in businesses and ensure they give equal competition to men in the same field.
In addition, women are associated with the act of defying their social expectations as there is the existing perspective that they should not be involved in business and that males are the only ones who should be involved in businesses. For example, the number of men in any seminar hall where information about business startups is being shared by those who have already succeeded in the field. The attempt to give a random count of the women and men present and an analysis of the results in most cases prove that the number of men can be three times the number of women present, according to Ahmad & Zabri (2016). In these cases, women tend to have the perception of male-centered attitude towards business (Eltinay & Masri, 2014). Such situation leads to lack competitiveness with a fewer number of females involving themselves in business. The successful women believe that nothing is impossible in business regardless of whether you are a woman or a man. This perception of defying social expectations leads to the gender biasness against women in the business field.
Research and studies by the IMSI United States research group has found out that there exists a gender gap when it comes to the success of startup business (Stamarski & Son Hing, 2016). The two genders have different motives as they engage in startup business resulting into the gap in question. Businesses that are founded by male outperform those founded by females in most performance aspects. The businesses founded by males are assumed to grow faster with regard to mist terms as they mostly produce a larger percentage of the market sales and give back more profits as compared to those that are owned by the females. Some female owned businesses tend to fail because of lack of strictness in work place (Shah & Saurabh, 2015). This rate, in turn, brings the difference between the female owned businesses and male owned businesses with the issue of male owned outshining the entities founded by women.
Women founded businesses are mostly owned by a sole proprietor. Most women start their startups alone, meaning that there is less startup capital available. Unlike men founded businesses which are mostly founded by partners, women founded businesses have relatively smaller capital base which handicaps the success of the entities. Less management skills which can be achieved by partnership business is experienced in women founded businesses (Ahmad & Zabri, 2016). The issue of skills is also contributed by the reserved nature of women. Most women do not tend to enquire which exposes the business to the risk of failure.
Despite the similarity of motives between women and men, regarding making profits, usually women are less eager for expansion compared to men. It is men’s nature to aim higher levels of performance in terms of businesses and market share (Shah & Saurabh, 2015). Besides being profit oriented, men also accord larger businesses with power. Males want to command a large market population. The motive to expand enables men founded business to achieve greater success in some cases.
The origin of the motive to start a business varies between men and women. In most cases, men’s motives are derived from employment or exposure to a similar business (Shah & Saurabh, 2015). This indicator gives men an added advantage over women as they are more equipped with management skills and experience. Most women who start businesses have no history of employment hence they lack the appropriate skill to run the businesses successfully. The small number of women who have a history of employment before starting a business do so out of necessity rather than availability of opportunities. After disruption from their employment, women find it necessary to start up a business in order to support their former lifestyle. The business ventured in may not be as productive and may offer limited opportunities for development or even success (Shah & Saurabh, 2015).
Men are not afraid of taking risks which is not the case with women. This nature of males allows them to take up almost every opportunity that comes their way. The investment level of men founded business is usually wider compared to women founded business. In this regard, men’s business stand higher chances to evolve more profits and succeed compared to their counterparts’ (Stamarski & Son Hing, 2016).
Women at most times tend to apply small startup capital which may lead to the downfall of the company. Research has showed that in most cases women do not prefer other legal forms apart from the limited company. There is a significant relationship between the legal form used and the amount of capital chosen. Limited legal form requires additional amount of capital but in return, it contributes a lot in the success of a business. It allows the entrepreneur more chance to take risky opportunities due to less fear of losing personal property in a situation of solvency. Women businesses also face low levels of technological innovations which plays a great role in the success of a business (Shah & Saurabh, 2015).
References
Ahmad, K & Zabri, S. (2016). The application of non-financial performance measurement in the success of startup firms. International Journal of Economics and Financial Issues, 6: 50-54.
Stamarski, C. & Son Hing, L (2016). Gender inequalities in the workplace: the effects of organizational structures, processes, practices, and decision makers’ sexism. Frontiers in Psychology, 6: 1400-1410.
Eltinay, N., Masri, R. (2014). Understanding impact of financial and non-financial
measurements in Sudanese banks’ performance. International Journal of Humanities and Management Sciences, 2(3): 99-104.
Shah, H. & Saurabh P. (2015). Women entrepreneurs in developing nations: Growth and replication strategies and their impact on poverty alleviation. Technology Innovation Management Review, 5(8): 34-43.
