Working for Men-Owned or Women-Owned Businesses: What’s The Difference

businessman and businesswoman

Over the years, many reports and studies have looked at the differences between men and women entrepreneurs. Some studies have tried to conclude that women are somehow unsuited for the C-suite, while others have shown that men and women are equally capable of running a corporation or company.

In 2021, 49% of new businesses were founded by women, outpacing men at 42%. Women primarily sought autonomy and flexibility, whereas men were driven more by spotting opportunities. Today, however, we’re going to talk about what differences there are for employees who work for a woman-owned company, versus one owned by a man.

Fewer women-owned companies actually have employees

Overall, small businesses in the United States do not tend to have employees; of the 25 million businesses that operate here, around 6 million have one employee besides the business owners themselves, and the National Women’s Business Council (NWBC) reports that a “tiny percentage” has more than five employees. However, of that 6 million, men are more likely to have employees. While small businesses in general struggle with employee retention, studies have shown that women-owned small businesses are more likely to offer benefits like flexible work hours, which can be a significant factor in employee loyalty.

Women-owned businesses tend to be smaller overall

On average, women invest about half as much capital to launch their businesses as men, with figures at $75,000 and $135,000, respectively. Martin Zwilling of Startup Professionals has suggested that this is, in part, because men and women tend to start businesses for different reasons. Women tend to start businesses so that they can spend more time with their families or improve their work/life balance, while men tend to start businesses to gather more wealth.

Additional research, including a study by American Progress, indicates that the traditional workforce often limits opportunities and creativity for women, particularly women of color, pushing them toward entrepreneurship as an alternative.

These two points together mean that you’re less likely to work for a women-owned business overall, and if you do, it’s likely to be smaller than a comparable men-owned business. A 2014 Bank of America Small Business Owner survey also found that women are more likely to hire their children than men.

The impact of company size on employee benefits

Curious about how employee benefits differ between small, women-owned companies and larger, men-owned corporations? The company’s size can dramatically influence the kinds of perks you’ll experience, so let’s delve into the details.

Flexible Work Environments in Small Companies

Small businesses led by women frequently emphasize a healthy work-life balance, offering advantages such as adjustable work schedules and the option to work remotely. A study from the National Women’s Business Council shows that such companies are more apt to prioritize employee well-being, a key element in retaining a skilled workforce.

In my experience, women-owned businesses frequently excel in offering workplace flexibility and autonomy to their employees. This goes beyond just flexible work hours or the option to work remotely. It’s about a culture that empowers employees to make decisions and manage their work in a way that best suits their personal and professional lives.

A study by the Women’s Business Enterprise National Council (WBENC) found that such flexibility not only enhances employee satisfaction but also boosts productivity. For employees, this means a work environment that respects and accommodates individual needs, leading to a healthier work-life balance.

Traditional and Comprehensive Benefits

In contrast, larger enterprises owned by men often boast the financial capability to provide a wider range of traditional benefits, including 401(k) matches, exhaustive healthcare packages, and even stock options. According to a report by the U.S. Small Business Administration, these corporations typically follow a more systematic approach to employee benefits, aligning them with overarching business objectives.

Customized Care and Extensive Benefits

This is where the topic gains an extra layer of complexity. While small, female-owned companies may not offer an extensive catalog of benefits like their larger, male counterparts, they frequently create a more customized and supportive work atmosphere. This could encompass mental health days, team-bonding retreats, or stipends for educational advancement.

Women-owned businesses tend to have less external capital

Especially during the years of the Great Recession, from 2008 to 2010, women-led and –-owned businesses struggled to gather sufficient funding through traditional bank loans. Biz2Credit found that approval rates for women-owned business loans were 29% lower than for men-owned businesses. In contrast to their male counterparts, women business owners often face unique challenges in securing venture capital, which has led to a rise in specialized funding opportunities aimed exclusively at women-led startups. Through microloans, grant programs, and crowdsourcing, American Progress reports that women-led businesses have continued to thrive, though women are also more likely to reach for credit cards and personal debt than men-owned businesses.

For the employee, this means that your job is less likely to depend on what an investor wants and more likely to depend on what your boss wants since a women-owned business is less likely to have external investors to answer to.

Women-owned businesses often concentrate on service and retail industries

In fact, in 2010, 61% of healthcare and education businesses, 41% of retail and trade businesses, and 49% of “other” service businesses were owned by women. Although there certainly are tech start-ups that are women-owned, this industry continues to be dominated by businesses that are owned by men.

For employees, this implies that opting to work for a women-owned business often correlates with specific industries. Conversely, if you’re working outside these fields and searching for a women-owned company to work for, you may have to ask questions and really look.

Career growth

Searching for a job that provides more than just a paycheck? You’ve likely heard about the supportive environments and flexible work policies in women-owned businesses. But what about career advancement? Is it a haven of endless possibilities or are there obstacles you need to consider? Let’s get straight to it. Women-owned businesses often function on tighter budgets and predominantly in industries like healthcare and retail. These sectors may not offer a fast-track for career growth. Yet, it’s not as straightforward as it seems.

The opportunities and challenges

Smaller teams in these businesses often mean you’re more than just a number—you’re an integral part of the company. Close proximity to leadership can lead to mentorship experiences that are both emotionally enriching and intellectually rewarding. Picture learning from someone who not only knows your name but also helps guide your career growth.

On the flip side, constrained budgets often result in limited resources for professional development programs or resume-enhancing projects. You might need to take the initiative by pursuing online courses or seeking additional responsibilities to bridge the gap.

What’s the next move? If you’re considering a role in a women-owned business, conduct thorough research. Investigate the company’s growth trajectory, industries of operation, and previous employees’ career paths. During interviews, be upfront about asking for opportunities for professional development. Once you’re in, actively seek mentorship, propose new initiatives, and make it a point to network both inside and outside the company.

Businesses owned by women are often also minority-owned

Between 1997 and 2013, the number of female-led companies in the United States grew by almost 60%, and women of color absolutely drove growth. Despite men owning businesses at a rate three times higher than women, the landscape of female entrepreneurship is on the rise. Because of the intersections of privilege (or lack thereof), these entrepreneurs may struggle more than white women to get adequate access to mentorship, capital funding, or business resources.

The role of mentorship in women-owned businesses

Shifting our focus to an often-underestimated aspect of women-owned businesses—mentorship—raises an intriguing question: What makes mentorship so crucial? The answer is multifaceted and has far-reaching implications for your career.

Women business leaders tend to offer a unique mixture of guidance and empathy in the realm of mentorship. This stands in contrast to conventional corporate environments where mentorship might feel formulaic or insincere. And this isn’t mere hearsay; research from Harvard Business Review substantiates that women in leadership roles often possess a higher level of emotional intelligence, an essential component for impactful mentorship. When comparing the leadership styles of women and men in the business world, it’s evident that women often adopt a more participative approach, encouraging team collaboration and open communication.

What do you stand to gain? First, mentorship provides you with invaluable experience and insights that can accelerate your career progress. Second, the benefits often extend to aspects like work-life balance and emotional well-being, consistent with the more holistic view that many women-led businesses advocate.

Notably, this mentorship approach isn’t limited to individual career trajectories; its influence permeates entire industries. For example, female entrepreneurs in the tech sector are making strides in mentoring young women in coding, thereby gradually altering the male-skewed dynamics of the industry

Here’s the clincher: Mentorship in women-owned businesses isn’t merely an added bonus—it’s a transformative force. Offering a comprehensive, emotionally intelligent roadmap for professional advancement, this type of mentorship could be your gateway to a career that’s not only successful but also deeply fulfilling.

Reflecting on the broader impact of women-owned businesses, it’s important to highlight their often strong commitment to sustainability and social responsibility. In my experience, these businesses tend to place a higher emphasis on ethical practices and community involvement. This is not just anecdotal; research from the Global Entrepreneurship Monitor (GEM) supports this observation, indicating that women entrepreneurs are more likely to engage in social entrepreneurship.

What does this all mean for the potential employee?

While no study has ever conclusively shown that women entrepreneurs are somehow less capable than men, the industries in which many women choose to start their businesses sometimes contribute to that assumption. The industries in which most women-owned businesses are focused – retail, education, service, healthcare – are industries that tend to pay lower wages overall, and where some workers struggle to have their contributions seen as valuable.

Because of this, businesses owned by women tend to be newer and less focused on gathering wealth, which means that they’re less likely to get credit when they need it.

As an employee, if working for a strong, powerful woman entrepreneur is important to you, you will need to research what companies in your industry are woman-owned, especially outside the specific fields mentioned above. A woman-owned company may be smaller, less likely to be team-owned, and be more focused on long-term growth over short-term profits. Interestingly, women-owned companies often adopt a more holistic approach to employee well-being, focusing not just on work performance but also on work-life balance and mental health.

Have you worked for a woman-owned business? What was your experience in comparison to businesses owned by men?

Power structures in gender-specific businesses

Ever considered how a business owner’s gender could shape the internal dynamics of a company? This question, often sidestepped, carries real consequences for employees. In businesses run by men, there’s typically a vertical hierarchy with clearly defined roles and a straightforward chain of command. But what unfolds in a business led by a woman?

The feminine approach to leadership

Women-led businesses frequently adopt a more flattened organizational structure focused on teamwork and shared decision-making. Employees here are nudged to be multi-faceted, dissolving the traditional boundaries between management and staff. This is more than just an appealing idea; research in the Journal of Business Ethics indicates that such an approach can elevate job satisfaction and keep employees around longer.

What this mean for your role

For you as an employee, the impact is tangible. In a business owned by a man, your job scope is likely to be more focused, confined to a distinct set of tasks. In a woman-led venture, you’ll likely find yourself juggling a wider array of responsibilities, enriching your experience but also requiring more versatility from you. The more flexible structure in businesses led by women allows for greater creative freedom, yet it can sometimes blur role definitions. Conversely, the well-defined hierarchy in businesses owned by men offers clear roles but might limit innovative thinking. Considering these aspects is key when planning your career trajectory.

The gender wage gap in women-owned businesses

While you may assume that businesses led by women would be at the forefront of pay equality, the facts reveal a more complex picture. Research from the American Association of University Women (AAUW) shows that women working in such businesses make 80 cents to every dollar earned by men. Interestingly, this is only marginally better than the 78 cents to the dollar in businesses owned by men. What’s behind this gap? One factor may lie in the industries that women commonly enter—fields like healthcare and education, where salary frameworks are often inflexible.

But the plot thickens. It’s not just about gender; the wage disparity in female-owned businesses is also influenced by operational decisions. According to the National Women’s Business Council (NWBC), many women entrepreneurs focus on factors like employee well-being and work-life balance rather than solely aiming for rapid business growth. This nuanced perspective can result in lower wages across the board but tends to foster a happier workforce.

So, what should you, as a job seeker, take away from this? If pay equity is a deal-breaker for you, closely examine the wage structures of both female and male-owned enterprises in your chosen field. However, don’t overlook the other advantages that women-led businesses might offer, such as a supportive work culture or flexible work hours, which could offset the salary disparity.

Ultimately, your career fulfillment isn’t solely dictated by your paycheck; it’s a blend of multiple factors that contribute to your overall job satisfaction. The wage structures in both male and female-owned companies can be influenced by various factors, including industry norms, company size, and the owner’s approach to business growth.

Did You Know?

  • A study by the Kauffman Foundation revealed that women entrepreneurs are more likely to bootstrap their businesses, relying less on external funding. This financial independence often translates into a more stable work environment, as the company is less susceptible to investor whims.
  • According to the U.S. Census Bureau, men-owned firms are more likely to operate in the construction and manufacturing sectors. Employees in these industries often find themselves in a more rigid work environment, with less room for flexibility but potentially higher wages.
  • Research from the National Bureau of Economic Research indicates that women-owned businesses are more likely to adopt environmentally sustainable practices. For employees passionate about sustainability, this could be a significant factor in job satisfaction.
  • A report by the Small Business Administration found that men-owned businesses are more likely to engage in international trade. Employees in such firms often have opportunities for global networking but may also face the challenges of navigating complex international regulations.
  • The Harvard Business Review has reported that women entrepreneurs are more likely to reinvest business profits into community and social causes. This philanthropic approach can create a sense of purpose and fulfillment among employees, beyond just the financial bottom line.


How Do Leadership Styles Vary Between Women-Owned and Men-Owned Businesses?
Women-led enterprises often prioritize a collaborative leadership model, emphasizing the importance of teamwork and transparent communication. This stands in contrast to the more authoritarian, top-down leadership frequently observed in businesses owned by men.

What Specific Challenges Might Employees Encounter in Women-Owned Businesses?
In women-owned firms, employees might find fewer resources allocated for professional development due to budget constraints. This situation calls for an active stance on career advancement, such as enrolling in online courses or taking on new roles and tasks.

How Do Women-Owned Businesses Address Employee Well-Being?
Enterprises led by women tend to take a comprehensive view of employee well-being, spotlighting not just traditional benefits like healthcare and retirement packages, but also the importance of work-life equilibrium and mental wellness.

Are There Sector-Specific Trends in Women-Owned Enterprises?
Certainly, businesses owned by women are most commonly situated in the healthcare, education, and retail industries. Those interested in joining a women-owned enterprise but hailing from other sectors should consider specialized research to locate suitable opportunities.

How Does Pay Equality Fare in Women-Owned Versus Men-Owned Businesses?
The pay gap is somewhat less pronounced in women-owned businesses, but it still exists. In these enterprises, women earn 80 cents for every dollar made by men, a slight improvement from the 78 cents seen in businesses owned by men.


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