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

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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.

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 owner themselves, and the National Women’s Business Council (NWBC) reports that a “tiny percentage” have more than five employees. However, of that 6 million, men are more likely to have employees.

Women-owned businesses tend to be smaller overall

Women tend to use half as much capital to start their business as men ($75,000 versus $135,000). 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.

Other studies, such as that from American Progress, suggest that for women in general, and women of color in particular, the traditional workforce is limit in terms of both opportunity and creativity, forcing women who want to do something different into entrepreneurship.

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 business that is men-owned. A 2014 Bank Of America Small Business Owner survey also found that women are more likely to hire their children than men.

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. Last year, Biz2Credit found that approval rates for women-owned business loans were 29% lower than men-owned businesses. Through microloans, grant programs, and crowd sourcing, 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 health care 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.

As an employee, this means that choosing to work with a business owned by women usually means that you’re in a particular field. Conversely, if you’re working outside of these fields and searching for a women-owned company to work for, you may have to ask questions and really look.

Businesses owned by women are often also minority-owned

Between 1997 and 2013, the number of women-owned businesses in the United States grew by almost 60%, and that growth was absolutely driven by women of color. 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.

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 business sometimes contributes to that assumption. The industries in which most women-owned businesses are focused – retail, education, service, healthcare – are industries which 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 be 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 of 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.

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

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