Women-Owned Businesses: In the Pink
In a perfect world, it wouldn't matter if a business owner was male or female. But for now, the differences are both intriguing and surprising, according to the results of a 100-question survey of 1,400 family-business owners conducted by MassMutual Financial Group and Babson College.
Start with productivity. The survey found that women-owned outfits employ a median of 26 people, vs. 50 employees at male-owned concerns. Yet despite that considerable difference in payrolls, each generated about the same sales in 2002 -- an average of $27 million in revenues at women-owned businesses, vs. $30 million at male-owned ones.
When researchers controlled for the size of the business and its industry (women and men tend to own family businesses in the same fields -- manufacturing, wholesale, retail, service, and construction), women-owned firms were 1.7 times as productive as their male-owned counterparts.
"We think the reason for this is that women-owned family businesses are younger" by 10 years on average, says I. Elaine Allen, Babson's associate professor of statistics and entrepreneurship. "Therefore, they are able to change and adapt more quickly. They don't have to teach the elephant to dance."
Women-owned family businesses also tend to carry less debt than male-owned ones, notes Allen, who says this may be due either to less access to capital or an inherent fiscal conservatism. While a lower debt level protects businesses in a downturn, an unwillingness to take on debt can also prevent them from growing as quickly, she points out.
The number of women-owned outfits is growing, the survey found, now comprising 15.6% of all U.S. family businesses -- up 37% on five years ago. And that number seems destined to keep on growing, with the survey's findings noting that women are just as likely as men to take over second- and third-generation family businesses. Notes Allen: "We no longer have male primogeniture."
ALL IN THE FAMILY.
Another reason the percentage of female-owned family businesses should continue to rise: Women owners say they are more interested in keeping the business in the family. In the 20% of cases where the female owner was not the chief executive, they were far more likely than men to hire a woman as CEO. They also employ more women family members.
The study's other findings indicate that women-owned firms put more emphasis on philanthropy and community issues, and that they pay more attention to succession planning. Attrition rates among family members are 40% lower than at male-owned family firms. Female owners also tend to be more upbeat, with twice as many women as men saying that they see a positive future for their businesses.
Sums up Allen: "The emergence and growing presence of women in U.S. family-owned businesses is having an enormous favorable impact on family business -- from productivity to leadership and involvement."
By Amey Stone in New York