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Five Reasons Why Women Make Better Entrepreneurs Than Men

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Countless studies of start-up businesses in developed markets come to the same conclusion: more of these enterprises are launched by men than women. That’s a great pity – not just because the statistics are an affront to equality of opportunity, though they are, but also because there’s a growing body of research that suggests women make better entrepreneurs than men.

The latest study, published today by the Centre of Entrepreneurs think tank with the support of Barclays Bank, provides yet more reason to think that if there is going to be an imbalance in the number of male and female entrepreneurs we would be better off with more women than men.

Sarah Fink, head of research at the Centre of Entrepreneurs, says that if policymakers are hoping to see more businesses stick around for the long-term, growing without unnecessary volatility and creating more jobs, their efforts should be slanted towards prioritising female entrepreneurship. “Women entrepreneurs are more likely to work towards controlled, profitable growth with relatively little interest in merely positioning themselves for lucrative exit,” she says. “They often prefer to re-invest business profits over equity investment to scale sustainably.”

John Winter, the chief executive of Barclays Bank’s corporate business, agrees with that analysis. “As women increasingly embrace entrepreneurship, they are pioneering different business cultures and models of entrepreneurial growth,” he says.

Beware generalisations, but in practice, the Centre of Entrepreneurship’s report suggests at least five reasons why women make better entrepreneurs than men:

Women are better calculated risk takers

Both men and women with track records of entrepreneurship say they are prepared to take risk according to the Centre of Entrepreneurship’s research. But women have the edge: 87% see themselves as financial risk takers, compared to 73% of men, while 80% of women say they are likely to see opportunities where others see risk, compared to 67% of men. Moreover, while these female entrepreneurs are embracing risk, they’re also more likely to be tempering their business approach with a realistic assessment of the dangers ahead – for example, four times as many women as men suggest that from a personal finance perspective, now is a bad time to take on risk.

Women are less prone to over-confidence

Just 42% of women entrepreneurs in the study said their business was currently prospering, while 62% of male leaders described their performance in these terms. This is not because the female entrepreneurs are doing less well than the men: in fact, an analysis of the businesses in the study led by male and female entrepreneurs respectively reveals that the latter are actually performing more strongly.

Women are more ambitious

More than two-thirds of women currently in C-suite level jobs say they are interested in starting their own businesses in the next three years, the Centre of Entrepreneurship report reveals, compared to less than one-third of their male counterparts. And among entrepreneurs already running their own businesses, 47% of women are keen to start another business within the next three years compared to only 18% of men.

Women are more likely to take the long-term view

The number of male and female entrepreneurs who say they are interested in growing their businesses over the next five years are almost identical, at 82% and 83% respectively. However, men and women have different views about the type of growth they should go for – the research suggests women are more likely to reinvest business profit in order to generate steady and profitable growth, while men are more likely to look for faster growth, possibly fuelled by equity investment, and a quicker exit.

Women succeed despite facing more barriers than their male counterparts

Female entrepreneurs have to work harder than the men to make a success of their businesses. Almost one in five women say they lack the technical knowledge required for their business compared to only one in 20 men. A quarter of women say they don’t have the networks necessary to build their businesses while fewer than one in 10 men say this is a problem. But these problems have not got in the way of women succeeding – in a marked contrast to normal pay structures, female entrepreneurs in the Centre for Entrepreneurship study take home twice as much pay as the men.