Women make up nearly half of the U.S. workforce. They are majority owners of 37% of all privately owned businesses in the United States, and yet as many as 50% of women-owned small businesses fail to continue at or before five years in operation. Small businesses owned by women are more likely to cease operation 11% more times than businesses owned by men.
A 2012 study revealed a staggering increase in the number of female-owned businesses in the early part of the 21st century, from 5.4 million to 10.4 million. The U.S. Census Bureau (2016) report an employment increase of more than 8.4 million jobs created by women-owned businesses in 2012 while generating receipts of $357.9 billion.
Still, even compared to women's higher participation in entrepreneurship in the U.S., a 50% failure rate is quite high. Despite the popularity of research on female entrepreneurship, the rise of women-owned businesses globally, and the notion that investment in women is worthwhile, women remain underrepresented in entrepreneurial ventures. Because of this disparity, revenues of small businesses owned by women continue to lag behind small businesses owned by men, despite dramatic increases in the numbers of small businesses launched by women.
So what is really going on with this phenomenon? Some studies suggested women lack the skills needed to expand their business knowledge, lack access to financial resources, and knowledge to implement strategies to enhance their products and services. Furthermore, they maintained that is why female entrepreneurs continue to trail behind their male counterparts.
In this study, I set out to empirically examine what strategies female small business owners use to succeed beyond 5 years. I narrowed the study down to interviewing and collecting data from five female small business owners from Bainbridge Island, Washington State who have succeeded in conducting their business longer than 5 years. I carried out a detailed, in-depth data collection which involves conducting semistructured face-to-face interviews, websites, company documents, and archival records. Transcript review of interview response data was used to strengthen the credibility of the interview data.
Identifying the specific problem allowed for me to explore the strategies female small business owners used to stay in business beyond 5 years. Here's how - In my research study, I highlighted the contextual understanding that participants of my study constructed their own meaning of events rather than seeking to discover an absolute truth. The study's context here is operating a successful business for more than 5 years on Bainbridge Island, Washington.
Reviewing the staggering statistics from the study of the rate of failure among small businesses owned by women compared to businesses owned by men, one can easily predict that my analysis would detect evidence that in general, women take on small business initiatives without proper training, which often leads to premature business failure. Consequently, the expected evidence is clear that the specific issue here is some female small business owners lack the strategies to overcome constraints that prevent them from succeeding in business past the 5-year mark.
A 2012 study revealed a staggering increase in the number of female-owned businesses in the early part of the 21st century, from 5.4 million to 10.4 million. The U.S. Census Bureau (2016) report an employment increase of more than 8.4 million jobs created by women-owned businesses in 2012 while generating receipts of $357.9 billion.
Still, even compared to women's higher participation in entrepreneurship in the U.S., a 50% failure rate is quite high. Despite the popularity of research on female entrepreneurship, the rise of women-owned businesses globally, and the notion that investment in women is worthwhile, women remain underrepresented in entrepreneurial ventures. Because of this disparity, revenues of small businesses owned by women continue to lag behind small businesses owned by men, despite dramatic increases in the numbers of small businesses launched by women.
So what is really going on with this phenomenon? Some studies suggested women lack the skills needed to expand their business knowledge, lack access to financial resources, and knowledge to implement strategies to enhance their products and services. Furthermore, they maintained that is why female entrepreneurs continue to trail behind their male counterparts.
In this study, I set out to empirically examine what strategies female small business owners use to succeed beyond 5 years. I narrowed the study down to interviewing and collecting data from five female small business owners from Bainbridge Island, Washington State who have succeeded in conducting their business longer than 5 years. I carried out a detailed, in-depth data collection which involves conducting semistructured face-to-face interviews, websites, company documents, and archival records. Transcript review of interview response data was used to strengthen the credibility of the interview data.
Identifying the specific problem allowed for me to explore the strategies female small business owners used to stay in business beyond 5 years. Here's how - In my research study, I highlighted the contextual understanding that participants of my study constructed their own meaning of events rather than seeking to discover an absolute truth. The study's context here is operating a successful business for more than 5 years on Bainbridge Island, Washington.
Reviewing the staggering statistics from the study of the rate of failure among small businesses owned by women compared to businesses owned by men, one can easily predict that my analysis would detect evidence that in general, women take on small business initiatives without proper training, which often leads to premature business failure. Consequently, the expected evidence is clear that the specific issue here is some female small business owners lack the strategies to overcome constraints that prevent them from succeeding in business past the 5-year mark.
The five participants who took part in this study used their knowledge and skills to expand and grow their business. They understood the link between knowledge constraints and difficulties in strengthening business performance and maintaining profitability. Moreover, they also understood the importance of using strategies to overcome constraints that could prevent them from succeeding in business beyond 5 years.
The findings from my research reveal three main strategies that the female small business owners used to succeed in business past the 5-year mark:- Customer and employee relations
- Leadership
- Strategic management
All participants in my study revealed customer and employee relations strategy as the first emerging strategy for being in business for more than 5 years. Each participant agreed that focusing on customer and employee relations is important because it contributes to profitability and success. Creating a positive customer experience at the point of sale and post-sale is also regarded as important by the business owners because this strategy allows the customers to return. The owners also acknowledged and recognize the importance of good owner-employee relations, and noted that a good leadership role for a successful business requires good strategic planning that aims to accomplish the vision of the business.
Besides having good owner-employee relations, the 5 participants also placed emphasis on recognizing and acknowledging the contributions made by their employees to keep them motivated and engaged and make sure an encouraging and innovative organizational climate exists. Additionally, the owners also agree that fostering a culture of open communication and trust is crucial because it sets an atmosphere of open and honest communication in a workplace. Each business owners used strategies to lead and focus on process improvements to meet set goals, constant management review of the internal and external constraints of their business, and the course of action to mitigate constraints.
The finding from this study led to the following recommendations:
- Implement a strong customer focus strategy
- Encourage creativity, innovation, continual growth and recognize employee contributions
- Build a trusting atmosphere in the workplace for open communication
- Be strategic toward the business vision and mitigate all business constraints by implementing strategies with a realistic course of action.
The findings from this study may motivate entrepreneurs to enhance their leadership skills, increase capactiy to expand their small businesses, start a new business, and explore entrepreneurial options. The social implications potential to serve as a guide that encourages female entrepreneurs to expand their professional practices and to adopt new business strategies to make better strategic decisions.