Strategy

Women in small business

Female entrepreneurs face different challenges than their male counterparts.

Not long ago, Alyssa Richard, founder of RateHub.ca, a mortgage rate comparison website, asked one of her investors what he thought the main differences were between male and female entrepreneurs.

Richard, who started her own company in 2010, just three years after finishing her undergrad degree, and who was named one of “Toronto’s hottest young entrepreneurs” by The Globe and Mail in 2011, was just curious. She wasn’t exactly looking for pointers.

“He said, in general men are more comfortable with risk. On the other hand, women can be very organized… [So] if you can find that woman who is willing to take risks and is confident and she brings the strength of a female, it’s like finding a rare peacock.”

Richard found his answer “funny.” Others might opt for “wince-worthy” or “grating.”

But the fact remains that women are woefully underrepresented in the business-owning sphere. According to Statistics Canada, of the country’s 835,000 self-employed entrepreneurs with employees, only about 27% are women. That’s up from 11% in the mid-70s. But it doesn’t seem like much to celebrate.

It is popular to say that the percentage of female entrepreneurs is growing faster than the percentage of male entrepreneurs, says Barbara Orser, professor at the University of Ottawa’s Telfer School of Management. Her response? “Nope. Nope. Urban myth! And a very popular urban myth.”

Orser, who has spent much of her career studying the intersection between business and gender, insists that women are still “relatively more reluctant” to start small businesses. That reluctance, she says, sets in early on: “Even female undergraduate students are less likely to intend to start a business, compared with their male colleagues.”

Is that because women are more likely to assume child-rearing responsibilities? Because they take on more domestic duties? When asked, Orser bristles. “I think that’s a dated assumption. Because we’re at near parity in paid employment.” Women are entering the workplace; they just aren’t creating their own workplaces in equal numbers.

Part of this, says Orser, can be explained by priorities. Her research suggests that men and women weigh different priorities when it comes to work. They define success in different ways. A 2009 study by Orser and Dr. Lorraine Dyke, for instance, found that women were more likely to prioritize “professional autonomy” when making business decisions, compared with men, who prioritize “financial criteria.”

Orser thinks it also has to do with “how small business is personified in the market. It tends to be very masculine… Those role models are not role models that women can relate to.”

Indeed the subject of role models, and mentors, for women has been a buzz issue of late. Prominent female businesswomen like Sheryl Sandberg, COO of Facebook, have championed the cause of women mentoring women.

Another 2009 study by Orser, Joanne Leck and Allan Riding examine that issue in detail. The authors acknowledge that certain factors can deprive businesswomen of effective mentor relationships. There is a dearth of female mentors, the report stresses. And “there can be several negative outcomes associated with cross-gender mentoring.” Colleagues might assume that such a relationship has sexual overtones. And women who seek out male mentors might be labeled “overly aggressive.”

For her part, Richard says she isn’t too aware of gender differences in Toronto’s start-up scene. Sure, there are sometimes more men at business events. But she’s never had trouble “finding mentoring and business connections.”

Then again, she is a “rare peacock.”