Sunday, August 23, 2015

Why Female Entrepreneurs Are Less Likely To Fail

Why female entrepreneurs are less likely to fail

By Shané Schutte
Due to their risk-averse nature, female entrepreneurs are more likely to set up a successful business, according to new research from Kleinwort Benson and YouGov.

Out of a sample of 500 business leaders, only 11 per cent of female respondents said they had failed in creating a successful firm, compared to 17 per cent of men.

Female entrepreneurs are more likely to be risk-averse and so avoid the pitfalls that can kill a young business, claimed Paul Bentley, Kleinwort Benson’s head of entrepreneurs.
He said in the report: “In our experience, female entrepreneurs tend to position themselves better to create long term value. This is beneficial in two ways. Firstly they often avoid the pitfalls that befall early stage businesses. Secondly, their businesses will have demonstrated a more consistent track record and they will be more attractive to potential acquirers.”
This fact hasn't changed since 2010, whereby data company Beauhurst found that 34 per cent of male entrepreneurs had a business go under, compared to 23 per cent of women. The company attributed the different attitudes towards risk: 50 per cent of male business owners had a risk-confident attitude to business, compared to less than a third of women. It also showed that men were more likely to simultaneously run a number of companies than their counterparts.

This difference in attitude was emphasized by a January 2015 report entitled "Women Leading The Charge Into Entrepreneurship". The report indicated that women take a different route in choosing to start a business as they often have different motivations. It claimed that a woman's approach to business is influenced by socialization from early in their lives, and so is their propensity to taking risks. 
A 2007 study from the Small Business Administration found that male owners are more likely to start a company to make money, and have higher expectations for their ventures. Women are more likely to prioritize making business and personal lives work in harmony. This tendency, the report claimed, often led to higher success rates for female entrepreneurs.

Researchers have started focusing on the relationship between testosterone and excessive risk, trying to evaluate whether groups of men spur each other toward reckless decisions.