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Barriers To Women Achieving Their Entrepreneurial Potential: Women and Risk
Barriers To Women Achieving Their Entrepreneurial Potential: Women and Risk
IJEBR
11,2 Barriers to women achieving their
entrepreneurial potential
Women and risk
144
Clare Brindley
Department of Business and Management, MMU Cheshire, Manchester
Metropolitan University, Crewe, UK
Abstract
Purpose – This paper provides a comprehensive summary of the academic literature with regard to
risk and its role in the entrepreneurial experience of women. Entrepreneurial risk has an
under-developed conceptual basis and distilling gender-specific aspects is difficult. Various academic
disciplines have contributed to the topic of risk, e.g. economics, and often decision making is used to
contextualise the topic. Though the literature does not always prove an association between the
different facets of risk and entrepreneurship, there is general agreement that a number of factors, e.g.
personal, political and social inter-relate to influence risk and subsequent behaviour.
Design/methodology/approach – Uses a desk-based approach to data collection. An overview of
the main issues concerning risk and entrepreneurship is given to contexualise the gender aspects to be
discussed, drawing on the extant literature.
Findings – The paper posits that an understanding of the gender aspects of risk is required if policy
measures are to be constructive and help women overcome barriers and achieve their entrepreneurial
potential. The conclusions drawn from the literature provide the foundations for a discussion of the
likely policy measures that are required to encourage women entrepreneurs.
Research limitations/implications – A summary is provided of the research and information
gaps that remain in terms of women entrepreneurship and risk with the aim of encouraging further
research in the area.
Originality/value – Provides a comprehensive summary of the literature with regard to risk and the
entrepreneurial experience of women, and discusses the likely policy measures required to encourage
women entrepreneurs.
Keywords Women, Entrepreneurialism, Risk management, Sex and gender issues
Paper type Literature review
Introduction
The aim of the paper is to explore the barriers to women achieving their full potential
in the entrepreneurial sector and the extent to which these barriers are from structural
sources or are the result of particular personality traits or perceptions. The research is
exploratory in nature and has used a desk-based approach to data collection. Initially
an overview of the main issues concerning risk and entrepreneurship is given to
contextualise the gender aspects that are then discussed. The paper provides directions
for further research by identifying the research and information gaps and provides
International Journal of
Entrepreneurial Behaviour & suggestions for policy.
Research One might speculate that gender-related differences are not significant within the
Vol. 11 No. 2, 2005
pp. 144-161 entrepreneurial role in the SME sector and the problems encountered are not
q Emerald Group Publishing Limited
1355-2554
gender-specific but rather are related to the risks associated with new business
DOI 10.1108/13552550510590554 development and growth. Previous research studies have evaluated the proposition that
gender-based experiences within entrepreneurship generate differences in the Women and risk
perceptiveness of uncertainty and risks and consequently differences in the
preparedness to undertake risky decisions. An alternative proposition suggests that
whilst the entrepreneur may enjoy degrees of freedom in decision making within their
organisation a number of contextual factors, both internal and external, may impose
gender-related barriers and constraints to the effectiveness of this decision-making ability.
145
Overview of the research literature
The growth in female entrepreneurship literature is evidenced by the identification by
Carter et al. (2001) of over 400 academic references on the subject. Carter et al. (2001,
p. 22) therefore argue that rather than their being a dearth of literature the problem “is
a clear lack of cumulative knowledge and a failure to date to adequately conceptualise
and build explanatory theories.” This problem is compounded if one investigates a
topic that similarly has an underdeveloped conceptualisation – entrepreneurial risk.
Yet risk theories have the potential to embrace several of the main themes categorised
by Carter et al. (2001) such as motivations, start-up patterns and the management,
performance and growth of SMEs. What is more difficult to distil is the gender specific
aspects of entrepreneurial risk.
By also contextualising the study in the area of risk perception, propensity and
preparedness an attempt can be made to identify and isolate entrepreneurial risk and
compare it to actual behaviour. For example, is it risk that is channelling individuals in
particular directions or behaviours? It is recognised that for each individual, risk
factors and the commercial opportunities they present will be contingent on the other
factors and the general context within which the individual operates. The issue may
not be that there are differences in risk propensity between individuals but the context
of the individual decision to become an entrepreneur is contingent on other factors.
Risk theories
In the 1920s risk became popular in the economics field (Dowling and Staelin, 1994).
Subsequent definitions of risk have reflected the academic disciplines they have
emerged from. Thus, the management, environmental, insurance and psychology
literature have each focused on a particular aspect of risk but all have tended to
contextualise their definition of risk within the area of decision making. Commonalities
in these paradigms relate to their definition of risk, which relate to the issues of
unpredictability, decision making and potential loss. While technically, risk may be
defined as the probability of incurring a loss (Knight, 1921) in reality this is a
somewhat imbalanced definition given that most risky decisions in business are taken
on the basis of generating a potential gain (Blume, 1971), whilst recognising that this
may not be certain. Few if any business or investment decisions would be undertaken
solely to avoid losses.
The analysis of decision-making behaviour may be divided into three elements: risk
perception, risk propensity and preparedness to take risks. Sitkin and Weingart (1995)
define risk perception as a subjective interpretation of expected loss. This perception is
affected by the individual’s view of the uncertainty of the decision and the consequence of
the decision (Cunningham, 1967). This subjectivity or uniqueness is because “the internal
interpretation of external events and circumstances are the key to risk perception, as each
organisation or decision maker may view the same set of events and circumstances with
IJEBR different eyes, resulting in different perceptions” (Ritchie and Brindley, 2001, p. 31).
11,2 Perceptions may alter as a result of internal and external factors. The approach to risk
may be found on a continuum from being a risk seeker to a risk averter.
The issues of perception and propensity seem then to impact on an individual’s
preparedness to take risks. An individual’s risk preparedness may depend either on the
uncertainty of outcomes because of imperfect knowledge or on the potential scale of
146 losses or gains. Osborne (1995, p. 6) describes successful entrepreneurs as “adept at
calibrating the level of risk that matches potential reward and their capacity to manage
uncertainty.” The implication of the preparedness to take risks is highlighted by van
Praag and Cramer (2001, p. 45) who argued that whether one becomes an entrepreneur
depends on associated utilities which depend on “ability and on individual risk
attitude, since entrepreneurship is a risky business.”
Others such as Sparrow (1999) have adopted an exogenous perspective with
owner-managers categorising risk under five headings: business environment, the
particular competitive positioning of the business, business processes, events and
liabilities. Therefore, the importance of risk in an entrepreneurial context has both an
organisational and an individual facet. From an organisational perspective, Sparrow
(1999, p. 122) posits that “[S]mall firms have faced an explosion in business risks.”
Hence, for Sparrow (1999, p. 123) these small firms must be conversant with the
process of risk management and “the interrelationship between the roles of risk
avoidance, retention and transfer”.
There appears to be some consensus that an appreciation or knowledge of risk is
warranted in order that policy makers and indeed budding entrepreneurs themselves
can make objective decisions about the enterprise (see Busenitz, 1999; Stewart et al.,
1999; Forlani and Mullins, 2000). The literature appears to suggest that there are three
sets of factors that are impacting upon entrepreneurial risk: the decision situation
context, such as beginning a business during a recession, the personality traits of the
individual, where the individual lies on the continuum range of risk seeking to risk
averse and the personal context of the individual including, experience, dependents,
income, etc.
Entrepreneurial risk
Busenitz’s (1999, p. 325) premise is that “the dominant theme running throughout the
entrepreneurship literature is risk and how entrepreneurs are predisposed towards
risky alternatives or how they should manage risk.” van Praag and Cramer (2001) argue
that entrepreneurs are historically seen as risk takers, as shown in the works of, Knight
(1921), Say (1803/1971) etc. Similarly, McCarthy (2000, p. 563) argues that “the risk
construct dominates the literature on entrepreneurship and the ability to bear risk has
been identified as the primary challenge facing entrepreneurs (Knight, 1921).” Several
authors give support for this viewpoint including: Kent et al. (1982), McClelland (1987),
Koh (1996), Bygrave (1989), Palmer (1971), Sarachek (1978) and Ho and Koh (1992).
The ability to take risks as being an inherent attribute of the entrepreneurial
venture or personality is summed up by Klein (1977) who stated that “. . . if an
entrepreneur is to profit from an unexploited potential, he must almost inevitably deal
with a greater degree of uncertainty” (Klein, 1977, p. 36 cited in Landrum, 1991).
Support for this theory is evidenced in the work of Viscott (1979) and Landrum (1991).
For Thompson (1999, p. 289) entrepreneurs “through insight and flexibility they
attempt to manage risk rather than become unnecessarily exposed.” It is therefore Women and risk
predictable that entrepreneurs are risk takers (Cox and Jennings, 1995).
Others such as Mitchell (1995) have concentrated on the activity as the basis for the
definition, e.g. entrepreneurs being defined as individuals who have created a new
business venture. Such studies may give the impression that there is a common
definition but other research suggests that there may be differences in situational or
individual circumstances that impact upon entrepreneurial behaviour. This 147
definitional dichotomy between entrepreneurs and owner-managers often obscures
rather than illuminates research being undertaken in entrepreneurship. However, it is
not in the remit of this paper to revisit these definitional tensions.
A semantic divergence is seen in the work of Kets de Vries (1977, p. 38) who argued
that: “the entrepreneur can be considered more a creator of risk than a taker of it.
However, although the entrepreneur does not necessarily bear the financial risk of an
operation, he is exposed to a considerable degree of social and psychological risks”.
According to Liles (1974) entrepreneurs have to cope with four types of risk: financial,
career, family/social and psychological. Whatever, the source of the risk, Jover’s (1992)
premise is that the number of business failures that occur illustrate the considerable
risk inherent in business start-up.
Sources of risk
If one takes the view that entrepreneurship is a risky activity (Say, 1803; Knight, 1921;
Busenitz, 1999; McCarthy, 2000 and van Praag and Cramer, 2001) the next question
that arises is what is the source of the risk? There appears to be no consensus on where
the seeds of risk are located. The essence of the problem is the range of variables at the
macro, micro and individual levels that are potential influencers, as well as the need to
recognise the process dimensions of entrepreneurship. The entrepreneurial process Women and risk
takes place against a backdrop of policies, structures and frameworks which may
facilitate or inhibit entrepreneurship, e.g. the contextual setting will differ in terms of
previous economic development, regional policies and local support mechanisms. The
individual contextual factors include: family history and tradition of entrepreneurship,
cultural influences relating to family and friends, family commitments and
opportunities and educational opportunities. The individual characteristics 149
influencing the propensity of the individual to engage and develop a career in
entrepreneurship are the personal traits and characteristics such as attitudes to
self-employment, risk-taking behaviour, age, self-confidence and gender. These may be
influenced by the individual contextual factors detailed earlier. Entrepreneurial
Processes would be contingent on the three other sets of elements. For example, the
individual who originates from a background in which there is a strong tradition of
entrepreneurship and family support may inherit the business or a part of an existing
family business automatically. While another individual may need to undertake more
of the initial stages of setting up the business, including determining the opportunity,
persuading oneself and others about the viability, raising risk capital.
It may be suggested in SMEs, where there is a tendency for less division of labour
along functional lines that the link between the organisational and individual context is
more pronounced. The literature in the risk management field (e.g. Ritchie and
Marshall, 1993) indicates that the primary sources of risk to the business organisation
may be categorised into exogenous (e.g. technology developments, changing consumer
tastes) and endogenous (e.g. quality of internal financial control systems, effective
management structures). The capability of the SME internal decision making to
manage and respond effectively to the information and change signals received will be
determined by the endogenous factors. MacCrimmon and Wehrung (1986) established
that the preparedness of the decision-making unit to take risks may often be
determined by the organisation’s financial position, as a firm being prepared to take
greater risks when facing threats to its survival. These findings all support and are
compatible with the classification of strategic risks derived by Ritchie and Marshall
(1993). Indeed, the view that risk-taking may be less a factor of the individual
personality traits and more a factor of the decision situation was supported by the
research of Slovic (1972).
However, this view is contradicted by Sparrow (1999, p. 123) who argued that
“[S]ignificant differences have been identified between the risk conceptions and
practices of businesses and individuals.” These differences may for example be due to
ethnic, gender, class or age differences. Sparrow (1999, p. 123) acknowledges the
studies that have been undertaken but concluded “there are no studies of the holistic
manner in which small firms’ owner-managers construe and manage risk.” The lack of
a holistic paradigm means that components or facets of risk within the SME context,
e.g. “risk propensity” and “risk perception”, need to be the starting point of any debate
on risk sources and its management.
Key determinants
Social factors
Slovic (2000) concluded that sociopolitical factors could be key determinants of gender
differences in risk perception. He also argues that the differences in risk perception
could be linked to issues of power and influence or rather women’s lack of access to
them. Slovic (2000, p. 402) argues that “differences in perceptions and attitudes point
towards the role of power, status, alienation, trust, perceived government
responsiveness and other sociopolitical factors in determining perception and
acceptance of risk.” Similarly, Brush (1998, p. 160) concluded that in all OECD
countries “women encounter social structures in work, family and social life that
influence development of human and social capital, different from their male
counterparts. This argument is based on the premise that the entrepreneur starts with
a set of endowments both “human and social capital” (Brush, 1998, p. 157).
The influence of differences in these “endowments” (Brush, 1998) is explored by a
number of authors. Ljunggren and Kolvereid (1996) found there was no gender
difference in regard to complying with social pressure concerning business start-up but
women perceived stronger social support at the start-up phase. Ljunggren and
Kolvereid (1996) believe that this may be due to women spending more time building
support for their idea and being reluctant to start before having social support or
perhaps it is because it is the type of business that requires more support.
Brindley and Ritchie (1999) also found that choice of business has been based on Women and risk
their previous work experience, which may indeed help to minimise the risk of
venturing into completely uncharted territory with a new business. Furthermore,
during the female entrepreneurs’ start-up phase the main source of support and
assistance came from family and friends, i.e. trusted sources of help that the women
had previously experienced. It would therefore appear that by choosing a familiar
business activity and by relying on a network of family and friends perhaps women 151
are sub-consciously minimising the risk of the new business venture.
Financial factors
A more traditional view of capital as financial capital is included as a risk construct in a
number of studies. Buttner and Rosen (1988) found that women were perceived by bank
workers as less entrepreneurial than men and were evaluated lower on risk-taking
propensity. In Sexton and Bowman-Upton’s (1990) paper female entrepreneurs scored
significantly lower than male entrepreneurs on their risk-taking scale but were still
higher than the risk-taking level recorded within the general public. “Although the risk
taking scale was designed to measure four facets of risk (monetary, physical, social and
ethical), it correlates with monetary risk” (Jackson et al., 1972 cited in Sexton and
Bowman-Upton, 1990, p. 34). Sexton and Bowman-Upton (1990, p. 34) therefore conclude
that female entrepreneurs “are less willing to get involved in situations with uncertain
outcomes where financial gain is involved.”
Ljunggren and Kolvereid (1996), who as well as exploring motivations to start up a
business, also investigated the respondents’ experiences concerning profit and risk. In
their findings, Ljunggren and Kolvereid (1996) found that women stressed autonomy
reasons for starting a business more than men did but no gender differences were
found in regard to challenge, risk or profitability. It could be suggested that as the
study viewed risk as a financial construct there may have been different risks for the
women, e.g. social risks that are ameliorated during the screening process. Jones’ (2000,
p. 212) methodology also included a financial category “to capture financial responses
such as risk and capital concerns associated with self employment.” Jones’ (2000, p. 213)
findings revealed that Brazilian male and female entrepreneurs has similar
dispositions and did not differ in their “business opportunity wants” and posits that
cultural differences may over-ride biological sex conditioning.
Buttner’s (1999) paper on business initiation fails to mention risk but suggests that
there may be gender differences in how businesses are initiated which may impact
upon their success. One of the key differences appears to relate to access to capital.
Buttner (1999) argues that starting with a smaller capital base may disadvantage
women SME owners, as a lack of working capital is one of the biggest problems for
start-ups. Indeed, this poorer capital base may be reflected in survival rates and
subsequent growth opportunities. Jones (2000) identified that the most distinguishing
concerns between genders were centred on enterprise location and growth
opportunities. It could be argued that these categories in themselves may still be
viewed as financial measures and what they perhaps more carefully reveal is the
differences in the sources or types of risk between men and women.
Growth imperatives
Cliff (1998, p. 525) cites authors who have shown that “small business performance is
influenced by the motivations, aspirations, and intentions of entrepreneurs.” She
IJEBR identifies two contrasting viewpoints. First, Sexton (1989b) who found that there are no
11,2 psychological reasons that predispose women to keep their enterprises small and
second, social feminist theories which offer socio-cultural reasons for gender
differences. Cliff (1998, p. 526) argues that “[W]omen who lack relevant experience may
question their ability to manage a quickly growing enterprise and may therefore
purposely limit the expansion of their firms.” Black (1989 cited in Cliff, 1998) believed
152 that due to socialisation processes, women have different ways of thinking, different
values, etc. which Cliff (1998, p. 527) argues is “a compelling argument for anticipating
gender differences in growth intentions.”
Growth is after all a risk. A risk which may be financial or social and may come
from exogenous or endogenous sources. For example, changes in the marketing
environment may require growth to maintain a SME’s market position. Cliff (1998)
utilises the work of Goffee and Scase (1985, p. 70) who identified that women regard
growth as “very risky” because it would deter them from achieving their goal of
developing an “employer-employee relationship based upon trust and mutual respect.”
Cliff (1998, p. 531) pronounced that “differences in the growth intentions of male and
female entrepreneurs are not only surprising but also requires an explanation.” Cliff’s
(1998) findings showed that 13 per cent of her mixed gender sample believed external
factors, e.g. economic conditions, were the reason for their lack of growth. None of the
women but a third of the men used this reason, which was a significant gender
difference and Cliff (1998) believes it shows entrepreneurs wanted to grow but market
conditions prevented this. She concluded that there are not any significant differences
in whether men and women wanted to expand their firms but there were significant
differences in the way they wanted to grow. “Female business owners appear to be
more careful and conservative, purposely striving for a controlled and manageable rate
of growth” (Cliff, 1998, p. 535).
Cliff (1998, p. 535) goes onto argue that this “deliberately chosen slower pace reflects
a concern about the risks and negative outcomes associated with expanding too
quickly. These risks and negative outcomes tend to be personal rather than economic,
such as the belief that fast-paced expansion will place inordinate demands on the
entrepreneur’s time and energy.” Cliff (1998) proposed that SMEs set business size
thresholds and advocated further research to determine “whether the observed gender
differences reflect a true difference in the growth orientations of male versus female
entrepreneurs, or merely a difference in the rhetoric used by men and women to
describe their attitudes towards expansion” (Cliff, 1998, p. 539).
Conclusions
In summary, the literature has adopted a cross-disciplinary approach to risk and
research and has tended to focus on a particular aspect of risk, e.g. propensity rather
than taking a holistic view of risk. The relationship between preparedness, propensity
and perception has not been given sufficient attention in the literature generally and
even less in the context of women and risk. It would therefore be wrong to treat women
entrepreneurs as an homogenous group.
Perceptions may be influenced by the self-confidence levels of the individuals
involved in the entrepreneurial venture. If an individual is confident the situation or
decision maybe seen as less risky but if the individual lacks confidence then they may
perceive more barriers and anticipate the decision to be more risky. Studies such as
Bruce and Johnson (1996) and Li and Smith (1976) have suggested that women become
less risk averse when they have more confidence and Slovic (2000) and Chung (1998)
identified that although women and men had exhibited similar traits (i.e. in regard to
propensity) there were still noticeable differences in risk taking. If the process by which
entrepreneurs view risk and what is influencing their risk perception is not understood
it is difficult to offer help and advice.
Furthermore, an issue that relates perception with definitions goes back to what is
categorised as a financial risk by individuals. For example, there is the issue of how
financial risk or indeed “growth” as a financial risk indicator, is defined by the
individual. Differences in attitudes to growth (see Chung, 1998) may have more to do
IJEBR with women not wishing to risk their home/work balance rather than an antagonism to
11,2 growing the business per se. Moreover, it is argued by some (Ljunggren and Kolvereid,
1996) that women are better at self-screening and thus women reduce risk by doing
what they know (which may ghettoise them to low-growth sectors) and using family
support (in capital or in kind) at the start-up phase. The latter may also be related to the
social structures that women encounter (Brush, 1998). From a feminist standpoint,
154 women are never just women (Mirchandani, 1999) and it is thus the social structure
that helps create or sustain differences in entrepreneurial behaviour. Promoting SMEs
as growth oriented may be increasing risk perceptions towards entrepreneurship in
certain demographic groups.
As Athayde (1999) argued it maybe exogenous issues rather than psychological
characteristics that determine whether a woman becomes self-employed. Similarly,
Thompson (1999) argued that women, due to their lack of relevant work/management
experience, limit their choice of sector for their business start-ups to those with low
barriers of entry but with often high attendant risks, e.g. catering. The source of risk in
this instance is therefore exogenous. Consequently, Athayde (1999) argued for
entrepreneurial theory that is able to assess both personality and situational variables
as well as interactions between the two. Indeed, Brush (1998, p. 58) found that gender
differences based on motives or individuals’ characteristics are not conclusive and
posits that psychological motives or traits, e.g. achievement, may combine with
economic necessity or wealth seeking to motivate new business start-up in men and
women.
The fact that an individual may oscillate over time between being risk averse and
risk prone also offers a challenge. A knowledge of risk or the ability to assess their own
propensity and perceptions would aid potential entrepreneurs to determine whether
they would be suitable entrepreneurs and indeed whether they would be able to sustain
the business. It would also help entrepreneurs realise how they would be influenced by
their own risk perceptions in managing their business.
It seems apparent that risk is present in the decision situation context, the
personality traits of the individual decision maker and in the specific decisions that
have to be made. Few studies have shown how to affect change in or towards the
entrepreneurial sector. Yet implicitly the studies on risk, albeit often in a wider decision
making context than the small business sector, suggest that changes in the context or
changes in access to opportunities and/or support mechanisms can facilitate change.
The assumption that the changes in attitude/behaviour are simply a product of risk
factors is misleading. There are obvious changes occurring within the gendered
context, which influence the needs and behaviour patterns of women in the SME sector.
Personality traits may possibly reinforce other risk influences, though it would be
naive to assume that this would always be the case, for all SMEs and for all women.
For example, the raised expectations of SMEs growth potential or business
inputs/processes may not be deliverable by SMEs in certain sectors or those lacking a
desire to put into place factors (e.g. time, staffing) to support such growth.
The literature signifies a very complex set of inter-relationships between all of the
factors involved. Thus, isolating particular sub-factors or variables for measurement
purposes would be impractical and the bi-directional influences present would prevent
any meaningful assessment of the strength and direction of the association. In terms of
a coherent body of work the literature is playing catch-up, i.e. whilst acknowledging
changes in the decision-making context of women, the literature is not yet focused on Women and risk
women entrepreneurial context. Certain factors such as the changes in social structures
(e.g. the family as primary social structure) or changes in the political climate leading
to SME support will influence attitudes to risk and subsequent behaviour.
Environmental changes in the gambling market in regard to access and opportunity
have illustrated that such change can be introduced (Brindley, 2001).
155
Implications for policy
Identifying the most effective way of removing or reducing the barriers women face
requires a number of initiatives. In terms of “business support” we need to know how
women view risk and identify what influences their perceptions of risk before advice
can be targeted. If agencies do not know how women view risk it is difficult to advise
on strategies to help women cope with varying risks, managing uncertainty and
appropriate risk management tools. The provision of such a tool kit would enable both
the individual and the support networks to make objective decisions, removed from a
reliance on stereotypes. It is a false assumption that all women are risk averse or that
women owned businesses are not growth orientated. What has to be acknowledged is
that “success” and “growth” may be defined by women in different ways than the
usual criteria used to promote these terms.
Underlying these issues is the suggestion by some research studies that women
self-screen when deciding to begin a business, which often leads them to rely on family
capital and to begin businesses based on what they know. Business support has the
opportunity to widen horizons by reducing barriers, viz access to financing and by
illustrating how women’s skills may be transferred into other business ventures that
they may not have considered. However, this is only possible if business support
networks move away from stereotypical definitions, understand that risk perception is
not a uniform concept and identify ways in which women can access advice at the
screening stage. This is important because studies suggest that as women gain
confidence they become less risk adverse. If confidence can be instilled, effective
businesses may be developed but confidence can only be engendered if support
agencies understand how women view risk. Thus a knowledge of risk helps
individuals to assess their suitability for an entrepreneurial career (their appetite for
risk) and to assess best fit/choice of risk opportunities the business/individual may
face.
In addition, through the life cycle of a business the business owner may oscillate
between being risk prone and risk seeking and support can help business owners
identify/anticipate this oscillation. This would enable the SME owners to recognise
their own risk perceptions in managing the business and the influence these may have
on the business. Moreover, by managing the sources of risk, sustainability of the
business becomes more likely. There appears to be a general training need for risk
management within the sector that business support should provide. However, in
terms of women-owned businesses or engendering potential women entrepreneurs this
risk management training must be cognizant of the influence of social structures on
women’s understanding and attitudes towards entrepreneurial risk.
During the “start-up phase”, there needs to be a realisation that women do what
they know to reduce risk and hence they may begin businesses that are located in
low-growth sectors of the economy. Such a ghettoisation of women-owned start-ups
IJEBR makes them potentially more vulnerable to exogenous risk sources. This situation
11,2 needs to be recognised and accommodated and there needs to be a policy recognition
that women come to the SME sector with different “human endowments.” If
entrepreneurship in itself is seen a risky situation, lack of confidence can further
increase barriers to women considering entering self-employment. At the start-up
phase, the question “Is SME ownership an opportunity for women?” has to be
156 answered. Support is needed for individuals to help to screen themselves as potential
entrepreneurs, to recognise the barriers they perceive, to create a dialogue and
influence their risk perceptions. If Shaver’s (1995) view is adopted, i.e. that
entrepreneurs can be made, then this validates schemes that re-train individuals to
enter self-employment following redundancy and career breaks etc.
It is important that support agencies do not leave the SME alone after the start-up
phase, as an individual may go from being risk prone to risk adverse. There is a need to
guide these new recruits through as their businesses develop. A scheme where the
individual can recognise their own risk issues and how support agencies can help
alleviate them is therefore proposed. As the business progresses the promotion of the
premise that SMEs must be growth oriented has a potential detrimental effect by
increasing the number of risk barriers. The definition of success used by outside
agencies is more often a financial measure, which may mitigate against women. For
self-employed women their maintenance of a home/work balance maybe deemed a
success, as they can self-manage their time and collect their children from school.
Agencies that only promote financial success may be guilty of promoting a male
hegemony that supports a masculine view of entrepreneurship. The result may impact
upon the financial support available from banks to support women-owned SMEs,
which raises question about equal opportunity/access to capital. There is a need for a
post-start-up tool kit to help women entrepreneurs recognise their own risk behaviour
and then realise what growth opportunities may be avoided. How women-owned
businesses are measured, the metrics used by outside agencies, e.g. banks, the issues
that women businesses grow less quickly and that women may be more uncomfortable
with growth have implications for advice and support given. There is a need to
understand how women want to grow their business and a subsequent need that they
are not castigated if their ambitions are different and if they see fast growth as risky.
Currently, it would appear that women have to adapt to equalise and they may always
be onto a loser if success is only defined in growth terms.
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