THE WOMAN ENTREPRENEUR:

MANAGEMENT SKILLS AND

BUSINESS PROBLEMS
by Robert D. Hisrich and Candida Brush

ABSTRACT: LA FEMME D'AFFAIRES: SES HABILETES EN FAIT DE GESTION ET

SES PROBLEMES DANS LE DOMAINE DES AFFAIRES
Jusqu'd main tenant, bien que le chiffre des entreprises dont Ies propridtaires sont du sexe
iAin soit en hausse, peu de recherches ont 6t^ faites sur Ies habilet^s des femmes d'affaires en
fait de gestion et sur Ies difficult^s auxquelles elles sont appel^s k faire face pr^isement k cause de
leur sexe.- En effet, Ies recherches d6j& faites en cette mati^re ont port^ notamment sur Ies diff^rents
types de femme d'affaires, leur motivation, leurs caract^ristiques ddmographiques et Ies genres
d'entreprise auxquelles elles se sont assocides. Or, pour rem^er k cefte lacune nous avons fait l'ex-
pertise, k unefehellenationale, de 468 femmes d'affaires. Plus pr&is6ment, nous nous sommes
renseignds sur leurs milieux et leurs entrainements, ainsi que sur leurs entreprises dans le monde
des affaires, leurs habilitds en fait de gestion, et, en dernier Ueii, Ies prbbl^mes auxquelles elles sont
exposdes par le fait qu'elles sont du sexe fdminin. De cette expertise nous avons pu tirer certaines
conclusions pratiques, dont nous ferons part & nos lecteurs dans l'article qui suit.

Starting and operating a business en- force, some of whom have elected to
tails considerable risk and effort, start and operate their own businesses.
especially for the entrepreneur, who
A Bureau of Census report based on
creates and builds a business from
1972 data indicates that female owned-
scratch, thereby assuming all the re-
businesses accounted for only 4.6 percent
sponsibilities for development and man-
of all firms in the United States, with the
agement as well as the corresponding
receipts from female-owned businesses
risks and gains. The risk is perhaps even
accounting for only 0.03 percent of all
greater for a woman entrepreneur, who
business receipts. The Small Business
has all the usual business problems as
Administration reports that the number
well as the problems associated with
of self-employed women increased from
being a woman in a male-dominated
1.7 million in 1977 to 2.3 million in
arena. In spite of this, increasing num-
1982—a 35 percent increase. During the
bers of women have entered the labor
same period the number of self-employed
men rose by only 12 percent. Women-
Dr. Hisrich is associate professor of management and di- owned businesses accounted for over
rector of the Small Business Institute at Boston College. He is
also a director of H&P Associates, a marketing/management forty billion dollars in revenues.'
consulting firm. His publications include numerous articles
and four books: Marketing a New Pmduct: Its Plaiimiif;. BACKGROUND
Deuehiinwnt. ami Conlml; The MBA Career. Marketing: A
Practical Managerial Apprxmch: and Prmiuct Planning atui Most of what is known about entre-
Development.
Candida Brush is a director with H&P Associates, a preneurs—their backgrounds, their mo-
marketing and management consulting firm in Boston. She re.
ceived an MBA degree from Boston College, and has taught
marketing and business courses at several universities. Wall Street Journal. 17 May 1983, p. 1.

30 Journal of Small Business Management

tives for starting their own companies,
and their business problems—is based
on studies of male entrepreneurs.^ This
is not surprising, since men make up the
majority of people who start and run
their own businesses. Interest in women
entrepreneurs as research subjects has
developed more recently.
Studies of female entrepreneui-s have
addressed basically the same questions
as those of male entrepreneurs. One
study of twenty female entrepreneurs
found that their major motivations for
starting a business were: the need to
achieve, the desire to be independent,
the need for job satisfaction, and
economic necessity. These female entre-
preneurs tended to have an autocratic
style of management, and their major
problem during startup was credit dis-
crimination. Underestimating operating
and/or marketing costs was a subse-
quent problem.3
Another study of 122 black, white,
Hispanic, and American Indian women
entrepreneurs found that the responses
of both minority and non-minority
women entrepreneurs differed signifi-
cantly from those of women in the gen-
eral population on tests measuring
achievement, autonomy, aggression, con-
formity," independence, benevolence, and
leadership. Differences were also found
between minority and non-minority
women entrepreneurs, with minority en-
trepreneurs reporting that they started
'See, for example: Neil Cohen. "The Five Ages of Ihe En-
trepreneur." Vpitture (July 1980), pp. 40-43; Orvis Collins and
David G. Moore, 'I'he Enterprising Man, Michigan State Uni-
versity, East Lansing, Michigan (1964); Eugene Gomolka,
"Characteristics of Minority International and Small Business
Enterprises," American Journal of Small Business (July 1977),
pp, 12-21; John A, Hornady and John Abond,"Characteristics
of Successful Entrepreneurs," Personnel Psychology (1971),
pp. 50-60; Edward B. Roberts, "Entrepreneurship and Tech-
nology; A Basic Study of Innovators—How to Keep and Capi-
talize on Their Talents," Research Management (July 1968),
pp, 249-266; and Harry Schrage, "The R&D Entrepreneur;
Profile of Success," Hariianl Business Heiiiew (November
1966), pp. 55-69; Herbert A. Wainer and Ir»-in M. Robin,
"Motivation of Research and Development Entrepreneurs,"
Journal of AiJlilinI Psyrliology (Fall 1969), pp. 178-184.
'Kleanor B. Schwartz, "Entrepreneurship; A New Female
Frontier," ,/()iirfi(i/(»/• (V>n/<'/;)/«>rar\' Business (Winter 1979),
pp. 47-76.
January 1984
their businesses at a later age than the
non-minority women. Non-minority fe-
male entrepreneurs scored higher on
ratings of need for achievement and in-
dependence; minority women appeared to
place greater value on conformity and
benevolence.''
Twenty-one women who participated
in a study of the demographic character-
istics, motivations, and business prob-
lems of female entrepreneurs indicated
that they had particular problems with
collateral, obtaining credit, and over-
coming society's belief that women are
not as serious as men about business.^
A final study focused on how the char-
acteristics of women entrepreneurs
varied according to the type of business.
The results indicated that women entre-
preneurs exhibited some distinctive char-
acteristics. They were older and more
educated than either the general populace
or the respondents in previous studies.
They also had very supportive parents
and husbands. Female entrepreneurs in
nontraditional business areas (finance, in-
surance, manufacturing, and construc-
tion) also differed from their counterparts
in more traditionally "female" business
areas (retail and wholesale trade). The lat-
ter group had particular difficulty in
gaining access to external financial
sources.^
The studies reported above dealt with
restricted samples. In order to answer
questions about female entrepreneurs in
general throughout the United States, a
survey was developed, the construction
and results of which are described below.
'James DeCarlo and Paul R. Lyons, "A Comparison of
Selected Personal Characteristics of Minority and Non-
Minority Female Entrepreneurs," Journal of Small Business
Management (December 1979), pp, 22-29.
'Robert D. Hisricb and Marie O'Brien, "The Woman En-
trepreneur from a Business and Sociological Perspective, "in
Frontiers of Entrepreneurship Research. 1981 (Proceedings of
the 1981 Conference on Entrepreneurship, Babson College,
June 1981), pp. 21-39.
'Robert D. Hisrich and Marie O'Brien, "The Woman En-
trepreneur as a Reflection of the Type of Business," in Fran-
tiers of Entrepreneurship Research. 1982 (Proceedings of the
1982 Conference on Entrepreneurship, Babson College, June
1982), pp. 54-67.
31
 RESEARCH DESIGN
A questionnaire was developed which
included a mixture of scaled, dichoto-
mous, multiple choice, open-ended, and
rank-order items designed to assess the
following: motivation for starting a busi-
ness, general entrepreneurial characteris-
tics, management skills, social and psy-
chological factors, educational and occu-
pational influences, demographic infor-
mation, and business data.
Mailing lists of women entrepreneurs
were obtained from trade associations
and state offices. The questionnaire was
then mailed to 1,151 women entrepre-
neurs in 18 states. The survey included
women from all areas of the country.
Four hundred and sixty-eight usable
questionnaires (fully completed and con-
taining all of the relevant information)
were returned, a 41 percent response rate.
FINDINGS
The findings are divided into four
areas: the demographic composition and
background of the women entrepreneurs,
the nature of their business ventures, the
skills of the entrepreneurs, and the prob-
lems they confronted.
Demographics
The majority of the 468 women entre-
preneurs in the sample were between the
ages of 35 and 45; 55 percent were mar-
ried and had children. Fifty-one percent
of the women were the first-born in their
families, and 68 percent had attended col-
lege or graduate school. Nearly 70 per-
cent of the women entrepreneurs had
liberal arts degrees in one of several ma-
jors, with business administration being
the most frequently mentioned. Fewer
than 9 percent reported majors in engi-
neering and science—an obvious barrier
to entering such traditionally male-
dominated business areas as construction
and manufacturing. The specific field of
graduate study most frequently men-
tioned was law, with the vast majority of
women entrepreneurs who had graduate
32 Journal of Small Business Management
degrees reporting that their degrees were
in one area or another of liberal arts.
Education played an important role in
the backgrounds of the women entrepre-
neurs. Not only were their parents—par-
ticularly their fathers—more highly edu-
cated than the general populace, but the
women entrepreneurs also tended to
marry more highly educated men. The
importance of education is reflected in
the following comment of one woman en-
trepreneur:
In my family, education was very im-
portant. My mother was a dentist in a
day when most women did not even
graduate from high school. But it was
my father who was my real motivator.
This respondent's father, a self-employed
professional, gave her the example and
encouragement she needed to be success-
ful in her own business.
This high education level of the
women entrepreneurs and their parents is
reflected in their social class—67 percent
of the women entrepreneurs indicated
that they grew up in the middle- to upper-
class environments. Social class was also
correlated with the parents' occupation.
The majority of the women entrepreneurs
stated that their fathers were self-
employed. A relatively small percentage
of the mothers, fathers, and spouses of
the women entrepreneurs were blue collar
workers (3 percent of the spouses, 8 per-
cent of the mothers, and 19 percent of the
fathers). Spouses held predominantly
professional or technical positions. This
kind of background appears to have pro-
vided the women entrepreneurs with
good role models as well as a supportive,
financially sound environment in which
to begin new business ventures.
The Business Venture
An overwhelming majority of the
women entrepreneurs (90 percent) oper-
ated service businesses—only 7 percent
were engaged in manufacturing, and only
3 percent in financial businesses. This, of
course, reflects the liberal arts educations
and past experiences of most of the entre-
preneurs, over 70 percent of whom had
previous service-related experience. The
educational system and the general en-
vironment appeared to provide little en-
couragement or advice for these entrepre-
neurs, as the following two comments
demonstrate:
It would be good to raise society's ex-
pectations for the female population;
better career guidance and advice is
also needed for women students.
Women should grow up with the expec-
tation that they will need to support
themselves.
The type of business venture varied
widely, from the very innovative (a pri-
vate post office) to the male-dominated
fields of petroleum products and plumb-
ing, but traditionally female areas (such
as a travel agency or clothing design) pre-
dominated, as shown in table 1. The busi-
ness area most women entrepreneurs
were involved in was sales. The women
established these enterprises themselves,
the type of business varying from real
estate and insurance to wholesaling and
manufacturers' representatives.
Table 1
NATURE OF BUSINESS VENTURE
Type o< BOsiness Percentage
Sales 19.7
Consulting
14.6
Design/Art/Architecture 10.0
Public Relations and Advertising 8.3
Personnel and Business Services 7.7
Computer.Related Business 7.5
Manufacturing 7.0
Secretarial 6.7
Educational Services 6.1
Law/Medical Services 5.4
Distribution and Construction 4.5
Finance 3.0
None of the businesses was based on a
product innovation or product modifica-
tion. The majority of the women founded
their enterprises using an established or
January 1984
slightly modified product for an existing
market. Few women entrepreneurs form
companies that enter new markets with
distinctly new inventions.
Table 2
GROSS BUSINESS REVENUES
IN 1980 AND 1981
Percentage o< Firms
Gross Revenue in Doliars 1980 1981
Less than $30,000 26 20
$30,000-$99,999 28 27
$100,000-$499,999 29 32
$500,000-$999,999 8 9
$1,000,000-$4,999,999 8 9
$5,000,000 and over 1 1
A large proportion of the businesses
were incorporated (43 percent). Thirty-
five percent were sole proprietorships; 12
percent were general partnerships. Most
of the businesses were relatively young-
over 60 percent had been in operation for
four years or less. The gross revenues of
the firms were fairly low, as would be ex-
pected given the short periods of time in
operation and the predominance of busi-
nesses in the service sector. Table 2
shows gross revenues for 1980 and 1981.
These figures are consonant with the em-
ployment patterns of the businesses (see
table 3). More than 30 percent of the busi-
nesses had no employees other than the
woman entrepreneur herself, and 42 per-
cent had only one to four employees.
Even though the present venture was
the first for most of the women entre-
preneurs (78 percent), 64 percent had
gained previous experience in their busi-
ness area. This is consistent with previ-
ous findings that entrepreneurs tend to
start businesses in fields in which they
have had job experience.' The most fre-
'Arnold C. Cooper and William G. Dunkelberg. "A New
Ix)ok aL Business Entry." in Fnmtiers of Entrepreneurship He-
search, 19H1 (Proceedings of the 1981 Conference on Entrepre-
neurship. Babson College, June 1981). pp. 1-20.
33
 Table 3 (see table 5). (This comes as no surprise,
SIZE OF FIRMS BY since only 22 percent of the women en-
NUMBER OF EMPLOYEES trepreneurs had undergraduate business
training. Few had direct experience with
finance, marketing, and business opera-
Number of Percentage of Firms by
Type of Employees
tions.) In addition, since most of the busi-
Employees
nesses (60 percent) were relatively young
Full Part Family
Time Time —between one and four yeeirs old—the
None 30 34 66
women business owners may not yet
1-4 42 48 32 have developed confidence in some of
5-9 13 8 * their management abilities. Their lack of
10-19 10 6 * experience in finance, marketing, organiz-
20-49 4 4 • ing, and planning could lead to problems
50 or more 1 1 *
that limit the growth of their businesses
'Less than 1 percent. unless these women can acquire the skills
they lack and make plans to accom-
quently mentioned etreas of recent past modate expansion, increased sales, and
experience were teaching, administration capital needs.
(middle management), and secretarial Business Problems
positions, most often in service busi-
nesses (see table 4). Ninety percent of the Nearly all of the women surveyed indi-
female entrepreneurs owned service busi- cated that they had encountered one or
nesses. more problems with their businesses dur-
ing startup and/or current operations.
Table 4 The biggest problems during startup
MOST RECENT PAST EXPERIENCE were lack of business and financial train-
OF WOMEN ENTREPRENEURS ing, obtaining credit, and lack of col-
lateral (see table 6). These problems, too,
are related to lack of specific business
Field Percentage education and work experience. Further-
Education 11,7 more, many of the women had not estab-
Administration 11,1 lished credit ratings, making it even more
Secretarial 9,6 difficult to obteiin conventional fineincing.
Art/Photography 8,9
Marl<eting/Personnei 7,3 One woman entrepreneur commented
Saies 7,1
5,0
that "It is important to stress equal
Consuiting
Finance/CPA 4,7 rights for women with regard to assess-
Executive 4,4 ments of credit worthiness, stability, pro-
Homemaker 4,3 ductivity, and effectiveness. Business
women are stiU treated as second-class
citizens when dealing with the financial
Management Skills
community."
The service orientation of the new Other often-cited problems are also
business ventures of the women surveyed tied to lack of education and experience,
is in keeping with the women's appraisals e.g., inadequate management experience
of their own management skills. Overall, and lack of experience in hiring others.
the women entrepreneurs considered The women were aware of their need for
themselves to be adept at idea genera- guidance and counsel—this problem was
tion, product innovation, and dealing mentioned by 21 percent of the respond-
with people, average in marketing and ents—but they apparently had problems
business operations, and weak in finance acquiring it. Some comments:

34 Journal of Small Business Management

 Table 5
WOMEN ENTREPRENEURS' SELF-APPRAISALS
OF MANAGEMENT SKILLS

Percentage oi Responses
Very No
Management Skill Poor Fair Good Good Excellent Opinion
Finance: securing capitai.
forecasting, budgeting 15 32 27 15 6 4
Dealing with Peopie: management.
development, and training 2 10 28 33 27 —
Marketing/Sales: marketing research.
promotion, selling 6 20 20 33 22 —
Idea Generation/Product
Innovation 3 10 26 27 33 1
Business Operations:
inventory, production.
day-to-day operations 3 18 32 30 . 17 —
Organizing and Planning:
business strategy.
policies, and organization 4 15 29 29 23 —

What I needed was more effective SUMMARY AND CONCLUSION

SBA involvement during the first
year. I approached both, the SBA and
SCORE for assistance (not money) and
felt I was treated in a patronizing way.
I received very little encouragement
because of my financial circumstances.
The biggest roadblock to women's
success is the lack of business-related
skills such as independence, self-confi-
dence, assertiveness, and drive (skills
men learn while growing up), as well as
the absence of a defined women's net-
work for referrals and business in-
roads into other successful businesses.
Women continued to encounter prob-
lems as their businesses continued in
operation, but the problems were men-
tioned less frequently than at startup
(see table 7). Again, lack of experience
with financial planning was a major
problem, but other difficulties, such as
hiring competent staff and attracting
customers, which were deemed relative-
ly unimportant during startup, took on
increased importance. After the intro-
ductory stage, the demands of the busi-
ness impinging on personal life also ap-
peared to become more of a problem.
The "typical" woman entrepreneur
as depicted in this study is the first-born
child of middle class parents—a self-
employed father, and mother who does
not work outside the home. After obtain-
ing a liberal arts degree, the typical
woman entrepreneur marries a college-
educated man who works in a profes-
sional or technical capacity. She then
has children, and works as a teacher, ad-
ministrator, or secretary. She does not
start her own business—most likely a
service-related one—until the age of
forty or later. Her biggest business
startup problems are with finance,
credit, and a lack of business training.
Once the business is in operation, lack of
financial planning experience is her
greatest difficulty.
There are, of course, exceptions to
this composite portrait, but a great
many of the 465 women entrepreneurs
surveyed share these general character-
istics. Most of their businesses are small
and young, with accompanying low
revenues. Will these businesses grow,
adapt, and change? Are women entre-

January 1984 35
 Table 6
STARTUP PROBLEMS

Responses
Problem Area Percentage Number
Lack of business training 30 140
Obtaining iines of credit 28 131
Lack of financiai planning experience 26 122
Lack of guidance and counsei 21 94
Weak collateral position 21 94
Lack of management experience 21 94
Lack of experience in use of outside services
(e.g., accounting and legal) 17 80
Other (e.g., cash flow, hiring,
attracting business) 17 80
Lack of involvement with business colleagues 16 75
Demands of company affecting personal
relationships 16 75
Lack of respect for business women 15 70
Personal problems 7 33
Legal problems 7 33

Table 7
PROBLEMS IN CURRENT OPERATIONS

Responses
Problem Area Percentage N umber
Lack of experience in financial planning 18 84
Other (attracting business, cash flow, hiring,
and organization) 17 80
Demands of company affecting personal relationships 15 70
Weak collateral position 13 61
Obtaining lines of credit 11 51
Lack of business training 11 51
Lack of guidance and counsel 10 47
Lack of involvement with business colleagues 10 47
Lack of management experience 10 47
Lack of experience in use of outside services 9 42
Legal problems 5 23
Personal problems 4 19

preneurs able to gain the training and
experience necessary to plan for growth?
Will they encounter the same difficulties
as male entrepreneurs do in making the
transition from a "one man show" to the
management of a more complex organi-
zation? Will their businesses survive to
compete at new size and revenue levels?
Some women entrepreneurs may prefer
to maintain small, easy-to-manage
businesses, but what can be done to help
those who choose to expand, or those

36 Journal of Small Business Management

who have not yet begun their business
ventures? The responses and comments
of the women themselves indicate a need
for the following changes:
• Elimination of stereotypes so as
to increase acceptance of women
in the business world.
• More visible role models and men-
tors for younger women, so that
they can see how women can be
successful in business and in
various professions.
• Changes in women's own atti-
tudes and goals, including a will-
ingness to learn finance.
Some specific changes that need to
be implemented in order for women en-
trepreneurs to become a more important
and effective element in the business en-
vironment include:
• Women should be encouraged to
study in fields other than liberal
arts. Guidance counselors and
others should point out the value
of learning more technical sub-
jects that can be useful when
starting a business, especially in
male-dominated fields such as
computer science, science, engi-
neering, and, of course, business.
• Women need to have access to a
wide variety of seminars on both
general and specific topics. General
topics that need to be covered are
finance, cash flow management,
marketing, preparation of business
plans and loan applications, and
general business organization.
SpecieJ seminars could address spe-
cific industry topics such as "de-
veloping a business plan for a new
retail store." Women entrepreneurs
are generally well-educated, and
their desire for such information
makes it likely that such seminars
would be well-attended.
• Women entrepreneurs should avail
themselves of all of the informa-
tion services now avedlable, £ind
should seek assistance from ex-
perts in the field, from colleagues,
and from friends in order to estab-
lish both formal and informed net-
works that serve as support sys-
tems. Experienced mentors could
be drawn from these networks to
act as advisors, particularly on
financial matters.
If women are encouraged and en-
abled to prepare themselves for running
businesses through formal education
and attendance at strategic seminars,
and through the formation of support
networks, their chances for success in
the business environment should in-
crease significantly.

EPA SMALL BUSINESS OMBUDSMAN

The U.S. Environmental Protection Agency now has a Small Business

Ombudsman to make sure your problems and suggestions are heard and
you are fairly treated. The Ombudsman is charged with giving you easier
access to the Agency, helping you comply with EPA's regulations, investi-
gating and resolving your disputes, and increasing the Agency's respon-
siveness and sensitivity to the needs of small business.
Call toll-free: 800-368-5888
(In Washington, D.C.: 382-4538)

January 1984 37