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ENTREPRENEURSHIP the Rise of Women Entrepreneurs People THE RISE OF WOMEN ENTREPRENEURS: People, Processes, and Global Trends Jeanne Halladay Coughlin QUORUM BOOKS THE RISE OF WOMEN ENTREPRENEURS People, Processes, and Global Trends Jeanne Halladay Coughlin with Andrew R. Thomas QUORUM BOOKS Westport, Connecticut • London Library of Congress Cataloging-in-Publication Data Coughlin, Jeanne Halladay, 1963– The rise of women entrepreneurs : people, processes, and global trends / Jeanne Halladay Coughlin with Andrew R. Thomas. p. cm. Includes bibliographical references and index. ISBN 1–56720–462–7 (alk. paper) 1. Self-employed women. 2. Businesswomen. 3. Women-owned business enterprises. 4. Entrepreneurship—Case studies. 5. Self-employed women— Developing countries. 6. Businesswomen—Developing countries. 7. Women- owned business enterprises—Developing countries. 8. Entrepreneurship— Developing countries—Case studies. I. Thomas, Andrew R. II. Title. HD6072.5 .C68 2002 338'.04'082091724—dc21 2001058935 British Library Cataloguing in Publication Data is available. Copyright ᭧ 2002 by Jeanne Halladay Coughlin All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2001058935 ISBN: 1–56720–462–7 First published in 2002 Quorum Books, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc. www.quorumbooks.com Printed in the United States of America TM The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48–1984). 10987654321 Contents Illustrations vii Acknowledgments ix Introduction xi PART I THE TREND 1 1 The Rise of Women Entrepreneurs 3 2 Women and Globalization 21 3 The Empowerment of Women 41 PART II THE PARTICIPANTS 55 4 Women As Business Owners 57 5 Economic Motivations for Female Entrepreneurs 71 6 Social Motivations for Female Entrepreneurs 81 7 Personal Motivations for Female Entrepreneurs 89 PART III THE PROCESSES 99 8 The Challenges Facing Female Entrepreneurs 101 9 Tools and Processes for Helping Female Entrepreneurs 113 vi Contents 10 Locating and Evaluating Potential Help Givers 123 11 Entry-Strategy Analysis, Monitoring, and Evaluation of Programs in Support of Female Entrepreneurs 131 Afterword 149 Appendix I: Female Entrepreneurship Resource Guide 151 Appendix II: Sample Business Plan 219 Further Reading 225 Index 227 Illustrations TABLES 2.1. Gender Poverty Ratio, 2000, Selected Countries 22 2.2. Women As Household Heads, 2000, by Region 25 2.3. Distribution of Female Labor Force, 2000, by Region 27 2.4a. Women’s Share of Labor Force by Sector, 1998, by Region 28 2.4b. Women’s Share of Labor Force, 1980–97, by Region 29 2.5. Health Metrics for Women, 2000, Selected Countries 30 2.6. Adolescent Fertility Rates, 2000, by Region 31 2.7. Estimated Births per Woman, 1995–2000, by Region 31 2.8. Prevalence of Violence Against Women by an Intimate Partner, Selected Countries 33 FIGURES 9.1. Evaluating the Female Entrepreneur’s DISC Behaviorial Style 115 11.1. Twelve-Part Scheme for Evaluating the Environment for Female Entrepreneurship 138 Acknowledgments Being a female entrepreneur is one of the most rewarding roles I have undertaken in life. I feel fortunate to have the opportunity to explore, examine, and celebrate the topic of female entrepreneurship in this book. I would like to recognize and thank Wendy Keller from Forthwrite Literary Agency for believing in this book and for her success as a woman business owner. Thank you also to Eric Valentine from Quorum Publishing for your confidence in me, your vision for the book, and your guidance in helping to create a quality product. This book could not have been written without the intellect, re- search skills, and writing talent of Andrew R. Thomas. I feel fortunate to have you as a coauthor and friend. Thank you to my parents, Jeanne and Kenneth Halladay, who raised a family of seven children, including two female entrepreneurs! You gave me the greatest gift a child can have—a close, loving family. Even more rewarding than the role I play as a female entrepreneur are the roles I play as wife and mother. Thank you to my best friend and biggest supporter, Kevin—you have stuck with me through it all. I dedicate this book to my daughters, Katherine and Emma. Hav- ing you was a success beyond any I can ever achieve in business. I hope that my desire to achieve my dreams will inspire you to pursue yours. Introduction Across the globe, women are starting businesses in record numbers. In the United States, for example, women own 9.1 million firms, or 38 percent of all U.S. companies. From 1987 to 1999, the number of woman-owned firms in the United States increased by 103 percent; employment by female companies rose 320 percent; and, even more astounding, sales grew by 436 percent. Female-owned businesses in the United States generate more than $3.6 trillion in annual sales, and female entrepreneurs employ more people than the entire For- tune 500. Although the United States may be the most reported example of the rise of female entrepreneurs within the industrialized world, woman-owned businesses are on the rise everywhere. In eastern Ger- many, women have created a third of the new enterprises since reunification in 1990, providing 1 million new jobs and contributing U.S. $15 billion to the German gross national product. Female en- trepreneurs in other transition economies, like Russia, Hungary, Ro- mania, and Poland, are making a similar impact. In Latin America, according to the World Bank, fully half of all economic growth in the last decade throughout the region is attributable to the creativity and hard work of female entrepreneurs. In South Asia, women now outnumber men as business owners. And in Southeast Asia female- owned businesses have been at the forefront of that region’s economic turnaround since the “Asian flu” arrived in 1997. xii Introduction Clearly, the growth of female enterprises is good for economies. What may be less evident, though, is that the rise of female entre- preneurs also benefits societies and women themselves. Those who desire to see the conditions for women improve all over the world have discovered the incomparable value of nurturing and cultivating female entrepreneurship. The benefits derived when women start and operate their own businesses are truly remarkable: increased self- esteem, quality of life, and life expectancy as well as reduced infant mortality, incidences of AIDS and other diseases, and domestic vio- lence. This book provides an examination of the fundamental issues facing female entrepreneurship from a global perspective. Divided into three separate sections, the book looks at the major areas of study con- cerning women business owners today: the global trend of female entrepreneurship; the characteristics and motivations of the women who start their own enterprises; and the processes women undertake to start their own businesses. The book concludes with ways that organizations—private, public, and governmental—can effectively support female entrepreneurship and continuously monitor and eval- uate their efforts. In Part I, “The Trend,” we seek to provide the reader with the global perspective to recognize the unstoppable rising tide of female entrepreneurship around the world. Chapter 1, “The Rise of Female Entrepreneurs,” addresses the exponential growth in woman-owned businesses in developed and developing countries. Underscored is the fact that the tremendous rise of female entrepreneurship is one of the most significant economic and social developments in the world. In the developing world, woman-owned “micro-enterprises” have begun to attract much attention as well. Charitable and nonprofit organizations working at the grassroots have found that investing in female entrepreneurs offers the most effective means to improve health, nutrition, hygiene, and educational standards for women and their children. Chapter 2, “Women and Globalization,” explores the impact of the expansion of the global economy on women. It goes without saying that globalization is probably shaping the future of all human beings more than any other single force at work in the world today. For this reason, the chapter undertakes an analysis of globalization as it relates to the hopes and dreams of female entrepreneurs. Chapter 3, “The Empowerment of Women,” investigates the def- inition of this much-used term within the context of woman-owned businesses. Introduction xiii Part II, “The Participants,” focuses on female enterprises by look- ing at the characteristics of the women who start them and addressing their primary motivations. Chapter 4, “Women As Business Owners,” looks at how fostering the participation of women entrepreneurs strengthens economies and can be a source of political, economic, and social innovation. Women business owners, in comparison with their male counterparts, often have different demands on their time and different ways of seeing things and may be newer to the market. They therefore do business differently from men and, consequently, constitute a real potential source of innovation in management style, company structure, ser- vices rendered to the community, and the use of technology, among other things. Clearly, no single factor inspires a woman to build her own com- pany. Her reasons depend on several personal and external circum- stances, both positive and negative. Chapters 5, 6, and 7 explore women’s primary and most deep-seated motivations for starting and running their own businesses: economic, social, and personal. In Part III, “The Processes,” we begin with the premise that women often establish businesses for different reasons than men do. And they typically start businesses in different markets and with dif- ferent business structures. Chapter 8, “Challenges Faced by Female Entrepreneurs,” explores the fundamental distinctions between female entrepreneurs and their male counterparts and delves into several issues that are unique to female startups. Chapter 9, “Tools and Processes for Helping Female Entrepre- neurs,” furnishes evaluative tools for a woman seeking to start her own business.
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