Harvard Business Review Argues Female Entrepreneurship Isn’t Always Good

Compares the inequalities in corporate America with the risk of starting your own business

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According to an American Express breakdown of Census Bureau figures, the number of women-owned businesses between 1997 and 2014 rose by 68 %.

The data show that women are starting approximately 1,288 companies every day, up from 602 in 2011-2012. While an increase in women-owned businesses is typically considered a good thing, Harvard Business Review (HBR) is taking the numbers and examining them a bit further, asking, “Are more women going into entrepreneurship due to the unequal pay and unfair opportunities they receive in corporate America?”

Studies from the Institute of Education Sciences show that women graduate college at higher rates than men, with the Business Insider proving that although fewer females are promoted to positions of power, women have a 54.5% overall effective leadership rate compared to men who have a 51.8% rate. In addition, when examining salaries, a gender pay gap still exists with women making 82 cents for every man’s dollar, and when you look at black women, those numbers are even more stark with African American females making just 64% of a white man’s earnings.

While all of these factors of inequality in the corporate world may be the driving force behind more women becoming their own bosses, Alicia Robb of the Kauffman Foundation tells HBR that entrepreneurship is not always a better route to success for women.

“Less than 2% of women-owned firms reach that [million dollar] revenue threshold, and that is the same exact percentage as a decade ago,” Robb says, while adding that women-owned businesses have median receipts less than $225,000 and notes that businesses with receipts less than $100,000 are more likely to fail. Robb also highlights the fact that most female entrepreneurs fail to match their corporate salary and that 88% of their firms are sole proprietorship, non-employer firms.

Although the idea of becoming your own boss is attractive to many women, especially those with the entrepreneurial itch, do you feel that the risk of starting your own business outweighs being on the receiving end of unfair treatment in corporate America?

 

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