Women are largest growing group of entrepreneurs
Report finds that more women ‘evolve’ into business than set out as entrepreneurs.
LANSING — The largest-growing segment of entrepreneurs in the U.S. is minority women, according to the 2015 State of Women-Owned Business Report, a report commissioned by American Express.
While some women may not go through college in search of entrepreneurial success, their changing life experiences or personal influences may shape their decisions later on.
LeCathy Burston, director of membership and corporate development at the Great Lakes Women’s Business Enterprise Council in Livonia, said women tend to expand their perceptions based on changing life courses.
“What I have found is that women evolve into business,” Burston said. “There are very few women that say, ‘Well, when I get out of college I’m going to build a logistical or manufacturing company.’ They evolve into it from husbands, fathers, divorces or job challenges.”
Additionally, Burston said being a second-generation business owner gives women the confidence and wisdom to be entrepreneurs in their own fields. She used the example of a father who had his own business using his own truck for a mini-moving company. The daughter may go on to buy her own trucks, building a small business of movers based on her experiences and challenges with her father’s business.
“I think women do have that skill set to have high ambitions, but they don’t have the self-security — unless they are second-generation business owners — to step out like that,” Burston said.
Heidi Gottfried, a professor of sociology at Wayne State University, said women tend to pursue “caring” or “helping” professions like teaching and nursing.
Even so, Gottfried said the larger focus is that women are also entering male-dominated professions but continue to earn less than men. She said women are doing everything right to significantly narrow the earnings gap, but nothing has changed.
“We now know that educational credentials alone will not solve the earnings gap,” Gottfried said. “Young women are closing the education gap, earning more bachelor’s and master’s degrees than men, and increasing their representation in law, business and medical schools.”
Jean Kimmel, an economics professor at Western Michigan University, said it is important to look at the earnings gap between men and women while also considering the large differences in productivity factors for them.
“One of the things that frustrates me with the coverage of the gender-wage gap is it is viewed without any adjustment for differences in productivity factors that drive factors and wages,” Kimmel said. “Men are more likely than women to work full-time year round. Men, on average, work higher-paid professions — men are more likely to be science majors or engineering majors.”
In her class on women and the economy, Kimmel asks students to think about the effect of being female on earnings, with all other factors like GPA, major or schooling being equal. She then asks, “Is there still a significant difference?”
Kimmel said, on average, women still earn a little bit less when all other factors remain constant.
Ivy Simmons, executive vice president and chief of staff at the Michigan Black Chamber of Commerce in Detroit, said being a woman entrepreneur doesn’t mean women can’t escape discrimination, but it makes it harder to measure.
Simmons used the example of women entrepreneurs facing discrimination in how banks work with and loan to them compared to men. She said to combat discrimination and encourage minority women entrepreneurs the organization launched the Women of Color Entrepreneur Circle in September.
“You could be really successful in your business but cash-poor, personally,” Simmons said.
The initiative guides women through difficulties in their business as well as with the impact of business on their personal lives, to strengthen a community of minority women entrepreneurs. The circle works with women in various aspects of business: mentorship, networking, wealth management, development, resources, work-life balance and training.
Contributing to the profiles of minority women in entrepreneur businesses is the Grand Rapids Area Chamber of Commerce, which was one of four chambers in West Michigan that introduced the Minority- and Woman-Owned Business Directory.
Sonya Hughes, vice president of inclusion at GRACC, said the directory was created to help other chamber members diversify their own businesses with an easier way to reach out.
“It does elevate the profile and enhance the visibility for owners in minority companies and provides a collection plate for numbers,” said Hughes.