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Belief in Ideas Inspires Women to Start Businesses

Study: Researchers find that workplace gender bias remains a secondary motivating factor for women who strike out on their own.


Pundits have cited everything from the glass ceiling to corporate downsizing to explain why American women are starting their own companies at twice the rate of the national average.

But a just-released survey says the desire to take a good idea and turn it into a viable business is the main reason cited by women striking out on their own.

The study commissioned by three prominent women's organizations--Catalyst, the National Foundation for Women Business Owners (NFWBO) and the Committee of 200--also found that frustration with their previous work environments is leading more women to start their own businesses.

"If employees don't feel rewarded, they're going to find something else to do," said Sharon Hadary, executive director of NFWBO. "Increasingly, entrepreneurship is attracting some of the best and brightest."

The U.S. now boasts of more than 8 million women-owned businesses, employing one out of four workers nationwide, according to NFWBO.

Economists have observed for some time that women are launching start-ups at a furious clip. But the "Paths to Entrepreneurship" survey is the most significant attempt so far to figure out why female business owners are doing what they're doing.

While the glass ceiling and other forms of gender bias continue to push women out of corporate America, the pull of entrepreneurial opportunity was the most common reason women gave for hitting the exits.

Fully 44% of 650 women business owners surveyed said they decided to start their own firms primarily because they had a winning idea or they realized they could do for themselves what they were already doing for an employer.

That's what motivated Deb Halberstadt to give up a job with NBC to start her own television production firm, Pasadena-based HalfCity Productions in 1989.

"Like many women, I realized I could do what I was doing for the network on my own," Halberstadt said. "I wanted to control my own fate."

The survey results bear out what many observers have known for some time--that the entrepreneurial spirit isn't gender-specific, said Debra Esparza, director of the Business Expansion Network at USC. "Entrepreneurship is about finding a market need and filling it," Esparza said. "That's true whether the business owner is male or female."

Which isn't to say that there aren't some gender-related circumstances propelling women to start their own companies. Twenty-two percent of women surveyed who have started businesses in the last 10 years say they were motivated mainly by "glass ceiling" issues such as low pay and limited opportunities for advancement.

One-third of these women said they felt they weren't taken seriously by their old employers, while 14% said they weren't fulfilled or challenged in their old jobs. More than half, or 58%, said nothing would attract them back to corporate life.

Among them is Pat Johnson, who started a medical consulting practice after being downsized from her previous job with a giant health insurance company in 1996.

"I'm not interested in going back to any large corporation," said Johnson, founder of Los Angeles-based Health Point Services of America. "I like the flexibility and being nimble . . . as opposed to working in a big bureaucracy."

The survey also polled 150 male entrepreneurs, 59% of whom had started a business closely related to their previous careers. In contrast, 56% of the women surveyed either started a business totally unrelated to their previous careers or they turned a hobby or personal interest into a livelihood.

Vivian Shimoyama left a consulting firm to start Breakthru Unlimited, a Manhattan Beach company that makes glass artwork and executive gifts, many with inspirational messages about shattering barriers. She said her years of hanging around corporate suites, where she saw few women or people of color, convinced her to make the switch.

"A lot of women are looking to incorporate meaning into their life's work," said Shimoyama, who is also president of the Los Angeles chapter of the National Assn. of Women Business Owners. "I wanted to promote the advancement of women."

The survey also showed that:

* Women who launched businesses in the last 10 years are much more likely to have come from management positions than clerical posts.

* Women are much more likely than men to create a new business than to purchase an existing one.


Entrepreneurial Explanations

Reason that women who have been in business fewer than 10 years gave for starting a company:

Entrepreneurial idea: 35%

Glass ceiling: 22%

Unchallenged: 14%

Downsized: 10%

Fell into it: 10%

Family event: 5%

Born to be: 3%

Reentry: 1%

Source: "Paths to entrepreneurship," Catalyst and National Foundation for Women Business Owners

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