Gender as a Determinant of Small Business Performance: Insights from a British Study

Abstract

Studies of gender and small business performance have tended to avoid quantitative performance measures, such as sales turnover and annual growth. This study examines the determinants of gender on quantitative small business performance, based on interviews with 600 Scottish and English small business owner-managers, divided equally by sex. Subjects were asked to provide (on basis of recall) answers to relatively simple performance indicators, such as numbers employed, sales turnover, capital assets, and perception of profitability. Analysis first confirmed that there are marked differences by sex in entrepreneurial performance, desire to grow, and type of preferred growth strategy. Sector, business age, and co-ownership are complicating methodological factors. The most important predictors of performance were sector, number of owners, initial capital at startup, and whether finance was refused. Age of firm and age of respondent were important in some cases. Overall, gender is a significant determinant of performance as measured by sales turnover and number of full-time employees; it is not, however, a primary determinant compared with other factors. Industry sector and other contextual variables may be as important as the differing motivations of the genders found in other studies. Female businesses under-perform in number of employees, Value Added Tax registration, sales turnover, capital assets, and range of markets. Females are less likely to own multiple businesses and less eager to plan expansion; they have lower assets than male-owned firms. The lack of consistent differences across sectors means, however, that most variation in economic quantitative measures is due to a blend of factors, not just gender forces. (TNM)

Keywords: Females, Female owned businesses, Gender, Firm strategies, Firm performance