Every time a woman leaves a big organization to start her own business, the media goes a little nuts: Powerful Woman breaks free from the shackles of The Man to take back the office! Oh, the feminism of it all. In recent years, there have been plenty of high profile examples: Linda Avey and Anne Wojcicki at 23andme, Julia Hartz at Eventbrite, the six working mothers at Washington, DC, law firm the Geller Group.
Most of the buzz seems aimed at proving the much-discussed theory that big organizations are losing talent because -- when it comes to female talent, at least -- they're idiots. After all, there are incentives to hiring, and retaining, women in the workplace. In just one example, a 2011 Catalyst analysis of Fortune 500 companies found that those that had women on their boards outperformed those with no female directors. But many women are jumping corporate ship because their particular corporations don't value gender diversity, or simply aren't willing to be flexible enough to accomplish such diversity. Maybe they refuse to offer adequately flexible schedules in order to accommodate parenthood. Or they pay women less than men in the same positions. Or, as is most often the case, both.
As a result, women, fed up with demanding more and accepting less, pack their things and bid their farewells to big organizations in favor of the freedom, and guaranteed gender-equality, of being their own boss. According to the National Women's Business Council, there are 7.8 million women-owned businesses in the U.S., a number that represents a more than 20 percent increase since 2002.
But the glowingly optimistic reports of the growing number of female-owned businesses tend to omit one crucial detail: the fact that the vast majority of those businesses starts small and stays small. Women-owned businesses now represent nearly half of all privately held companies in the U.S., but 75 percent of these businesses aren't able to grow past $50,000 in annual gross revenue. A whopping 88 percent don't have employees.
Is this simply evidence of women knowing that bigger isn't necessarily better? Or do female entrepreneurs face the same challenges as those stuck under the corporate glass ceiling?
The answer is probably a bit of both.
Although reasons for leaving large organizations are very individual we still live in a society where men largely expect -- and are expected -- to earn the money while women expect -- and are expected -- to take care of the family. It's been difficult to shake these roles, even for couples, and individuals, who try. In the case of the legal profession, a 2007 report by the M.I.T. Workplace Center found that the number one reason female attorneys gave for abandoning the partnership track was "the difficulty of combining law firm work and caring for children in a system that requires long hours under high pressure with little or inconsistent support for flexible work arrangements." At the Geller Group, the all-female partners have considerably more flexibility in terms of when and where they do their work than they had when employed by larger firms, but they also have to pay for these freedoms, earning, in some cases, about half of what they had at those larger firms.
The truth is that there's not a whole lot of hope for women-owned businesses to reach the same levels of impact and profitability as male-owned ones if standards of gender in the family don't also change, and significantly. The bulk of raising kids is still the woman's job, even if she also works outside of the home -- and even if she is considered the main breadwinner. Studies show that even women who work carry out 70 percent of the domestic work
The challenges of balancing children and career aren't the only hindrance to female entrepreneurship. Challenges also exist for women who don't have kids. According to a Harvard Business Review report, how we think of women in general -- working moms or not -- is in dire need of a shift. The report found entrepreneurial activity is strongly linked to perceptions of opportunity and capability -- that is, if you think you'll succeed, and have support, you are more likely to try. And, frankly, most women don't have the necessary confidence, or support: In the U.S., women are 18 percent less likely to perceive they have the capability to start a business. And not until they have both -- the confidence and the support -- will the "new female boss" no longer face the same struggles as the old one.