Academic journal article Journal of Business and Entrepreneurship

Pre-Business Experiences of Minority and White Women Entrepreneurs: An Exploratory Study of Pathways to Business Ownership

Academic journal article Journal of Business and Entrepreneurship

Pre-Business Experiences of Minority and White Women Entrepreneurs: An Exploratory Study of Pathways to Business Ownership

Article excerpt

ABSTRACT

A comparative analysis was performed between white and minority women business owners in the personal services industry. The business owners were assessed in three key categorical areas: characteristics of the business owners, characteristics of the businesses, and pre-business ownership experiences. The white women business owners were younger, more educated, more likely to be married and had been in business longer when compared to their minority counterparts. This study supports previous findings which indicate that certain majority groups will operate more profitable operations when compared to their minority counterparts because of the advantages of the former group.

INTRODUCTION

The influx of women into the workforce over the past half-century is one of the major developments of contemporary American society. Paralleling women's movement into the workforce is an increasing number of women operating their own businesses (Boden, 1999; Himelstein & Anderson, 1997; Kroll, 1998; Levine, 1996). Studies of women business owners have primarily concentrated on comparisons between men and women (Evans & Leighton, 1989; Wharton, 1989). Other studies, however, have looked at the reasons women left the mainstream labor market to pursue business ownership (Moore & Buttner, 1997; Shabbir & Di Gregorio, 1996; Tang, 1995). Still others have assessed the personality characteristics of minority and non-minority business owners (Bates, 1986,1989; Light & Rosenstein, 1995).

The number of studies of women business owners lags greatly behind research that assesses their male counterparts. In the same vein, the number of studies of minority women business owners also trail those done on white women business owners. Minority women are thus twice disadvantaged in terms of the number of studies that concentrate on them. The first disadvantage results from their gender, the second from their race. This double-disadvantaged position (Haddleston-Mattai, 1995; Smith & Tienda, 1988) occupied by minority women results in a relatively small number of studies.

The considerations identified above illuminate the need to pursue studies that accomplish two key goals: first, using grounded theoretical framework to look solely at women business owners, and second, using studies that provide a comparison of women business owners across racial lines-that is, minority versus white women business owners.

The current study addresses the above mentioned challenges in two basic respects. First, it concentrates on women business owners across racial lines. second, it applies the arguments from the disadvantage theory to show that white women business owners follow different paths to business ownership when compared to their minority counterparts. The data will show that white women business owners have more advantages by virtue of their majority-group status and therefore have greater opportunities, when compared to minority counterparts, to enhance their human capital potential via formal education and managerial experience. In contrast, the minority business owners, due to their fewer advantages, are more likely to develop an entrepreneurial orientation that focuses on less formal or informal sources, such as personal experiences or hobbies (as distinguished from educational or occupational experiences).

This study's contribution lies in its analysis of women's pre-business ownership experience as a focus as well as a predictive factor for later profitability, areas that have received little attention in prior studies. As such, the current research offers a broader and more realistic definition of the concept of entrepreneurial resources than studies that look solely at human capital, defined in terms of educational and occupational experiences.

METHODOLOGY

The business owners participating in this study were selected from the Chambers of Commerce and the New York State Directory of Minority Business Owners in four upstate New York counties. …

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