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Financing Profile: Women Entrepreneurs (October 2010)

Business characteristics of female business owners

Female business owners were typically younger and had less management or ownership experience than male business owners

After a sustained period of strong growth, the number of women entering self-employment has stabilized over the past decade. From 1999 to 2009, the number of self-employed women grew by 13 percent compared with 10 percent for men.^{Footnote 1}

In 2007, just over 260 000 firms were majority female-owned, constituting 16 percent of Canada's SMEs (Figure 1). Almost half of all SMEs in Canada had at least one female owner. Overall, gender distribution of SME ownership changed little between 2001 and 2007.

Figure 1
Gender Distribution of SME Ownership

[Description of Figure 1]
Source: Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2007.

The age profile of female business owners has changed considerably as the percentage of those under 40 years of age dropped from 28 percent in 2004 to 16 percent in 2007 (Figure 2). In spite of this, female business owners were generally younger than their male counterparts in 2007, averaging 48.5 years of age compared with 51.1 years of age for male business owners.

Figure 2
Percentage of SMEs with Owners under 40 Years of Age*

[Description of Figure 2]
Source: Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2004 and 2007.
* Bold value denotes statistically significant gender difference at 5 percent.

In 2007, 51 percent of female business owners had more than 10 years of management or ownership experience compared with 74 percent of male business owners (Figure 3). The difference in experience was statistically significant at 5 percent.

Figure 3
Percentage of SMEs with Owners Who Have More than 10 Years of Management or Ownership Experience*

[Description of Figure 3]
Source: Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2004 and 2007.
* Bold value denotes statistically significant gender difference at 5 percent.

Female business owners were more likely to operate a younger business and to operate in the tourism industry

A comparison of general business characteristics between majority female-owned and majority male-owned SMEs is presented in Table 1. In 2007, majority female-owned firms were younger than majority male-owned firms. Thirty-eight percent of majority female-owned firms started selling goods and services after 2001 compared with 30 percent of majority male-owned firms. Forty-four percent of majority female-owned SMEs were located in Ontario.

Interestingly, female business owners were more likely than male business owners to speak a language other than English or French (22 percent versus 12 percent), yet only a very small percentage of female business owners (0.3 percent) have resided in Canada for less than five years. In 2007, female business owners were more likely than male business owners to identify their firms as "slow growth" businesses (47 percent versus 37 percent), whereas male business owners were more likely than female business owners to operate firms whose sales have stopped growing ("maturity") or have started to decrease ("decline").

Historically, majority female-owned SMEs have been concentrated in the retail and service sectors (Carter 2002). In 2007, majority female-owned SMEs still tended to favour sectors related to wholesale/retail (17 percent), professional services (15 percent) and tourism (13 percent). The gender difference, however, was only statistically significant for tourism. There were fewer majority female-owned SMEs in agriculture/primary, manufacturing and knowledge-based industries than majority male-owned firms, but the gender differences were not statistically significant.

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