Amex Study Says Women Entrepreneurs Less Optimistic About An Economic Recovery. So What?
According to this American Express study, 47 percent of male small business owners think the economy will improve in the coming 12 to 18 months, compared to just 38 percent of female business owners. Evidently, this is a significant reversal from findings of a study conducted last spring when women business owners were more optimistic than their male counterparts.
Why are women less optimistic now? And, in the scheme of things, what do these numbers really mean?
The study was conducted by American Express OPEN, the division of American Express that works with small business owners. Small business owners are defined as having 100 employees or fewer. American Express OPEN began conducting these surveys in 2002. They say it's the first time in the survey's history that women are less optimistic than men.
While the numbers are interesting, I don't know how to put them in context. What does it mean if women business owners are less optimistic about the economic recovery?
Alice Bredin, a consultant to American Express OPEN, says the numbers matter because with optimism comes action. "Optimism and action breed success," says Bredin. "By being less optimistic, women business owners are missing opportunities." She says those optimistic male business owners will have a better chance of snapping up great employees and getting ahead of the competition as the economy recovers.
Based on that theory, slightly less than half of male small business owners are jumping on those opportunities. The majority appear to be feeling as cautious as female business owners. What Bredin could not tell me was why women are so much less optimistic than men. As she said, the survey wasn't looking for that information. It was designed to provide a "pulse" on small business owner attitudes.
Sandra Fielden@Free Trade has been thinking about the optimism factor and what it means that women are less optimistic. Her conclusion: Optimism is not all that it's cracked up to be.
... highly optimistic business owners learn less from past experiences and take more risks; this means that although they tend to be more financially successful, they are also more susceptible to failure (Hmieleski and Baron, 2009). In contrast, less optimistic individuals are more realistic and have a better chance of long-term survival but less opportunity for impressive gains. As women tend to fall into the less optimistic category, they may be expected to make less money but have more sustainable businesses.
Rieva Lesonsky, who blogs at The Small Business Blog, has also been looking at surveys, and she came to a different conclusion. Lesonsky says from the surveys she's been reading, she believes that sweeter days are ahead for small businesses.
Lesonsky reviewed three business surveys, The American Express OPEN Pulse Survey; The State of Small Business Report, sponsored by Network Solutions and the University of Maryland's Robert H. Smith School of Business; and the U.S. Small Business Outlook 2010, conducted by Forbes Insights. While the studies looked at the challenges small businesses are facing because of the recession -- lower revenues, slow-paying or non-paying customers, increased business expenses and longer sales cycles -- the surveys went a little deeper.
- 72 percent found more effective ways to operate (Small Business Success Index, SBSI)
- 71 percent worked harder and longer (Small Business Outlook, SBO)
- 64 percent ran their business more aggressively (SBO)
- 63 percent reduced overhead and expenses (SBO)
- 47 percent developed new revenue streams (SBSI); 46 percent according to SBO
- 31 percent reduced inefficiencies and staff (SBSI)
While AmEx is talking to women who are not optimistic, it seems that the members of the National Association of Women Business Owners (NAWBO) are seeing things a little bit differently.
There is growing optimism among women business owners about the health of the U.S. economy. Sixty-one percent of members polled by the National Association of Women Business Owners think the time to seize opportunities is now. “I think a lot of people have taken a wait-and-see approach, and the truth is now is a wonderful time to be building a business, get a leg up,” Sandra Yancey, the founder and CEO of eWomenNetworks, said.
In her blog post, Rieva Lesonsky said she likes surveys because they help you benchmark. I agree. For me, the significance of these surveys is not how the women business owners feel about the national economy, but what it seems to be saying about their personal economy.
Since the first week of January, I have become cautiously optimistic about my personal economy. The phone is ringing more. People seem more engaged with doing work. They may not be willing to pay the same amount that they used to, but there is work, and that is encouraging on so many different levels.
It simply feels better out there. Maybe I'm leaning to the more optimistic side of the issue because I've come to terms with the lower wages. I'm not taking that personally. Most of the consultants that I associate with are all taking assignments that pay 50 percent or less than their going rates in 2008. These consultants have made the decision that having work that pays less is better than not having any work at all.
Some may call it optimism, others may call it wishful thinking, but there is this kernel of hope that with work comes the potential to elevate earning back to 2008 levels.
What about you? Are you feeling optimistic or pessimistic about your personal economy?
BlogHer Contributing Editor: Business & Career