Women are great networkers, but may not always have access to key support relationships
Washington, D.C. – The National Women’s Business Council (NWBC) has released a study that found key structural differences between women’s and men’s social networks. Per previous NWBC research, there is a disparity in the amount and source of financial capital between men and women entrepreneurs. It was also determined that social networks are important because they enable the movement of financial, human and intellectual capital, as well as facilitate information exchange, but the usage and efficacy of those networks vary depending on gender and are impacted by the quality and quantity of those involved.
There is plenty of emphasis on an entrepreneur’s ability to identify key members of their network, but less discussion on the gender differences that exist in entrepreneurs’ social networks. This new research, commissioned by the Council and conducted by Premier Qualitative Consulting, confirms that there are structural differences between women entrepreneurs’ and men entrepreneurs’ social networks.
“When it comes to entrepreneurship, social capital is essential to success. Support in the form of mentorship, advice, connections to potential customers and business partners are crucial when you are starting your business,” said Carla Harris, Presidentially-appointed Chair of the National Women’s Business Council. “We know women are deft social networkers – but we needed to find out why their networks don’t always translate to capital.”
This analysis used the Panel Study of Entrepreneurial Dynamics (PSED), one of the most widely used sets of survey data related to entrepreneurial efforts. The project collected data on the process of business formation based on nationally representative samples of nascent entrepreneurs. The dataset used in this study began in 2005-2006, followed by six yearly interviews. The information obtained includes data on nascent entrepreneurs, the activities undertaken during the start-up process, and the characteristics of start-up efforts that become new firms. Findings in the research include:
- Social capital is key to entrepreneurial confidence and, ultimately, your ability to achieve your desired business outcomes.
- For both women-owned and men-owned businesses, support from effective or influential one-time helpers has a positive effect on the owner’s ability to achieve their desired outcomes.
- All entrepreneurs have a tendency to choose ongoing helpers similar to them. This isn’t always great as it is important that your business partner has access to assets and relationships you may not have access to.
- The quality of one’s social network is more important than the quantity of the network.
- Women entrepreneurs gain more value from ongoing relationships than men.
“Our hypothesis has been confirmed – the strength and effectiveness of women entrepreneur’s social networks impacts their business success,” said Amanda Brown, Executive Director of the National Women’s Business Council. “Our message to women business owners is clear: surround yourself with people that will give you critical advice, but also connect you with those harder to reach resources and relationships. And, most importantly, surround yourself with people that will help you believe you can do it.”