Myth Buster: Women Entrepreneurs Prepare as Well as Men When Selling Businesses

But women differ from their male counterparts in three important ways, according to October study by Center for Women’s Business Research
But women differ from their male counterparts in three important ways, according to October study by Center for Women’s Business Research

RISMEDIA, November 6, 2006?Women owners of larger businesses are just as likely as their men counterparts to have a long-term strategy for selling, handing down or closing their businesses, busting the myth that women are not as prepared as men to exit their companies.

But women differ from their male counterparts in three important ways, according to the October 2006 study by the Center for Women’s Business Research, underwritten by Massachusetts Mutual Life Insurance Company (MassMutual):

While women and men business owners are equally motivated by the profitability of a sale, women are much more likely to also take into consideration the impact of the sale on their employees.

While women who previously owned businesses are well-prepared to sell their businesses, first-time women business owners typically are less so. There is no such difference among men.

And women business owners are nearly twice as likely as men business owners to intend to pass the business on to a daughter or daughters (37% vs. 19%).

The national survey, ?Exit Strategies of Women and Men Business Owners,? targeted women and men owners whose businesses were at least five years old and had grossed $1 million or more in revenues in the previous year.

?Contrary to common perception, the vast majority of women business owners (83%) have a long-term exit strategy,’ says Marjorie Alfus, chair, Center for Women’s Business Research. Further, women are like men in ranking price as the most important factor when deciding to sell their business (85%).?

However, women business owners were more concerned than men business owners about the buyer’s identity, personality, and background (72% vs. 39%); as well as the buyer’s plans for the business (79% vs. 52%), and plans for current employees (86% vs. 61%).

Another big difference: for women, the decision to sell a business is correlated to prior business ownership. Women business owners who have owned a previous business are more likely to plan to sell than women who have not (47% vs. 36%).

Women owners were as likely as men business owners to plan on selling their business (39%), pass on the business to family members (21%), or close the business (4%).

Source: Real Estate Magazine November 2006

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