A new study says the female startup founders are less likely to pay themselves a salary than their male counterparts.
According to the 2016 American Express OPEN Small Business Monitor, only 42% of women take a salary compared to 57% of men surveyed.
And get this: of the women who do pay themselves a salary, they earn an average of $17,470 less than their male counterparts.
The good news still is that this last number is a $930 bump up for female small business owners from 2015.
The salary differences are likely not indicative of business problems as women have a positive outlook overall, with 89% of women calling themselves optimists (compared to 81% of men).
Here are some noteworthy highlights about women business owners surveyed.
- Seventy-six percent plan to grow their businesses (vs. 74% of men and 75% of businesses overall)
- The biggest challenge they face as they grow their business is finding the right staff (21%), followed closely by the rising costs of doing business (17%)
- They are more likely to say they are on track to save the funds they need for retirement (58%) when compared to their male counterparts (57%) and last year (54% last spring)
- However they are more worried about their ability to save for the retirement they want than they were last spring (52% up from 47% a year ago)
- On average they believe they will need $1,040,000 to retire, $70,000 less than they estimated last year
- They are less likely to expect cash flow issues over the next six months, (33%) compared to men (39%) and last spring (46%)
- The most important priority for women business owners is keeping/maintain their current business and sources of revenue (39%)
- They are much less likely to pay themselves an annual salary when compared to their male counterparts (42%, vs. 57% of men) and compared to one year ago (down from 50% last spring)
- on average they are earning more than they were a year ago $63,590, a $930 increase
Business Outlook and Managing the Economy
According to the Monitor, women business owners maintain their positive outlook on the economy and their business prospects over the next six months (64%, on par with 65% last spring), and are equally as positive when compared to men and small business owners overall (each 64%). The most important priority for women business owners is keeping/maintain their current business and sources of revenue (39%). However, seventy-six percent plan to grow their businesses (vs. 74% of men and 75% of businesses overall). The biggest challenge women business owners face as they grow their business is finding the right staff (21%), followed closely by the rising costs of doing business (17%).
Over the last three years, women experienced fourteen percent revenue growth identical when compared to growth experienced by men and business owners overall.
Thirty-five percent of women business owners (on par with 31% last spring) are planning to hire within the next six months (vs. 42% of men and 39% overall). Thirteen percent plan to hire only part-timers, 12% plan to hire only full timers and 10% plan to hire both full and part-timers. More than one quarter say their top business mantra is “You are only as good as your people” (29%).
Addressing Cash Flow Issues
Women business owners are less likely to expect cash flow issues over the next six months, (33%) compared to men (38%) and last spring (46%). The biggest worry among female entrepreneurs is the ability to pay bills on time (10%), followed by accounts receivable (8%), having enough cash to win new business, the ability to meet payroll and the ability to accurately track cash flow (each, 5%)
Investments in the Company and Access to Capital
Nearly half of women business owners (49%, on par with 52% last spring) will make capital investments over the next six months (vs. 52% of men). For female entrepreneurs, technology investments lead the category (39%). Additional investments include office equipment (16%) and office furnishings, manufacturing/production equipment and real estate investments (each, 8%).
Find out more from Open at American Express
Jay Jay Ghatt is also editor at Techyaya.com, founder of the JayJayGhatt.com and JayJayGhatt.com where she teaches online creators how to navigate digital entrepreneurship and offers Do-It-For-You Blogging Service. She manages her lifestyle sites BellyitchBlog, Jenebaspeaks and JJBraids.com and is the founder of BlackWomenTech.com 200 Black Women in Tech On Twitter. Her biz podcast 10 Minute Podcast is available on iTunes and Player.fm. Follow her on Twitter at @Jenebaspeaks. Buy her templates over at her legal and business templates on Etsy shop!