Women running small enterprises are more likely to join formal employment if they were not in business compared to their male counterparts, a new report says.
The report by the Financial Sector Deepening (FSD Kenya) also shows that more men, compared to women, spend their time on business-related activities.
However, profit is still the major measure of success for both genders in business.
The report dubbed Kenya Country Data Overview: Data from Small Firm Diaries documents gender perspectives of small business owners in the country.
The study was conducted in three sites namely Nairobi, Kisumu, and Kwale and 155 firms participated in it.
The report analyses time use, metrics of business success, and alternatives to small firm ownership between female and male enterprise owners.
Management of finances
The report notes that when asked about specific business practices, women reported the same levels of confidence in their specific business skills as men.
It gives an instance where about half of both men and women reported a 'very strong ability' to manage financial accounts.
"Of note, and deserving of additional investigation, is that one of the few places where we do see large differences between male and female owners is in their time use reports," the report says.
It notes that across the board, men report spending time on more business activities over the prior two weeks than women.
"Note that this is not a report of the amount of time spent, but the number of activities on which any time was spent," the report adds.
The business activities in question are production, sales, people management, inventory management, accounting, maintenance, strategy, marketing, none, and others.
The question posed to the business owners was: which of the following activities did you spend time on in the past two weeks?
Profit as a metric for success
From the responses, 63 per cent of men spent their time on production compared to 29 per cent of women. On sales, more men, 42 per cent, spent their time with 21 per cent for women.
It was the same for people management at 35 per cent versus 12 percent and inventory management at 24 per cent vs 13 per cent both in favour of men.
"The disparity in reported time use, however, is not reflected in differences in how the owners measure success. Profit was the most important metric for both men and women," the report says.
On measures, it adds, that could be expected to skew significantly towards women ("having enough money to take care of your family" and "overall happiness"), there were only small differences.
"The only measure where there was a marked difference was "how busy you are" with men considering busyness as a success metric at a rate more than 10 percentage points higher than women," the report says.
On the metric of business success, both genders were in agreement that profit is the main measure at 87 per cent for men and 92 per cent on women.
Revenue was a measure of business success for 75 per cent of men and 77 per cent of women.
It was only men, 43 per cent compared to 31 per cent for women, who though 'how busy you are' is a measure of business success.
Formal employment
As businesses are seen as a way to be free from the traps of employment, the report does who that women enterprise owners are more likely to seek formal jobs if they were not in the trade.
This was informed by the question: if you were not running this business, what would you do instead to earn income?
The list of responses was: run another business in the same industry, run another business in a different industry, take up agriculture, take a salaried job, do casual labour, take an informal job, nothing and other.
Of those who opted for taking a salaried job, more were women (17 per cent) compared to men (nine per cent)
Some 25 per cent of men and 17 per cent of women responded that they will run another business in the same industry, while 23 per cent male and 23 per cent female said they would run another business in a different industry.
None of the women would do casual labour compared to five per cent of men who had that as an option.
The firms in the study were from three industries: light manufacturing, ari-processing and services. Half of the firms were engaged in small scale manufacturing like carpentry, metal works and construction materials, 20 per cent in services like bike repair and maintenance and 26 per cent in agri-processing like meat and fish preservation.
A similar study was conducted in Nigeria, Uganda, Ethiopia, Indonesia, Fiji and Colombia.
Reasons for starting a business
The researchers used time use, metrics of business success, and alternatives to running their businesses to measure entrepreneurial confidence and performance.
"We wanted to understand if firm owners of different genders had differing motivations for starting a business that might affect their management practices and performance. Most of our sample opened their business due to the need to earn a living, usually driven by difficulties finding jobs," the report says.
The second most common reason for starting a business documented in the report was the desire to be independent from an employer or own a business of any kind.
"Women were more likely to be driven by the former (56 per cent open their businesses out of the need to earn a living, compared to 45 per cent of men), whereas men were more likely to be motivated by entrepreneurial drive (27 per cent versus 13 per cent of women)," the report says.
Perhaps due to differing motivations for opening the business, the report says, when firm owners were asked what they would do for income if they were not running their current small firm, researchers saw that women said they would be more likely to take a formal job, while men said they would be more likely to try to start a new small business.
"There are several possible explanations for this disparity, including that women may find it harder to secure the necessary capital to start a new firm, or that the women who have run employer firms are more employable in the formal sector due to the same factors that allowed them to start and run a small business," the report explains.
