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Reality check: Study reveals why women quit in entrepreneurship

University of Auckland reveals the true reasons why women are quitting their businesses in a recent study by researchers Dr Janine Swail at the university and Dr Susan Marlow of the University of Nottingham.

For many, owning a business is a dream. But in a study titled “Gender and entrepreneurship: why women quit” by the University of Auckland, researchers Swail and Marlow revealed a lot of women leave their businesses not due to financial or performance issues but because of the emotional toll.

Both Marlow and Swail undertook in-depth interviews with 16 female founders in the UK to understand why they have left their businesses.

Results showed they left due to personal reasons such as caregiving responsibilities for elderly parents. Of those who were interviewed, almost all say they had left or sold their business because of their plans to have children.

But alongside caring responsibilities, Swail and Marlow also revealed a lack of work-life balance was another key reason women decided to sell or leave their business, especially if they had used entrepreneurship as a route to more flexible working.

Read more: What are Kiwis really doing when they work from home?

When it comes to entrepreneurship, there is a popular perception that it comes with a decent income and an offering of flexibility, but Swail says this can be dangerous.

“There needs to be a more nuanced view of entrepreneurship and self-employment, and people need to have difficult and realistic conversations in their households about what it takes to set up and run a business, especially when you have, or are considering, a family,” says Swail.

Marlow and Swail add that the 16 participants interviewed had “strong negative emotions” following their exit, due to feeling like they failed in their venture.

“Entrepreneurs, particularly women, need to be in relationships where they feel supported in terms of caregiving and finances. This is a conversation we don’t often have openly in start-up ecosystems,” adds Swail.

The study looks at how entrepreneurship and self-employment is seen in New Zealand and how it may be creating an unrealistic example for budding entrepreneurs.

Both researchers say support organisations and government policy initiatives should refrain from presenting self-employment in a simplistic and overly optimistic way.

“Governments have a responsibility not to reproduce arguments that entrepreneurship is beneficial for all because it’s clear that for some women, who are at a certain point in their lives where caring responsibilities are large, there’s the potential for this route to be financially and psychologically damaging,” they say.

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