17_jwe_1-2
UDC: 005.9:336
005.336.1-055.2
JEL: G31, L11, O11
COBISS.SR-ID: 238895884
ORIGINAL SCIENTIFIC PAPER
Financial Management Strategies of
Women-Owned Micro, Small and Medium-
Sized Entreprises (MSMEs)
Gizelle Guadalupe Macías González1
Universidad de Guadalajara, Centro Universitario de los Altos
Tepatitlán de Morelos, México
José G. Vargas-Hernández2
University Center for Economic and Managerial Sciences Universidad de
Guadalajara, Mexico
A B S T R A C T
The intention of this article attempts to take in consideration the financial and
administrative strategies and calculations carried out by the women-owned
MSMEs in a Region Altos Sur of Jalisco, Mexico. The document intends to go
deeper into the financial management strategies and women organization in the
culture of savings, investments and credits, as well as correlation established
financial resources of the company and those which are linked to their home. The
methods used to gather the qualitative research and information were made
through by depth interviews with five female-entrepreneurs and observations by the
researcher, data was collected and analyzed according to set codes and categories
in the Qualitative Data Analysis Software MAXQDA program. In general, women
entrepreneurs are unique owners and their businesses are mostly in the third
1 gmaciasg@cualtos.udg.mx y ggmg261@yahoo.com
2 Periférico Norte 799 Edificio G-201-7, Núcleo Universitario Los Belenes CUCEA, Tel y
fax: +52(33) 37703340, 37703300 ext 25685, josevargas@cucea.udg.mx,
jgvh0811@yahoo.com, jvargas2006@gmail.com
2 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
sector, although they have participation in the primary and secondary sector. Only
one woman owns having partnership with the rest of her family: parents, sisters
and brothers who own several companies belonging to the two sectors. The results
of this study showed the peculiarity and the similarity between women-owned
MSMEs interviewed and the findings of international researches according to
company sizes and ownerships.
KEY WORDS: financial management strategies, micro, small and medium
enterprises (MSMEs), women-owned business
Introduction
Women studies could be directed toward an interdisciplinary field of
study, like theory and methods. In this article it is analyzed the topic since
the approach of the business administration, economic anthropology and
finance. Girón (2012) mentioned that the most interest from various
researchers in the field of woman-owned businesses is the high rates of
growth in the number of such enterprises and their increasing participation.
This paper is a contribution to gender studies concerning the
participation of woman in business activities, in the area of access to
financing. This is one of the factors that can determine and explain the
success or failure of a business, as well as its prospects for expansion. The
object of the research is to analyze the lack of financial products for small
and medium size companies which can be an obstacle to growth and
expansion of woman-owned businesses.
To achieve the overall objective of this study first of all, a review will
be made of the main ideas raised in the literature about the woman
entrepreneur and woman-owned Small and Medium-sized Enterprises
(MSMEs): the profiles, the finances, the culture of money management
(credit, savings, investment, loans and income, and financial formality and
informality in businesses), the strategy and financial management, the
planning and the decision making, and the financial links of business and
household. Later it appears the design research, rescuing a methodology
based on qualitative method where depth interviews and field notes of five
owners of MSMEs were used.
The data analysis was performed using the software MAXQDA
(Qualitative Data Analysis Software) and the main findings were presented.
The results show that semantic networks were obtained by analyzing the
codes that were established and their repetitions, as well as some tables that
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 3
identify the profiles of entrepreneurs, enterprises, planning, decision
making, savings and debts. The intention of the networks is to create a
collective meaning of a concept with the experiences of the case studies; the
five cases of the women owners of MSMEs are presented. At the end of the
investigation a summary is made as a way of conclusion.
Profiles of the Businesswomen
Nowadays the increasing numbers of women have entered the labor
force, some of them have elected to start and operate their own businesses.
For over 30 years the interest in women entrepreneurs as research subjects
has been developed. The research of Hisrisch & Brush (1984) showed that
studies for male entrepreneurs have the same questions for female and the
risk perhaps even greater for a woman entrepreneur, who has all the usual
business problems as well as the problems associated with being a woman
in a male dominated field.
The article reported three studies about female entrepreneurs in general
throughout the United States. One study mentioned of Hisrisch & Brush
(1984) was about the new female frontier of Schwartz who in 1979, where
twenty female entrepreneurs found that their major motivations for starting a
business were: the need to achieve, the desire to be independent, the need
for job satisfaction, and economic necessity. The main point was that they
tended to have an autocratic style of management, and their major problem
during start-up was credit discrimination and underestimating operating
and/or marketing costs were a subsequent problem. Another study cited by
Hisrisch & Brush (1984) was carried out by De Carlo & Lyons in 1979, it
was about 122 black, white, Hispanic and American Indian women
entrepreneurs. They found differences between minority and non-minority
women entrepreneurs, with minority entrepreneurs reporting that they
started their businesses at a later age than the non-minority woman.
The last study that was reported by of Hisrisch & Brush (1984) was
researched for Hisrisch & O’Brien in 1981, it was about twenty-one women
indicating that they had particular problems with their collateral; obtaining
credit and overcoming society´s belief that women are not as serious as men
about business. The characteristics of women entrepreneurs varied
according to the type of business. Female entrepreneurs in non-traditional
business areas (finance, insurance, manufacturing, and construction) also
differed from their counterparts in more traditionally “female” business
4 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
areas (retail and wholesale trade). They were older and more educated than
the general society and had very supportive parents and husbands. They had
particular difficulty in gaining access to external financial sources.
The result of the investigation of Hisrisch & Brush (1984) included the
sample of 468 women entrepreneurs. The woman surveyed indicated that:
a) The biggest problems during start-up were lack of business and
financial training, obtaining credit, and the presentation of
collateral issues; these problems are also related to lack of specific
business education and work experience.
b) The “typical” woman entrepreneur is the first-born child of middle
class parents, after obtaining an arts degree she marries a college
educated man who works as a professional or has a skill. She has
children, and works as a teacher, administrator, or secretary. She
does not start her own business until the age of forty or later.
c) Her biggest business start-up problems are with finance, credit,
and lack of business training.
d) Once the business is in operation, lack of financial planning
experience is her greatest difficulty.
e) Most of their businesses are small and young with accompanying
low revenues.
f) Some women entrepreneurs may prefer to maintain small, easy-to-
manage businesses.
g) They are aware of changes in women own attitudes and goals,
including a willingness to learn finance.
h) Women need to have access to seminars about specific topics:
finance, cash flow management, preparation of business plans,
loan applications and general business organization.
i) They should avail themselves to all of the information services
now available and should seek assistance from experts in the field,
from colleagues and from friends in order to establish both formal
and non-formal networks. Experienced mentors could be drawn
from these networks to act as advisors, particularly on financial
matters.
The women entrepreneurship research of Jennings & Brush (2013)
showed the entrepreneurs often pursue goals beyond economic gain. Female
entrepreneurs do not view their businesses as separate economic entities but
rather as endeavors entwined with other aspects of their lives (particularly
their family relationship and responsibilities) in the hopes of attaining a
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 5
better balance between work and family (Parada, 2013; Macías, 2013)
(Yong, 2013). The conditions about household level, as well as family-
oriented initiatives with policies at state level, will impact the likelihood that
woman will pursue self-employment. In some cases, the reason was an early
widowhood that required some woman bring home income urgently. Having
a self-employed business was perceived as more successful by the flexibility
offered (Serna, 2003).
The case of Mexico, OECD (2012) reported that 30 percent of all
female-run businesses operate from home, compared with only 11 percent
of male-operated businesses. Mexican women are under-represented
(OECD, 2015), women hold 31% of senior management positions in
Mexico (32% in the OECD); just 7% of the members of the boards of
Mexican firms are women (10% in the OECD), and only 2% of Mexican
working women are entrepreneurs (compared with 6% of men). The
proportion of sole-proprietor enterprises which are owned by women is
comprised between 20 and 40%. The average size is significantly lower for
women enterprises in all countries with the exception of Sweden. The
proportion of women enterprises is relatively higher in wholesale and retail
trade, transportation and accommodation, while it is relatively lower in
manufacturing.
The research of Zabludovsky (2015) shows the Mexican reality, the
participation of the women-owned and directives of their own companies
has grown significantly from 25% to 36% in the period 1991 to 20133. She
considered the addition of amount of this kind of occupation and she
realizes the specific kind of woman´s work self-employed and employers
was characterized mostly of cases is related to self-employment or
lowercase units in subsistence sectors occupations. The specific amount
about women employers has grown from 19% to 21%, during the years
1991 to 20134. Women employers are the women who employ at least one
worker and themselves.
Confined to a ghetto (Berbel, 2013) where they state most of the
business woman, reinforcing the idea of borders, the term glass ceiling
(Llibres, 2013; Zabludovsky, 2015) appears. In the case of women´s
businesses in Mexico, Zabludovsky (2015) states that the vast majority of
3 Zabludovsky (2015) estimated the growing quantities about the data of Census reported
“Encuesta de Ocupación y Empleo (ENOE, 2013)” reported by Instituto Nacional de
Estadística y Geografía (INEGI, 2013)
4 Ibídem.
6 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
these businesses are small in size, the larger the company is the lower
participation of women. Therefore, government recent trends have a
tendency to support the development of women microenterprises, where we
have more women and intended to encourage the economic development of
societies through these subsidies.
The characteristics of these microbusinesses are precarious and
informal. They have formed even form new social enterprises and generate
public policy, being the case, the new Law on Social Economy in Mexico.
The analysis that the author Zabludovsky made based on the results of the
National Survey of Employment ENOE by INEGI in 2013 on areas where
women businesses are concentrated shows 30% in the service sector, 28% in
trade, 20% in industry and manufacture, 2% in the primary sector and 1% in
construction sector respectively (Zabludovsky, 2015).
Most women-owned businesses in Mexico have a family character.
These women are the motor of the family through business life and therefore
the support as a responsibility for the future of their children. The family
business is chosen by women because of their condition, they have a
flexible schedule, the possibility of conciliation of family and domestic
responsibilities are inserted in male sectors. Also in this type of family
businesses some cultural barriers are exacerbated, these family ties in their
companies are detrimental, for example, in the case of some societies to
which they belong they have to keep a low profile, occupy subordinate
positions and / or less than their male relatives ranges. However, their
responsibilities are important -and male relatives does not perform their
duties as such- likewise highlights Zabludovsky (2015), much of the work
developed in this type of family businesses remain invisible. The results
obtained from Girón (2012) about Mexican entrepreneurs women in Texas
reported that women have higher educational levels than men and the age
range of the businesswomen are about 10 years less than for the
businessmen, between 35 and 45 years of age.
The Finances of Woman-owned MSMEs
Women-owned MSMEs make significant contributions to the
economies in which they work. The resource point of the World Bank
Group (WBG) issued by the International Finance Corporation, IFC (2014)
reported that lack of finance is a major constraint to the growth of
female-owned enterprises and there are legal constraints in family law
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 7
and inheritance can determine a woman's ability to own a property and the
possibility to access to financing. In this case was important to analyze the
credit gap and IFC´s portfolio gender baseline to provide women with
opportunities to finance their businesses.
The International Finance Corporation IFC (2014) related that one of
the biggest barriers for increased access to finance women owned
enterprises is the lack of reliable data disaggregated by gender: this further
hinders the opportunity to make the business case to financial institutions on
supporting woman-owned enterprise. It is necessary that commercial banks
have a better understanding of the existing market potential as well as
constraints facing woman-owned MSMEs –at urban and rural level-, in
order to design strategies and offerings that will allow them to improve. The
research was based on the findings from the IFC´s Enterprise Finance Gap
Assessment Database.
The investigation in women entrepreneurship is essential for economic
growth. The gender equality is a strategic priority for the society. The
business opportunity of the women entrepreneurship market was considered
for the WBG, because they realized the importance of establishing a
baseline of data for access to funding. The report of the International
Finance Corporation IFC (2014) offers recommendations to support the
strategic women focus across the WBG demonstrates that increasing
women-owned MSMEs access to finance is not only good for women, but a
growing and profitable opportunity for financial institutions.
The investigations that they found at national and international level
have conducted the issue of the relationship of finance and banking culture
of women-owned MSMEs. Saparito, Elam & Brush (2012) presented a
study which examines how the gender of the business owner and of the bank
manager influences perceptions about the banking relationship. The United
States experience allowed them to realize they can have different types of
relationships according to size, sector and age companies. They found that
the female–female pairs had the lowest levels of trust, satisfaction with
access to credit, feelings that the bank had the low levels of knowledge
about their firm, and the most likelihood of switching to an alternative bank.
Using a large sample of European MSMEs, Moro & Piotr (2014)
investigated the relationship between gender and credit constraints. No
evidence is found about the bank financing, those financial institutions are
based against female managers, and since the loan turndown rates are
remaining steady rest, statistically indistinguishable across gender. Female-
8 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
run firms are however less likely to file a loan application, as they anticipate
being rejected. As a consequence, firms managed by women obtain less
bank financing. In the case of certain population groups such as immigrants
or women, researchers have noted the difficulties to access financial
services; Girón (2012) showed that the degree of bank penetration of Latin
American immigrants in the United States is very low.
The types of financing received by the women are supplier credit and
loans from relatives. Women are dependent on informal sources of
financing and most of the women established their companies based on their
savings in the United States. A contradictory case mentioned the findings
where 100% of women used banks while only 89% of men did so. The non-
formal institutions such as micro-finance institutions, savings and loan
associations, and pawnshops were not used by this group of businesspeople.
A different approach characterized by the level of attention to smaller
businesses is linked to microfinance (Bazán & Saraví, 2012; Conde, 2009;
Girón, 20015; Mayaoux, 2011; Robles C, Alviter L & Littlewood H, 2015;
Sampayo, 2008; Villareal & Angulo; 2012; Zabludovsky, 2015).
The microfinances contribute to the formation of an enterprising culture
among the persons who use them (Sampayo, 2008). Since the nineties for
the case of Mexico there are huge requests of financial services from
millions of economically disadvantaged people. Conde (2009) and others
(Alpízar, Svarch & González-Vega, 2006; Bazán & Saraví, 2012; Girón,
2015; Macías, 2013; Morduch & Rutherford, 2003); Rutherford, 1999;
Villareal & Angulo, 2012) mention that microfinance is linked to the
provision of all kinds of financial services for low-income segments.
Distinguishing the popular personal finance, administration and finance
are carried individually and the segment of low-income population that
characterize them. On the other hand, social finance has solidarity
principles. Supporting the development of social projects establishes a
relation between microeconomics and microfinance, classifies traditional
banking, such as commercial banks and social development and banking, as
linked to the popular sector and the development of micro, self-employment
and support for MSMEs medium low.
In the analysis of investigations that have been conducted cutting
microfinance and grouped Villareal & Angulo (2012), have demonstrated
that economic strategies include ways and lifestyles (status, identity,
values), their relationships and social networks. They are often an important
part of economic transactions, resources and capabilities of business and
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 9
different types of markets in which they are not always visible. The realities
analyzed reveal the assignment and appreciation of the value of the finished
product by producing and selling handicrafts, where social status interferes
in their sales. Women owner micro-business have success and struggle to
compete without appearing to be very prosperous for social effects
(jealousy) which this can lead them.
The business owners use various techniques and strategies to achieve
their sales; they attract clients to the business establishment and according to
their income allow them to make an ongoing investment in local business.
Savings preferences are linked to their accessibility, to cover emergencies
and to have liquidity. The similarities in Mexican micro financial practices
led by women show similarities in the culture of savings and credit, in its
financing, the possibility of investing in remittance income and in
homogeneities in the work of women in certain areas.
Jude (2006) mentions that microfinance is market oriented without
starting prioritizes social justice for women. Financial inclusion details
Villareal (2014) mentioning the idea of Ferguson and Yunus on access of
people to a piece of capitalism, to democratize finance and Bazan & Saraví
(2012) of monetize. Research that integrates Villareal (2014) rescued the
essence of the ideal of microfinance to associate mainly to the promotion of
entrepreneurship in order to help people purchase productive assets and
working material to start their business, but it is not always the case.
Microfinance is considered a micro level as well as the financial
amount for the content, linked to formal or semi-formal institutions, some
more social and altruistic disclaim microfinance and in the case of informal
are considered to be fostered among families, friends, credit unions,
remittance or micro banks. The average amount was set at twenty thousand
pesos (about twelve hundred dollars), and as mentioned previously directed
to sectors that do not have access to formal banking sector (Villareal &
Angulo, 2012).
Bazán and Saraví (2012) define the key triggers of ascending and / or
descending on household welfare processes. That could equally apply to
women-owned businesses. On the one hand people have a portfolio of assets
as economic, human, social and cultural capital, and on the other hand
people will have different levels of opportunity structure, e.g. utilities, type
of community, labor market, local economy, formal financial institutions,
security levels and community integration. The interaction of financial
services could be presented according to either one or several parts of the
10 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
business women, to their portfolio of assets or opportunities structure and
this would result in opportunities or constraints on firm performance
women. According to chains or relations established by women and their
positive and multiplier effects that the author mentions quoting Rutherford
(1999), relating to the initiation or expansion of the business.
Culture of Money Management and Financial Formality and
Informality in Businesses Owners (Credits, Savings, Investments,
Loans and Incomes)
The financial experts say that it is good to have a debt. They explain
that credit feeds economic growth, stimulates the production and creates
jobs (Villareal, 2004). For some credit it is linking to an undesirable
situation. The authors Morvant-roux & Guerin (2012) rescue the importance
of the concept of economic anthropology where according to this view
people borrowed and paid rebates based on their own hierarchies and their
calculation scenarios. Customers, over- indebted debtors, among others:
equally in the different characterizations credit frameworks as they arise.
The women entrepreneurship when planning a business could be found
in some barriers when making the decision to conduct a business, as regard
to financial capital there are: lack of financial capital and fear of banks.
Some studies have found that companies manage a fear of the risk of
investment in capital for financing, women used prior savings as the
primary source of funding rather than soliciting credits, for example, which
could coincide with the idea that: women have greater risk aversion (Girón,
2012; Rodriguez & Rodriguez, 2013). These authors state claim that is vital
for them to have no fear in seeking external financing, either through
investors or by a commercial loan if they want to see their businesses grow
in size. Women who did not use their own personal financial capital or that
from their partners, and therefore used external financing are those with the
larger firms in number of employees. Using internal capital – own savings
or partner’s savings- at the start-up of business does affect by the size of the
firm.
To women a man is considered more reliable for money management in
general they are good managers. According to the study (Macias, 2013) on
financial practices of woman who earn income from employment or self-
employment, it was found that woman is inclined to the non-formal sector,
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 11
to stay this way for lack of funding, and they represent their markets credit
to be semi-formal and non-formal mostly be used as in urban areas.
The terms and relationships that are involved in financial processes of
debt of Villareal (2004) could be utilized for financial administration of the
women-owned MSMEs, (See table 1). It is important to mention the
definitions of these terms used in everyday language and in the business
context.
Table 1: Terms and relationships that are involved in financial processes of
debt
Terms and relationships that are involved in financial processes of debt
Debt
It can be referred to a formal bank financing or a lender, as well as non-
formal borrowing from friends and relatives. Its use is generally
willingness to pay within a short period without involving too much
effort. A loan is a favor. People feel grateful to borrow in times of
difficulty.
Loan
It can be described as an established balance in cash or in kind (such as a
favor to be paid). There is more involved in the term commitment. A debt
should not be forgotten. The term is also used commitment this way: a
debt that involves a degree of pressure. But having a debt is not stronger.
You feel the weight of debt and struggle to liquidate.
Credit
It is commonly used for more formal relationships with banks or other
institutions. Often a notion of rights is assumed. They have the right to
receive certain funds and the obligation to pay an interest rate is
recognized. Credit can also refer to the potential of acquiring a debt.
Having a store credit or bank means that you can get a loan if required.
Aid
It can be referred to credit from a bank, but is often used in reference to
government institutions or support. It comes with the purpose of helping
specific and may or may not use.
Deal
(Fiado)
It is a deferred payment, it is used with reference to goods that are not
settled immediately, particularly at local stores or street vendors, but also
in regional shops that sell fertilizers and other agricultural inputs, and for
example, where the customer is known and reliable. The debt must be
liquidated at short notice. It is interesting to note that the term "fiado" is
used for small negotiations. Despite being a recurrent mechanism in most
business relationships, in large establishments or at other times and spaces
chains agro products marketing, it speaks rather deferred payment or
credit.
Source: Own elaboration based on Villareal (2004)
12 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
In the anthropological literature there is a popular financial strategy
called ROSCA (Rotating Saving a Credit Associations) circular ambivalent
one embodiment, a portion may be a loan and other savings. In which each
member contributes a usually weekly, biweekly or monthly - amount, and
coming in turn, receives the sum of the contributions of the participants.
Considering a credit when the shift is the first to be circumvented and
savings when is the last number (Villareal, 2004).
In popular terms these informal savings and credit mechanisms appear
in different forms; they are placed under the name of runs, raffles, pool or
cow, cundinas5 and guardadito6 (Villareal, 2004; Bazán & Saraví, 2012).
The use of non-formal financial services is used for emergency situations,
because they tend to be more flexible and less demanding negotiable
governed by social relationships, while formal are more compromising,
dangerous and strict conditions, governed by purely economic relations
(Bazán and Saraví 2012).
Challenges of women in management are shown by Villaseñor in 2004,
about the control of debt and the saving. The research over the women
group (Cooperative CAMPO in Jalisco) has participated in the management
and investment account in setting interest rates for savers. One limitation
here is the little freedom to organize their time and activities, which directly
influences the decision making. The participation of women is more intense
in the management and control resources than the access to them.
Jennings & Brush (2013) claim that in general businesses headed by
women tend to be financed at a lower level and by different means than
those headed by men:
1) Women tend to start their business with lower levels of: initial
financing and, to operate with lower of debt and equity beyond the
start-up stage.
2) Female entrepreneurs are less likely than male entrepreneurs to
use formal, external sources of financing during start-up and less
likely to utilize debt financing.
Research experiences by the authors mentioned are: cases where the
bank loan officers tended to rate women significantly lower than men. The
greater dissatisfaction was expressed by female entrepreneurs with respect
5 Circular form of savings and loan in anthropological literature is known like ROSCA
(Rotating Saving an Credit Associations) (Villareal, 2004)
6 Informal savings generally performed in the household. The microfinance market has used
its popularity and integrated it as a name for the products they offer.
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 13
to banking experiences, their lower propensity to apply for various forms of
financing and they tend to charge higher interest rates for female than male.
Strategy and Financial Management of Women-Owned MSMEs
The use of internal financial capital at the start-up of the business has
significant difference in the size of the Company. Sometimes financial funds
are obtained to initiate savings or support from parents of the owner or some
families (Rodriguez & Rodriguez, 2013).
The female entrepreneurs have preference to start creating companies
with their own personal or family loans using savings (Guzmán &
Rodríguez, 2008). In the research of Coleman (2000, 2007) was shown that
the ability to secure financial capital had a positive impact in the growth rate
of men-owned firms, but did not appear to affect the growth rate of women-
owned-firms. The programs at promoting entrepreneurship and small
business ownership among women should be designed to address human
and financial capital needs.
Similarly, the study on the profitability and financial strategies of
women- owned small businesses of Emrich (2015) showed the importance
of small business which is vital for countries and likewise the strategies they
use in their financial management is vital for countries and likewise the
strategies they use.
The fastest growing segment of business development in the United
States comes from small business start-ups, with 42% of these businesses
being women owned. Women-owned businesses are annually 25% less
profitable when compared to the average small business in the United
States. The data from the results indicated, within this one particular
context, women small business owners and their employees used financial
resources for networking, motivation, and innovation. Focusing on these
practices could result in increased profits for other women-owned small
businesses.
The research of Jennings & Brush (2013) shows that over the past three
and a half decades, there are notable differences with respect to the
strategies of female and male-led firms; few organizational and managerial
differences have been documented. Some features about women-owned
businesses run by women tend:
14 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
1) To be over-represented in the retail and personal service sectors
and under-represented in the manufacturing, extraction and
business services sectors.
2) To be more likely than those headed by mentor pursue social as
well as economic missions.
3) To be home-based and less likely to be engaged in exporting.
4) To be as likely to run their firms with a mix of feminine and
masculine approaches.
5) They are as likely as men entrepreneurs run their businesses with a
mixture of male and female approaches.
The ambitious women entrepreneur consists of having a high-growth
and a wider range of financing sources, compared to lower-growth
entrepreneurs, according to research of Gundry & Welsch (2001). In the
article of Romo & Rangel (2010) is mentioned that to have a business
strategy in terms of changes in the organization and labor relations in a
minor of terms of technological innovations.
The research of Girón (2012) about Mexican women entrepreneurs &
gender asymmetries in Houston, Texas shows a sample of 25 entrepreneurs,
28% (7) were women and 72% (18) were man. She confirms that women in
the region of Latin America often turn to the non-formal sectors and
personal endeavors to becoming entrepreneurs. The women who run
companies posted a growth rate that were significantly higher than those of
the rest of the businesses; that is including men and women. The women use
collateralized loans and mortgage loans in similar proportions.
The financial experience of companies in Jalisco is mentioned by
Arechavala (2014) because he works in a consulting business. He
demonstrates that the use of financial information is as follows: approximate
expenses and cash flows are known, but historical budgets are not funding
from the provider’s support, it injects capital when there is no liquidity and
financial statements are used to make statements to the government, not
considered in decision making by making it clear that these tools must be
handled.
Another research on financing strategies of MSMEs as the study of
Alvarez & Abreu (2008) out of ten MSMEs established in Monterrey,
Mexico state that companies use 95% of financing suppliers to represent
them at a much lower cost and in this case only two of them have a bank
financing.
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 15
The utility profits administered in various ways, Suárez (2011)
mentioned that most of the women entrepreneurs try to generate future
pension income derived from savings in fixed assets. In relative terms Girón
(2012) claimed that women invest slightly more in property or real estate in
the United States; they are more cautious and prefer to see their business
grow more slowly, unlike man. The latter could be linked to the fact that
businesswomen request fewer loans from “formal” sources and prefer to
resort to the use of their "own resources" if they require financing. The type
of financial services used by women after checking accounts is the personal
health insurance. Among the five financial services most used by women are
investment accounts, which are not included among the five most
commonly investments used by men.
In order to analyze the impact of gender relations on issues of financing
that establish women and men in the figure of businessmen and bankers,
Madill & Riding (2012) conducted a study where the research shows that
the gender of the SME ownership team does not affect either loan to
turndown rates or rates of loan application. The research does show a
significant gender difference in the length of lender-borrower relationships.
Even when controlling for age of the firm, the study showed that male SME
owners have significantly longer relationships with lenders—suggesting that
male entrepreneurs may benefit more from relationships with their lenders
than female do with entrepreneurs.
A financial practice relates to the economies of the people and
transforms their lives. People perform calculations: time, money, costs,
benefits and decisions to assess what would have greater profits according
to possibilities, restrictions and significance. These decisions are not always
rational (Santana, 2012). Such strategies at the micro level are linked to
monetary behavior which participates in batches and credit unions
(Rodríguez & Villareal, 2012).
The strategies that women business owners are worth in order to
overcome economic difficulties and seize opportunities includes on the one
hand the use of family labor, recurrent deferred payment systems and
installment sales (Villareal & Angulo, 2012) (Chaganti, 1986). Another
important fact is the effort to stretch their budget, reducing spending,
engaging in productive activities and using different types of loans and face
problems that have to cleave funds for productive projects (Villareal, 2004).
The financial experience to grant financial benefits to women who
mention Armendáriz & Morduch (2011) shows a benefit, because it fits well
16 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
with the dual goals of obtaining high repayment rates and meeting social
objectives. In principle, providing women with more capital can strengthen
their growth. Bank managers may supervise at lower cost, they are less
mobile and are more conservative in their choice of investment projects and
they provide greater reliability and security for payment of the debt.
Although it is found that young men and women entrepreneurs tend to be
more aggressive in generating employments, in the case of differences for
business men and women have different forms of credit, no involvement
was found to generate gross sales revenue.
Planning, Organization, Accounting and Decision Making
The detail of the financial management functions for business women
is characteristic of other companies, which varies according to size and
sector where they belong. The planning, organization, accounting records
and making financial decisions of companies are actions involved in
financial management. To Zutter (2012) finances are defined as the art and
science of managing money. On a personal level finance affects individual
decisions on how much money to spend in revenues, how much to save and
how to invest in savings; while in the business environment, finance involve
the same type of decisions: how to increase investors' money, how to invest
the money to make a profit, and what is the best option of reinvesting in
company profits or distributing the investors.
To make the best financial decisions the process is very similar for both
businesses and individuals. To know and apply the techniques of good
financial analysis will help to understand the financial implications of major
business decisions and equally as a consumer.
The financial terms of the business depend on the size and importance
of the company. In small companies the accounting department usually
makes the finance function. If the company is higher the finance function
normally becomes an independent office and as valued directors is assigned.
However, the staff in all areas of responsibility should have a basic
understanding of financial management functions, so that it can quantify the
consequences of their actions. An activity of hiring employees, advertising
budgets, an acquisition of technology and machinery involves understanding
financial. Every one of the actions that certainly contributes to obtain the
resources needed to succeed aspects.
Linking finance and accounting Zutter (2012) notes detailing a reality
where the counter frequently performed the finance function, and in large
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 17
enterprises, financial analysts often help gather accounting information. The
two basic differences between finance and accounting reside in cash flows
and decision-making. Counters gather documentations and prepare financial
statements. Financial managers evaluate the financial statements.
The Financial Links and Resources of Business and Household
Linking MSMEs businesses owned by women and home concerns
gender relations. The stage of the work of women, loaded with the roles of
their responsibilities that have been socially assigned, and that in the field of
paid and unpaid work has provided greater visibility. Today remains that
domestic linking woman at any stage to be located. Therefore, the issues of
reconciliation to be performed to carry out parallel appear in parallel. Some
evidence of research on women-owned businesses and the characteristics of
their owners in domestic reconciliations will be addressed from various
circumstances.
On the other hand, the document on women and business statistics in
Mexico Centro de investigación de la mujer en la alta dirección (Research
Center of Woman in Top Management) recovers the data of the Asociación
Mexicana de Mujeres Empresarias, AMMJE (Mexican Association of
Women Entrepreneurs), which makes clear that women spend more than
70% of their profit to the community and his family. Unlike men for this
purpose it represents between 30 and 40% (Instituto Panamericano de Alta
Dirección de Empresa, IPADE Business School 2013)
The representation of the increased income in families is another
tangible circumstance that is reconciled. The access of women to income
has given them a personal and financial autonomy that was previously
unknown as such. This incorporation was as entrepreneurs or employees.
The join obtaining financial resources influenced generate new dynamics in
families. Meanwhile in other incomes households allows members to have
higher incomes or revenues to continue or increase their participation in
consumption and debt cycles (Galvez & Torres, 2010) were reported. These
issues of labor, family and personal reconciliation of women have occurred
in contexts of crisis.
Moreover, issues and requirements of home care are circumstances
linking temporary arrangements to be solved on a daily basis by women and
according to different cultures these are administered to continue fulfilling
its corporate responsibilities and partner to home. The research of Nugroho
(2015) expressed: nevertheless, there are limitations in mobility for women
18 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
entrepreneurs to take care of their family and the values or customs,
especially in Muslim countries. The technology solutions can reduce these
limitations. Women entrepreneurs contributed to the household economy.
Research Design
The contribution of the gender studies and women studies to research
methodology has been from different angles. Woodward & Woodward
(2015) affirm that qualitative methods have continued from the feminist
tradition of highlighting the importance of lived experience through to
gender studies. The possibilities of the describing of lived experience and of
excluded voices, as well as understanding of dominant structures are the
means through which exclusions an inequalities are perpetuated.
In this line and according to Woodward & Woodward (2015) intend to
use qualitative research in this study based on in-depth interviews, field
notes and their analysis using software MAXQDA allowed to file a purer
reality and less biased. Considering the benefits of woman's studies and
gender about academic-based studies it was considered important to assess
the innovation in methods as well as having established a tradition of mixed
methods in response to social change.
In the case of women-owned MSMEs in Mexico there is no statistical
information available. There is no government database on women and men
entrepreneurs. There are some associations or chambers that some are
grouped. The Instituto Nacional de Estadística y Geografía (INEGI) has
some list of business entrepreneurs in the region Altos Sur, Mexico, but in
the National Statistics Directory of Economic Units, DENUE does not have
specific information by women or men owned.
It is necessary to note that, although due to the sample size the results
cannot be generalized for the total population of women-owned MSMES.
This investigation seeks to serve as a reference framework for identifying
the characteristics and gender differences of these businesspeople, uncovers
lines of discussion, and generates broader studies whose samples are more
representative of the universe of women-owned MSMES.
This study will seek to account for financial and administrative
strategies and calculations carried out by the women-owned showing
evidence of an approach made with owners of five businesses that are in the
state of Jalisco, Mexico. And the results will be compared with the major
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 19
issues raised concerning the differences in the characteristics of women-
owned MSMEs.
The transcript of the interviews was done and was analyzed according
to certain predetermined codes. The information was compiled and verified
pertaining to each case and presented widely in a semantic network that
brings together the collective vision of the concepts related to the financial
management of the owners of MSMEs.
Results
Semantic networks are presented on a pair with the characterization of
the five case studies, on the financial management of the owners of
MSMEs. The networks are derived from: the profiles, the finances, the
culture of money management (credit, savings, investment, loans and
income; and financial formality and informality in businesses), the strategy
and financial management, the planning, the decision making and the
financial links of business and household.
Profile
The results on the demographics and profile of each business owner are
discussed in the following tables.
Table 2: Profiles of women-owned MSMEs
Profiles of women-owned MSMEs
Professional
activity
Origin
Level of
education
Age Sons
Marital
status
Role in
the
ownership
of the
company
Role in the
company
Linking or family
support
Brothers,
sisters or
parents
Couple
Poultry
woman
Altos
de
Jalisco
University
(not
finished)
30 -
40
4 Widow Owner Manager Yes No
Merchant Altos
de
Jalisco
High
school
40-
50
3 Married Owner and
partner
with her
sister
Co-
administrator
Yes No
Hair stylist Altos
de
Jalisco
High
school
30-
40
3 Married Owner Manager Yes No
20 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
Profiles of women-owned MSMEs
Shareholder Altos
de
Jalisco
Bachelor´s
Degree
40-
50
2 Separated Partner
with her
father and
brothers
Shareholder,
manager and
Co-
administrator
Yes No
Veterinary Estado
de
México
Masters
student
40-
50
1 Separated Owner Manager No No
Source: Own elaboration.
Table 3: Family environment and personal career in business
Professional
activity
Family business Work experience
Poultry woman Father and brothers 18 months responsible owner and administrator
Merchant Brothers and sisters 11 years employed and 18 years owner and manager
responsible.
Hair stylist No 2 years employed and 14 years owner and manager
responsible.
Shareholder Father, sisters and
brothers
19 years owns and operates business herself and 10 years in
the family business.
Veterinary No 15 years of owning and manager responsible.
Source: Own elaboration
Company Features
Table 4: The company features of the studios cases are different
Company features
Sector
Economic
activity
Location
Number
of
employees
Size
Company
Overview
Relatives working
Primary Poultry-
woman and
livestock
Altos
Sur de
Jalisco
18 Small Three farms
in total (two
are rented)
Two brothers
willingly help
Thirdly Footwear
trade and
leather goods
Altos
Sur de
Jalisco
2 Micro-
enterprise
Two
boutiques
Her sister is her
partner
Thirdly Beauty shop.
Aesthetics
Altos
Sur de
Jalisco
3 Micro-
enterprise
Beauty
shop
Her nieces
Secondary
& Thirdly
Meat
processing,
purchase and
sale of meat
(butchery) and
leasing
Altos
Sur de
Jalisco
126 and 8 Small –
micro-
enterprise
Meat
processing,
purchase
and sale of
meat and
leasing a
ballroom
Her brother is the
director of the
processor company,
sometimes she
replaces her brother
and she is always
responsible of
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 21
commerce.7
Thirdly Veterinary
services
Altos
Sur de
Jalisco
1 Micro-
enterprise
Veterinary
clinic and
pet stylist
No one
Source: Own elaboration
The Strategy and Financial Management of Women-owned
The semantic networks show key concepts constituting the frequency
of repetitions of the interview on financial strategies of women-owned
MSMEs8.
Figure 1: Networking. Financial management strategies of women-owned
MSMEs
Source: Own elaboration
7 The interviewed mentioned that the percentage of participation of actions of the members
of the family is different for family tradition to men than to women. If the partner is a son
(man) the percentage has a significant difference much larger in relation to which it
corresponds to the daughter being a woman. Preference is given to man to be the director of
the company by the fact of being so. Officially he is the director.
8 In the figures that contain semantic networks of financial strategies, savings and credit,
appear in parallel of each key concept quantities between parentheses. These amounts
represent the total number of times that these concepts were mentioned in the comments
made by the five women interviewed.
22 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
Information of respondents about financial strategies used in business
detailed below naming them in the case studies according to their
professional activity as entrepreneurs.
1er.Case: Poultry woman
She manages all her company's financial and brothers willingly support
her, one in construction, personal management and planning and other
issues in veterinary medicine. She checks several times a week every
chicken shed, monitors from the light, food, water, leaks, she can notice
when workers do not do things, etc. She sends the egg freight orders to
various cities. She modified her farms and moved the same staff. She
always brings business money to cover expenses that are offered out of the
business bank account. She used to listen to her husband that if the business
goes wrong she had to invest not much but only the necessary. She takes
control in office (write down her sales in a notebook, she has on files her
records), makes calls to the sales office in Guadalajara city -to which she
will monitor once a week and in the evening she revises invoices and checks
as well as her calls. She uses the internet bank, and makes notes in her
notebook. She uses email and WhatsApp. She says it is a wonder to
communicate with her customers and suppliers.
A salary is not assigned for her. She values the flow enough to buy or
invest in pastures for example. She has several relatives with different
professions who advise her in the areas needed. She listens and makes her
decisions. She says her workers are her team, she motivates them. Almost
all of her employees live in houses which were built in her farm. If the team
workers do not work, she goes to work as a secretary with her father, but the
question is what they will do in the future without job? As being so close to
always knowing the reality of her company, so she knows what she has,
where it is and how she cares. She started with two hen booths, now she has
six.
2nd. Case Veterinary
She first takes her debt costs, syringes, light services, income and
salaries that she must pay, representing the base, to realize that more money
should go. At first she did not know how much to charge, earnings were
noted only she worked to remove costs, her mini-salary was only given to
survive, not to live. She writes in her notebooks utility rates she receives.
Records per day are made and compared -as realized the best times-, and she
makes promotions reviewing laboratory offers. Everything is handled in
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 23
cash. She put aside part of her money to buy a computer. When she sees his
brother, he lends her some money, and not with a bank deposit, because it
charges taxes. There are providers that let her team up and they allow her to
make a deferred payment one month later, this is a supportive financial
service for her.
At veterinary supplier exhibitions she only pays the half of the
equipment she is buying at that moment and the other half is financed.
Every year she does the same and sometimes she has higher costs and
sometimes these can be paid in cash, this transaction is important because
the more services are given, more opportunity to make a profit. For
example, the x-ray service was done through an intermediary, not now
because she bought this machine. With duplicate equipment she intends to
open a new branch and renew the current business. Her salary was not
assigned before. Sometimes she lends money to the business, and
sometimes it is no longer charged.
Everything is performed at an empirical level since she has knowledge
of administration, however she thinks to be important to get a master on
business administration, therefore she is studying this now. When she needs
money to grow she asks her brother. Prices are in dollars, such as
chemotherapy, where the price moves in the exchange rate and she sees that
charge so it is not as expensive service. She has not been able to raise prices
because of marketing competition but she offers more services to make
money. She performs the medical work helped by her assistant, and both
also do the pet stylist service. In the notebook she does the expenses and
profits calculation using a calculator.
3rd Case: Shareholder
The shareholder woman said she is bad for finance. The operating part
of a company is what she likes most: “what is missing, what is needed,
customer services, quality of products, supervise and look for errors. You
cannot leave things; you have to be well tuned that everything is just right.”
She is always checking the competition, trying to have little lower prices.
Her sister makes all payment processes. She waits until the month is over to
generate new strategies; with vendors she pays attention how they are
selling and how to be supportive in order to have better sales. She worries
about to prepare the breakeven to know how to keep it.
All the company life, where she is a shareholder, has had a bank credit;
this has used it from the beginning by her father. He says: “It is important to
24 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
have an open line in banks because you cannot have a bad image with the
providers, because the company earns more if it pays cash to the suppliers
and it is the opportunity for best prices.” Sometimes the government has
supported her company. She is seeing all the time on the computer the
amount that the company owes and the money it has. She is checking the
inventory. Sometimes they have received government support. Since the
company was formed in companies and she is a member, each member
receives a fixed amount at a certain time.
In the previous business (a shoe store), she was the only owner, she
went to bankruptcy, because she had no shoes and she had no money to pay
suppliers. In the new group of company, the personal meets when it is
needed, usually every Friday and someday if it is necessary. She does not
have need to work, but prefers to do so. She proposes strategies to her
brother director and the manager, they are a team. If the company needs to
borrow money, her father has always told them that they should only get 10
% the value of the company; it would be as much to ask. She believes that
businesses are not made with relatives and friends because feelings are
involved.
4th. Case: Hair stylist
She administers by herself, in her notebook records the services
makeup, hairdresser, etc. and calculates a percentage of what was spent on
materials and labor, and thus she calculates the profit; so she learned to get
profit in the job where she worked before. From Monday to Wednesday she
pays material suppliers or basic services, she puts in a small can or container
the money that she makes in the week and the profit after paying expenses.
If she has surplus money after making payments, she takes it to invest or
takes it for what she wants. On Saturdays she pays salaries and hers too. She
gives to her accountant the receipts of the expenses.
About the profit of the beauty salon, she sets aside money for saving in
a tanda (ROSCA), and each year or six months she buys with this money,
which she collected in a tanda, some materials for the beauty salon like a
chair, among others. She estimates her inventory of materials and when she
has 10 percent of them, she asks for more products to providers. She does
not have inventoried her necessary things to work; since these materials are
tangible she can calculate when she will need more. She began to sell beauty
materials, but her customers no longer visited her by not paying their debts
about materials and beauty equipment.
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 25
When there are not many customers, she agreed with her employees to
have that day off and later they will reintegrate it. Her providers give her a
month to pay. With the profit of her job, the family and she go on vacation.
Her clients are from different cities in Jalisco either she visits them or they
go to her beauty salon.
5th. Case: Merchant
The merchant interviewed and her sister works together in their
business. The respondent commented that she has more profile for sales and
purchase of goods; she is more administrative, she makes payments,
accounts records, etc. Her sister likes to treat customers and sell. They
separated their boutiques one for each one. She had an electronic inventory
system but can no longer handle it, because it is not updated. Some products
sold are imported and the exchange rate affects the cost about shoes. Last
three years she has lived a very difficult situation, because she does not have
much profit, she said that her money depends on the debt of her clients.
The profits that were obtained each month are removed at the end of
the year. She participates in exhibitions every six months; she takes pictures
of products and orders records. In her notebook she writes down the orders.
She purchases a minimum of shoes from suppliers because if she does not
buy constantly the providers will no longer sell her. She makes calculations
about how much she has to ask to the bank in order to pay her suppliers. She
posts pictures of her new products and asks for promotions to her suppliers.
Out of season she makes a sale of the last remaining items. She feels limited
in her store, because she has a small warehouse for her products, but she
also says that she does not need more if there are not many sales.
Planning
Table 5: Planning
Planning
Poultry woman
My philosophy is if I win ten pesos I will reinvest the money, I will save it and money
will accumulate. When business is not giving me to reinvest or to hold the same, I have
to put money of my savings -my guardadito-. The vaccination and blood schedule
helps me to know that the hens are fine.
Merchant
She performs a planning. There is an exhibition every six months, in which she goes
and asks for all the products for season. She takes pictures to the products
26 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
and she asks her suppliers all orders, she makes a record of her order, what products
(shoes) she will receive and what is needed, she said “to check whether I asked more or
less products.” She performs strategies to sell off products which are already off-
season.
Hair stylist
She manages her inventories and orders the products according to the season either
high or low. She purchases machinery and accessories in the beauty exhibition. Then
she plans to withdraw profits for personal expenses, but it depends of the money
recollected according to the services that she requested.
Shareholder
She is aware of the plans of the company in the long term (projections), she takes into
account the record of the historic numbers and she knows what will be needed for new
investments. She believes the company is well structured for everyone's support. She
has a budget currently to start another business and now she tries to find the best long-
term option. She makes planning strategies at the end of the month based on analysis of
statements and behavior values for sales promotions.
Veterinary
She makes promotions in times when there is little work flow, like a hook to pull
customers. Her clinic has grown to avoid relying on externals, for example now she has
her own x-ray equipment. She is accessible to her customers and when a consult is
expensive, she asks for the money by parts, first the application of vaccines and after
the consultation. She brings planning and managing fixed prices, where the haircut
charges the same for many years.
Source: Own elaboration
Accounting and Decision Making
Table 6: Accounting and decision making
Accounting and decision making
Poultry woman
She is responsible for the financial (money), her brothers support her in making
decisions. She registers in logs data of the week, taking into account the sales of egg
and payments. She has a record in a calendar of blood samples and vaccines for
everything are well. She has binders with sale invoices and bank statements.
She reconciles the bank statement to allow her to know her earnings. Her brother
brings the variability of costs, they have historical records; she does not have this
knowledge but she does mental calculation and she understands them. She has an
accountant who handles tax paperwork, payroll and social security.
Merchant
She delivers her accountant registration policy stapled with the check and the bill, she
records the report of inputs and outputs. All sales are invoiced. She manages banks and
checks the outputs by invoices. She is supported with funding from her suppliers. She
used an electronic system for accounting, but she did not upgrade it, because it came
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 27
with flaws. Each year, she performs conciliations with her banks, suppliers and
customers, and verifies her inventory, to know her profit. She manages product lines to
calculate cash sales.
Hairstylist
She keeps track of orders to suppliers, writes everything down in a notebook. She
participates in savings with her friends and family: tandas (ROSCA) to purchase
products on credit and to purchase raw materials from suppliers. In the exhibitions she
buys in cash with the money from her savings –guardadito-. The accountant is only
responsible fiscally and registers her expenses. Financial statements are required only
in special situations, such as when she would arrange a visa or when her husband and
she asked for credit. She manages her daily notes and income.
Shareholder
In the butchery business she is in charge of giving results, she is in charge of sales. One
person performs the income statement and she analyses the register monthly. She pays
attention on the profit or loss that has each month (must have a good margin by each
product because it is difficult to make a profit because the costs are very high) and she
performs comparisons for periods of time. Suppliers of other products take them to the
butchery for free consignment sale. In the meat processing company, she is responsible
for directing the sales agents, their spending and selling. Her receptionist records the
movements and she values the proceeds to take action and implement strategies. She
authorizes and checks payments. Time ago when she was the total responsible of the
company of meat processing (when her brother was not the director); she decided on
the purchase of equipment, on the acquisition of domestic machinery or imported. She
and her manager always researching all information about the equipment, because in
the beginning she knew nothing.
Veterinary
She separates fixed and medicine costs and the sale of accessories. She has medical
fees for services. She keeps a daily control of customers and is organized by month to
perform comparative. Her suppliers provide the products and then they charge her. She
logs all movements in a notepad (inputs and outputs), which are only kept for two
years. She has an empirical knowledge about. She estimates the cost of certain
equipment and substances in American dollars and informs her clients to avoid money
exchange loss. She has identified the seasons where there is greater workflow. She
makes savings by periods to buy fixed assets. She uses the self-financing with her
suppliers. She tries to avoid relying on external factors, to reach accurate diagnoses and
maximize profits.
Source: Own elaboration
28 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
Savings
Figure 2: Savings
Source: Own elaboration
Table 7: Savings
Savings
Formal savings Informal savings Saving to invest
Poultry woman
She says: “I have very good
advisers in the bank”. She
bought a debt to the bank,
but she did not like it. She
tells that she did not have a
profit or a loss, after that
experience she thinks it is
better to have a traditional
saving.
She does not like. She would make a bank
withdrawal when there is
fixed term and only if she
has the sufficient amount
which allows her to buy
land.
Merchant
She has never managed bank
savings.
She collects earnings
monthly and at the end of
the year she decides what to
It is just the savings
because it is not
reinvested; someday “I
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 29
do, she uses only one batch.
Her savings in dollars no
longer exist because She no
longer has foreigner
customers.
would like to invest.”
Business does not give
enough profit.
Hairstylist
She had a savings account,
but not anymore.
She takes part of her salary
for savings –tanda-
(ROSCA). In a bowl she
keeps her daily earnings.
The savings of tanda
(ROSCA) is an
investment in 6 months,
used to buy something
for the beauty salon,
when she needs
something during the
year she takes a credit to
pay it one month later.
Share holder
She likes to save.
For several years she has
saved in dollars for a
scholarship for her children.
She does not like The
savings named: tandas
(ROSCA). She always likes
to have a saving, she calls it
colchoncito9 “a little
mattress” (a colloquial word
to name a small saving at
home). She has educated her
children teaching them the
importance of saving.
There is an authorized
budget; I am looking to
buy a farm.
Veterinary
She says: “At the beginning
I used to save in the bank,
later I noticed that the bank
does not give absolutely
anything, and besides it
gives you deadlines. I have a
part of my money on a fixed
term, and I did it with the
intention of not spending it”.
I am keeping bills in a bag. She saved money to pay
and to reinvest. She
attends a congress every
September where she
buys equipment by giving
a half of the total amount.
With her savings she
bought a land.
Source: Own elaboration
9 Prevention for difficult situations, especially in the economic aspect (saving money for
contingency)
30 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
Debt
Figure 3: Networking. Debt of women-owned MSMEs
Source: Own elaboration
Table 8: Debt
Debt
Poultry woman
She said: “I do not like the savings of friends or family –tandas- (ROSCA) because
once I did it and I did not do well”. My dad taught me: “daughter if you have
money, spend responsibly but have a small saving, never spend what you do not
have, never buy in installments, if you have money buy if you do not have money
do not buy”, then I am not friendly with credit cards. If something might happen
someday I would ask my dad to lend me and then I would pay with my investment.
My plan is to have that money saved that is my savings, my colchoncito “little
mattress “(small saving). I hate being in debt or to pay interest, I do not need it; I
am not friendly with paying money.
Merchant
An occasion she used the personal credit of her husband to pay a debt, but her
husband says that it is better to have her own credit, then she got a credit card, she
has her payment schedule. She sends even small amounts of debt payment to each
supplier so they continue considering her as a good client; she tries to be fulfilled
in their credit payments. She says each person can earn a credit and decide whether
to continue this, or not. "I can afford it when I want and have it when I need it, I
have a credit limit and I will only stop at the bank, and I will make a withdrawal.”
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 31
Hairstylist
She says: “If I will buy something on credit, I will just buy one thing, I do not
purchase several, I buy only what I can pay for that month.” She has debts but only
the receipts that she has to pay to her suppliers. Her sisters sometimes lend her
money, but not a business loan, a personal loan. “Once I owed money to a friend, it
was very difficult. On another occasion I wanted to ask to the government for
money, to change the beauty salon, furniture, dryers, but I did not because it was
too hard and finally I did not get the money.”
Shareholder
She says: “as a person I have no credit or I do not like going into a debt or to have
to pay credit cards or anything. My dad gave me the money when I needed. My dad
advised me not to go into debt. My father always used in his life bank loans, but
always previses the amount of the debt ratio. The credits are a must; you always
have to have open lines of credit in the bank. Her dad said that "money in the hand
has other price and it is better to pay everything in cash."
Veterinary
She says: “I have a list of customers who their payments are due, I consider them a
loss. Sometimes my brother lends me money but I always pay him, the loan from
him is what has helped me to grow. Although it is slow but a steady pace and not
indebted. There are companies that finance me several months to be good to pay,
they leave me the equipment for several months and support me and I will pay
them”. She sees a bank loan for big purposes that could be to buy a car, a house or
something bigger, she used it to buy a car, and in the case of cooperatives she could
use it for something small.
The Decision Making and the Financial Links of Business and
Household
Table 9: Business connection between home and personal issues
Business connection between home and personal issues
Poultry woman
She receives money from several companies to cover their expenses. She spends
money from the sales for home expenses and gas, she has to get invoices. “School
tuition is paid from fiscal bank account, so this also goes to expense account farm.”
Merchant
She says: “I have no salary for my personal use. I do not take money from the
business. The salary could be spent on the phone that I pay. If my daughter needs
money from the business, she knows she cannot withdraw more than a hundred
pesos (about more than five American Dollars). The profit gives me for personal
expenses and to bring some money in my bag, it does not give me enough to eat.”
32 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
Hairstylist
“I take my salary of my business because I have my expenses from my saving –
tanda- I take my salary on Saturday. I involve the money from my home and from
my personal expenses, sometimes my husband asks me to help him with the beauty
salon money. I also support my home and my family, and there might be a profit.”
Shareholder
She has salary as a partner. Her daughter and son are students but they work days
off and holidays and receive payment from the company. In the former job she
spent all the profit in the business, she had to support home, she sold shoes, clothes
, etc.
Veterinary
When she started the business, she began to finance it with her own money. Then
she realized it was a mistake. She already has his salary and sometimes lends to the
business and does not charge it. Her profits are obtained from the surgeries, her
business support her. Her business is next to her home, so both have the same
expenses of electricity, water and telephone.
Source: Own elaboration
Summary and Conclusion
In conclusion, based on the results from the sample obtained being
studied, it can be reported that the women-owned MSMEs are between 40
and 50 years old. Most of them studied high school.
They are the only owners of the business or share a partnership with her
parents, brothers and sisters. Only two women entrepreneurs live with a
partner at home but the couple is not linked to the business of the
entrepreneur and their family supports their businesses. Three of five
women entrepreneurs have family entrepreneurs, most of these women have
more than fifteen years of work experience. Some women began their
professional career as employees in companies and now they are owner of
businesses, categorized according to size: micro, small and medium. Most
are in trade and services and the rest in agricultural and industrial issues.
In MSMEs owned by women relatives work in one of the business
without compensation, only for supporting her sister. In the other businesses
most consultants are relatives who have a payment as consultants. Strategies
for financial management, calculations, association with money, savings,
credit, financial behavior and perceptions of investment of interviewed
women entrepreneurs have similar features.
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 33
In other studies, about women business owner, as manifested they have
an aversion to risk, some of them continue using banks daily. It is a situation
that has already been submitted for several years. Most are alerted to the
recommendations of external, like family, to overcome their knowledge in
the area of administration. They stay in tune to perform hard work, however
it is required to perform monitoring efforts and be aware of what is required
at all times, without fixed schedules or hours that they cannot consult. Some
of them have to do their calculations in dollars for raw materials and
equipment, trying not to have a loss in the exchange rate without affecting
their customers. All women are managers responsible that everything is in
order, and they have valuable knowledge to promote or implement
marketing strategies as required.
Although several years have passed from the first studies, about thirty
years, features and profiles of entrepreneurs remain the same. For some
entrepreneur women going to the bank represent an undesirable situation, to
request money. They set their records in time to reach comparisons between
seasons and dates and zooming to a reality. Decision-making is made by
entrepreneurs who understand financial statements and in some other cases
there are businesswomen who do not understand them. They value their
registers in books or computer, or on file folders and can know at the
moment registers and inventory accounts. For four businesswomen their
accountants only organize the documents and financial statements and make
tax payments. Shareholder entrepreneur can analyze and propose action
strategies based on the analysis of product lines and their ups and downs.
The culture of formal savings from investments and managements of
banking account development occurs only in proprietary business more
affluent. For most women who have microenterprises to save in a bank
represents at no time an option to deal with a financial crisis or even to have
a profit, bank account is not an opportunity. On the contrary ambivalence
occurs, entrepreneur women attending informal savings mechanisms as
batches, the stash, the bags etc., save gradually. And whenever possible
monthly savings contract commitments to purchase fixed assets or
equipment they need to improve their business or services they offer.
In the case of credit, it is re-submit the same trend. The entrepreneurs
of medium and small level have the opportunity to acquire credits, but they
show a familiar culture in which they learned that the loan is presented
individually and not a viable alternative because they have been taught that
if you do not have enough money to buy goods on all intangibles, it is not
34 Journal of Women’s Entrepreneurship and Education (2017, No. 1-2, 1-39)
considered purchase by credits, no money to pay for interest in using this
money, because the cash always has another price. Except in the case of
very heavy investment as a new business, they could be considered as
necessary supported by bank loans and a family loan.
The micro entrepreneurs present another picture, a different opinion,
two of them mention not to use government support for all the tedious paper
work and embarrassing for those who function as collateral requirements.
So credit facility used as batches and ultimately the financial support of
credit with its suppliers. Suppliers of raw materials and resources that
require daily and pay on time and where the provider supports them or
expects them to do some more. The support of her family remains a
valuable contribution that allows them to grow. For the case of a small
business owner she accepted that is already very familiar with bank loans to
MSMEs.
Linking business with household and personal incomes remains at all
times. The owners of MSMEs do not hesitate to make a mental separation
and some records as well as strategies to separate them. But by the nature of
the tuition accounting, when ample gain can pay some issues of food or
daily, or sometimes vice versa, micro level entrepreneurs sometimes invest
in their business with other revenues, but their frame calculations no longer
consider that there is a mental separation of the two records. The
methodology allowed knowing in depth the details of finance and
administration of financial resources to perform the business owners, the
commitment they have to create jobs, taking care of their self-employment,
their businesses, their good credit history with suppliers, family and banks.
And the opportunities that they generate for growing strategies,
promotions in their businesses and to keep the support of other resources
such as family loans and their perseverance and responsibility in their role
as owners, managers and supervisors of their business. Similarly, the
financial and business culture which encourages developed by their family
who support them with their work, guidance and resources loans.
Interestingly the participation of women in business remains outside of the
two companies that have a proprietary husband. As mentioned above the
relationship reaches the moral and financial support recommendations in
credit history among others.
This research allowed to address a thorough review of related literature,
that has conducted over the past thirty years, from the entrepreneur
businesswomen, since sociological, anthropological and economic approach
Gonzales, G.G.M., et al., Financial Management, JWE (2017, No. 1-2, 1-39) 35
and it tried to have a first pilot approach to verify the current situation in a
territory of the state of Jalisco, Mexico, corroborating that they have similar
characteristics among themselves and with entrepreneur women from
different nations.
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Article history: Received: 30 March, 2017
Accepted: 14 May, 2017