Released April 27, 2007

BROOKINGS, S.D. - South Dakota State University research suggests women entrepreneurs in rural South Dakota define success in terms of their role in their communities, not simply in terms of profit.

That’s one of several surprising findings in one of the first studies to focus on rural women entrepreneurs in South Dakota. South Dakota State University economics professor Carol Cumber carried out the research with the help of graduate student researcher Abbigail Meeder.

“Traditionally, when success in running a business is defined, there tends to be an automatic assumption of financial success — how much profit have you made,” Cumber said.

The SDSU survey of rural businesswomen challenged that assumption.

“We found that the most popular response was that they defined themselves as being successful if they were helping others,” Cumber said. “That was followed by contributing to family income, and making a profit was third.”

Cumber notes that of 110 rural women entrepreneurs who completed the survey, almost all of them defined their businesses as being successful, even though one business owner reported making only about $1,000 in annual gross sales.

Federal Hatch Project funding made available through the South Dakota Agricultural Experiment Station funded the study. It will very likely lead to further work focusing on rural women entrepreneurs in the state, Cumber said. It’s important research because women are at least half owners in 54.5 percent of all privately held firms in South Dakota, she noted.

In addition, the number of majority women owned businesses in the state increased by 45.6 percent from 1997 to 2004, to a total of 17,833.

Cumber said another surprise in the study is that South Dakota women didn’t view their rural location — living in towns, cities, or areas that meet the statistical definition of rural, or fewer than 2,500 people — as a disadvantage.

“The literature suggests that being in a rural area is often negative. It may be negative in terms of many rural businesses finding it difficult to obtain different services like advertising or legal aid, accounting, or banking services. Also, rural areas tend to face more of a technology lag, for example, with cell phone service or high-speed Internet, things like that.”

Yet the SDSU study found that fewer than 22 percent of survey respondents felt that a rural setting had a negative impact, with 55.1 percent of respondents reporting that a rural setting overall had a positive impact.

“The one thing we really found borne out is that rural business owners can benefit from the strong social ties of the small community,” Cumber said. “People know each other, not just as the business owner, but perhaps they go to the same church, or their children are at the same school. So there’s that support network which turned out to be a very positive aspect for rural women business owners.”

Another surprise: Rural women entrepreneurs in South Dakota did not view their gender as a disadvantage.

“A lot of times what we hear is that women face discrimination, they find it harder to get financing, customers may consider this business owner to be less professional than if a man had owned the business, they might not treat them as well. We did not find that,” Cumber said. “What we found is that the majority of participants, 54 percent, felt that the overall impact of being female was positive.”

Meeder, who helped carry out the study in order to earn her master’s degree at SDSU, said the South Dakota women surveyed identified hard work as the most important factor that led to success. That was followed by having a drive or passion for the business, and having prior experience in that area of business.

When asked to describe what they believed were very high needs of rural women business owners, Meeder said that entrepreneurs ranked a willingness to take a risk as most important. That was followed by personal support systems, qualified workers, sources of financing, training programs, and mentors.

Yet even though the majority of women expressed the need for training programs and mentors, only a minority of them had taken advantage of such services, Cumber said — perhaps suggesting that entrepreneurs don’t always know what programs are available when launching a business.

“That really is the next step we’d like to take a look at, how do we match these women with mentors, how do we get information to them in an efficient way that will help women that are already in businesses become more successful, but will also make it easier for women who want to start a business, to help them get the business off the ground,” Cumber said.

A summary by Cumber and Meeder describing their findings about rural women entrepreneurs in South Dakota is available online in a recent edition of SDSU’s Economics Commentator. Find that article at the SDSU Department of Economics Web site, http://econ.sdstate.edu/. Use the pulldown bar under “Research” and click on “Economics Commentator.”

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http://agbionews.sdstate.edu/News/newsrelease.cfm?id=2981

Contacts: Carol Cumber, (605) 688-4849

Lance Nixon, lance_nixon@sdstate.edu