This year, Aotearoa (New Zealand) recorded its highest rate of company closures since 2015, with 10,662 companies deleted from the Company’s Office’s quarterly register.

In the second quarter of 2024, corporate moves increased by 2,786 (an increase of 35.6%) compared to the same period last year. However, closures were not felt to the same extent.

Female entrepreneurs have been hit particularly hard. Well-known women-owned companies such as Supy, Sunfed and Mina have all had to close their doors.

According to a global report, family obligations and the pandemic posed greater hurdles for female entrepreneurs than their male counterparts. In the 49-country survey, 18% of female entrepreneurs who left or closed their business said they did so for personal and family reasons, compared to just 12.6% of men.

Our research examined the personal and family reasons behind women entrepreneurs’ decisions to exit their business. Although respondents were from the UK, the responses reflected experiences from New Zealand and elsewhere.

We found that women entrepreneurs often felt they had no choice but to give up or close their business if they wanted to maintain a viable personal life.

Household requirements

We interviewed 16 female founders in the UK who left their startups for personal reasons, most of which had nothing to do with financial or performance issues.

These reasons typically included balancing home and work life and often gender-specific responsibilities related to child and elderly care.

In partnered households, the husband’s career often came first. For example, one beautician gave up her growing business to care for her children because her husband’s medical career was so demanding. She explained:

If we had both tried to focus on our careers, there would have been conflicts and the children and family life would have suffered.

Another woman who had founded an Irish dance school in seven cities was reluctant to sell, explaining that traveling with two young children made it impossible to continue her successful business.

With one, I can travel around the world with him. I used to take him to the dance studio in his little baby carrier and keep him with me for a few days. I hated that because I thought it was very unprofessional. But sometimes you just have to do it, right? But with two, that was no longer feasible. When I got pregnant with my second child, I started thinking about what my next step would be.

Even women who had not had children often cited gender-related reasons. One woman’s harrowing experience with IVF forced her to consider whether being an entrepreneur was the right career for her.

Another had devoted her time to supporting her sister, to whom she had donated eggs when she lost premature twins. Her absence from the business led to a gradual decline in her income. She explained that grief and emotional distress left her exhausted and unable to develop new business:

It was as if someone had taken the batteries out of me. I just stopped working.

We looked at these feelings in depth and examined how women understood their decision to leave. In doing so, we examined their “personal” reasons in more detail. In the total of 16 interview transcripts, we documented 47 different negative feelings, compared to 17 different positive feelings.

This imbalance highlights how involuntary corporate departures are. But more worryingly, it draws attention to the potentially damaging impact these feelings have on women’s wellbeing and confidence, as well as the broader reshaping of their professional and career identities.

Have everything

The women we spoke to explained their decision to leave the home by saying they were expected to put family first and blamed themselves for not recognizing this perceived opportunity to “have it all.”

Our society continually perpetuates the myth that entrepreneurship is the panacea for work-life imbalance and the secret to achieving the coveted career goal of flexibility at work.

Uma, a former entrepreneur, explained:

I was told (starting a business) would be flexible. I wanted something that didn’t require me to work full time, but I was completely wrong – especially when you start your own business. It takes over your life and just becomes another baby.

There needs to be a new discussion that recognizes that business and personal expectations of female founders are often incompatible.

The business involves costs

Politicians and the media should stop portraying self-employment as a free solution for women.

Sometimes it is a poor career choice, especially when talented women could potentially add economic and social value in companies with family-inclusive practices and policies that support them.

Of course, women should continue to be encouraged and supported if they want to start a business. Many, especially those with high human and entrepreneurial capital, start successful and sustainable companies. But the facts show that the general thesis “more (startups) is better” is the wrong approach.

Too often, advocates argue that governments should focus on creating “cheaper, faster, easier” ways to start a business. A more nuanced approach would benefit from first understanding what kind of people become entrepreneurs and how peer networks and the funding environment can help.

Entrepreneurship continues to be presented to women as a way to better balance their work and personal lives. However, this needs to be balanced with a ‘reality check’ regarding the poor prospects for women entering crowded, volatile industries, working part-time or becoming sole breadwinners without additional secure income.