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Ending The Confidence Crisis For Women Entrepreneurs

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Working in several corporate jobs early in her career, Megan Phillips, 30, watched women colleagues struggling to get more interesting assignments and make partner.

"It seemed like they spent a lot of effort trying to work within the politics of the business," she says.

Those formative experiences made her think seriously about the advantages of self-employment.

"It made me realize if you can go out and find work yourself, sometime the benefits of being in a large firm or large business don't really outweigh the drawbacks," she says. "Sometimes it’s better to have your own autonomy in making business decisions."

So, when Phillips graduated in 2010 from University of Wisconsin Law School into a dismal post-recession job market in Madison, Wisc., she decided to take a chance on a commission-only position at a local firm, where she had to bring in all of her own clients. In the "eat what you kill" environment, she went into overdrive to build her practice.  "I really overwhelmed them with the amount of work I was able to bring in," she recalls.

Gradually, she realized that building a "book" of her own clients--a portable group that she could move with her to any firm where she worked--gave her tremendous professional security. When her employer finally offered her a traditional, salaried job, the pay was lower than the six-figure revenue she was already bringing in--$78,000 less, in fact. It was easy to see who would benefit most from that arrangement. "No, not going to do it,'" she told her bosses.

She eventually left for Relles, Milliken & Scheffer, LLP, a Madison firm that was quick to make her a partner, also teaching as an adjunct professor at her alma mater. The five attorneys share office expenses but practice independently, with their own books of clients. Her practice is thriving--and she loves knowing that she doesn't depend on anyone else to generate work for her. "That's my security," she says.

Thanks to Phillips' willingness to, essentially, create her own job, she has built a well-paying career at time when, according to recent research published in the ABA Journal, just 55.1% of 2012 law school graduates were employed in full-time, long-term positions as of February, 2013.

Her story stood out for me, in light of a recent report showing that women around the world are starting and running businesses in record numbers--but many lack the confidence to pursue entrepreneurial opportunities in the way she has.

The Global Entrepreneurship Monitor 2012 Women's Report, a giant, recently released study by Babson College, Universidad Del Desarrollo, Universiti Tun Abdul Razak and London Business School, looked at 67 countries, ranging from developing economies to the richest nations in the world. It found that in 2012, there were about 126 million women entrepreneurs running startups and about 98 million female owners of established firms.

Despite these huge numbers, in all 67 countries, women are less confident in their entrepreneurial capabilities than men. "In nearly every economy, there are fewer female than male entrepreneurs, and they show reluctance to scale their businesses or enter new and untested markets," write the authors.

As the researchers point out, women's roles and childcare options vary considerably around the world, and that is likely factor in what career and business decisions they make. A woman who is the main caregiver for small children might, for instance, find that keeping a business small works best for the time being. And the lack of mentors and role models for women entrepreneurs is also a factor.

Interestingly,  the women most confident about their ability to run a business live in Sub-Saharan Africa--where 67% trusted their own abilities to do so. Women in this region also reported the lowest fear of failure.

What's unique about Sub-Saharan Africa? It has a high percentage of women who are already involved in running businesses. In 2012, 27% percent of the female population of countries in this region were involved in entrepreneurship. That's often out of necessity. Sub-Saharan Africa has the highest percentage of women who start a business because they need the income (37 percent do), as opposed to doing so primarily to tap an opportunity in the market.

In countries with more developed economies, three quarters or more of the entrepreneurs start a business because of perceived opportunity, rather than necessity. However, they have the highest levels of fear of failure.

It seems a little counterintuitive that women in richer countries would be more apprehensive, given the resources and social safety nets available. However, when you think of stories like Phillips', the data makes a lot of sense. Women in more developed economies often have many choices of sources of income. They're not as likely to be forced to start a business to survive--and therefore may find that business ownership seems riskier than what they're already doing.

"Nobody expects to be financial better off working for yourself, as opposed to a big corporation," says Phillips. "After all, why then would so many people kill themselves to get those jobs?"

However, as she found, entrepreneurial careers can actually pay off very well. And with our economy thrusting more people into trying self-employment and business ownership, more women are likely to discover they're very good at building a business. That could be great economic news for women who might otherwise stick with "safe" corporate jobs that underpay them or force them to deal with the glass ceiling--and, eventually, help give others confidence to try to emulate them as entrepreneurs. Come to think of it, the dwindling of traditional jobs may help many men who are unhappily working in corporate America to take the plunge into business ownership, too. It could be less risky.