Workbar recently supported the Wonder Women of Boston networking event – an evening celebrating community, networking, new friends, and of course….lady power! It got us thinking about female entrepreneurship, our own female members here at Workbar, and what it’s actually like being a woman business owner in today’s world. We found that if you are a woman who is thinking about starting your own business, then there really is no better time than now. According to American Express OPEN’s second annual Women Census report, there are over 8 million women-owned businesses in the United States, which is a 54 percent increase over the past 15 years. In broader terms, women now own 30 percent of businesses in the United States. And the numbers don’t stop there…
Women-owned businesses employ over 7 million people. To put that in perspective, that is 40 percent more people than McDonald’s, IBM, and Wal-Mart combined. These businesses generate over $1 trillion in revenue, more than the combined market cap of companies like Apple, Google, and Sony. Finally, in 7 of the 13 most populous industries including wholesale trade, financial services, and health care, the growth of women-owned firms are exceeding the industries’ overall growth!
While these statistics are amazing, OPEN forum’s report also found that there are a lot of issues to overcome when it comes to being a female business-owner. Below are three of the more prominent obstacles with a few tips from successful female entrepreneurs on how to tackle them:
1. Women still only attract 5% of the nation’s equity capital, and when it comes to funding, women-owned businesses receive 80 percent LESS capital than other startups.
Nell Marlino, founder and CEO of Count Me In for Women’s Economic Independence, spoke to OPEN Forum about overcoming the funding problem. Her advice? Be realistic. It is important to know how much money is needed to not only get your company off of the ground, but to really make your company grow. As excited as you may be to get your company off of the ground, Marlino suggests waiting. She mentions that the women she knows that waited until they had enough funding had much more successful businesses in the long-run.
In an article on Mashable.com, CEO Alexa von Tobel said she created Learnvest so people like her would have access to resources where they could learn about finance and financial planning. Since Learnvest launched in 2009, the site has over 100,000 users, a large majority of which are women. Though von Tobel’s site is not focused on learning how to get funding for an idea, she makes an important point in saying that those with the least amount of money need the most advice. So, even before you receive that startup capital you need, it is very important to have a grasp on the basics of effective financial planning and budget management.
2. Women-owned firms have trouble finding a stable support network or community to help their companies grow.
Angela Jia Kim, founder of the skin care business Omaroma, told Mashable.com in an article featuring women-owned firms that she found that her best support group was a network of women entrepreneurs in her area. She even created a meetup of these women called Savor the Success. Savor the Success has grown from Kim’s small living room meetup to hundreds of active club members across the US and multitudes of online profiles connecting women entrepreneurs across the country. Kim’s philosophy is a give-and-get mentality. Not technically-minded? Ask for help from someone who is! Have a marketing background? Help out someone who may not have a lot of experience. The tagline of Savor the Success is a great thing to keep in mind if you’re wary of asking others for support: “It takes a village to raise a business.”
Jenn Hyman, co-founder and CEO of Rent-the-Runway, also shared some words of wisdom with American Express OPEN Forum. When asked about any wisdom she would give women looking to start their own business, Hyman said that if you truly believe in an idea, you should just go for it. She added that you can’t be afraid to put yourself out there by asking for help, funding or mentorship.
Alexandra Lebanthal of Lebanthal and Company, LLC gives similar advice – she recommends seeking out other women business owners. They likely have encountered the same hardships as you, and can be a reliable source of support.
3. Once women-owned firms approach 5-9 employees, they experience faltering growth.
Shelley Sun, a co-founder of BrightStar Care, suggests to not only project your finances, but also your hiring. Hire people for positions that you know that you will need a few years down the road. She admits that it will feel like you are over-hiring at the start, but once you delegate the workload and give people extra responsibilities they will be able to grow into a larger role as your company grows. By making projections for hiring, suggests Sun, your company will grow at an accelerated, but stable rate. Once your company starts to grow, you won’t feel like you need to play catch up when expanding your staff.
Jane Wurwand of Dermalogica told Mashable.com how she also overcame this obstacle. She says that the key to growing your staff in a successful, productive way is all about finding the right people. She notes that new businesses do not have unlimited hiring capacity and you may only have a team of 2-3 people in the beginning, if you’re lucky. Especially in this case, Wurwand says that one of the most important things is finding the right people—not the “right” people in terms of credentials, but in terms of their chemistry with your company’s value system. She says that even though they may be a close friend or have an impressive résumé, you need to hire the person that will fit in best with your company’s culture and fully believes in your dreams for your company.
As our economy continues to evolve and change, you can be sure to see more and more female entrepreneurial leaders bringing new ideas and fresh perspectives to the current business landscape. If you are a female entrepreneur or woman business owner out there, we hope you will heed the advice of these and other savvy female entrepreneurs who came before you – stay strong, stay focused, and stick together! For more articles, statistics and inspiration check out our Pinterest board on female leadership and women entrepreneurs.