For women business owners
Women owned businesses: growing, hiring, and succeeding
Women are opening businesses at twice the rate of men, says Susan Wilson Solovic, author of The Girls' Guide to Building a Million-Dollar Business. According to the Center for Women's Business Research, three quarters of all firms are either half-owned or majority-owned by women, employing over 13 million people and generating $1.9 trillion in 2008 sales; these firms account for 40% of all privately held companies.
(Women owned businesses were hiring and investing even in an uncertain economic environment: the National Association of Women Business Owners reported in February 2010 that a survey of its members found 34% planned to hire new workers that year, and 21% planned to increase capital investment that year, with 40% planning on keeping capital investment even.)
Self-employed women are more likely than other working women to have greater educational attainment, more likely to be in managerial occupations, more likely to work in non-traditional occupations, and likely to be older, according to the Alliance for Women.
Of all those women business owners, Solovic says 9 out of 10 want to expand their businesses, and 4 in 10 want their businesses to be as large as possible.
Unfortunately, the Wall Street Journal reported in May 2010 that the average revenues of women owned businesses are only 27% of those of male-owned firms, owing in part to the fact that women typically start their businesses with less capital than men (62% of women owned businesses started with less than $25,000, compared to 56% of men, according to the Kauffman Foundation) and less training on planning for growth... but it can certainly be done. The existence of the Women's Presidents Organization speaks to that. To become a WPO member, a woman must head a firm making more than $1 million in revenue for a service business or $2 million for a product business... and not only are there plenty of members—1,400 members across 90 chapters worldwide—most bring in significantly higher revenues than the baseline requirement. The average revenue level is $13 million, the average number of employees is 89, the average number of years in business is 21, and 32% of members pay themselves more than $300,000 per year.
How can you get there, if you're not there already? Below are some practical tips.
Women entrepreneurs interesting stats
Women owned businesses by industry:
~ 14% healthcare
~ 14% professional, scientific, technical services
~ 14% retail
~ 9% real estate
~ 8% administrative
~ 5% construction
~ 4% arts, entertainment
~ 3% accommodations, food services
~ 14% other services
~ 14% all other
(Source: Center for Women's Business Research, published in the Wall Street Journal, May 17, 2010)
Take advantage of WBO stereotypes.
Being a woman business owner has its strengths. Take advantage of them!
For one thing, supplier diversity departments inside government agencies and large corporations are required to award a certain percentage of work to women-owned firms. While the system isn't perfect—some male owned firms are adept at gaming the system—the stringent women-owned certification process of the Women's Business Enterprise National Council and similar organizations aims to eliminate this, making more of those contracts available to you. Consider earning your certification and going after those dollars. (If you're thinking of doing so, we recommend reading The Woman's Advantage for tips.)
For another, women owned businesses are often more customer-focused. According to The Guardian Life Small Business Research Institute's December 2009 Special Report on Women Business Owners, women are more concerned about keeping customers than men (6.3 women compared to 5.3 men)—the most significant difference between male and female business owners found in the study—and more women believe that "whatever matters most to my customers, matters to me" (5.4 women compared to 4.8 men). If this is true of you, use it as a competitive advantage! Bring proof to back up your assertion of excellent customer service. Don't assume that better customer service won't give you an edge while competing against male owned businesses. Price matters, but so does the experience of working with your firm.
The same study found that women business owners are more concerned with carrying out environmentally and socially responsible practices than men, including creating a positive working environment for all staff (5 women versus 4.4 men), walking the walk and talking the talk in contributing to the community (3.6 women versus 2.4 men), and doing all they can to ensure their business is environmentally friendly (1.7 women versus 1.1 men). Because environmental and social responsibility tend to be especially important to women consumers, who make 85% of all buying decisions on average, this can be an enormous advantage. If this describes you, promote it!
(If your company supports a good cause, don't be shy about letting others know! According to Too Busy to Shop: Marketing to Multi-Minded Women, 89% of US women overall, and 92% of female millennials age 13-25 say they're likely or very likely to switch from one brand to another of equivalent price and quality if the new brand is associated with a good cause.)
Many people automatically assume, too, that a woman-owned business must be a small business... whether that's true or not. And yet in today's post-recession environment, when trust in big business is at a definite ebb, being seen as a small business isn't necessarily a bad thing. A July 2010 Gallup poll reveals that American consumers have confidence in small businesses: 66% of respondents said they have a great deal of confidence in small businesses—up from 59% in 2007—as opposed to 19% who felt the same about big business. In fact, of 16 American institutions rated in the poll, small business was in second place, compared to second-to-last place for big business.
And give yourself credit. Too Busy to Shop author Kelley Skoloda writes, "Women have 12 percent more prefrontal cortex," noting this is one reason women make great strategic thinkers. Studies have shown that having women at the top, too, make even Fortune 500 companies more successful; those with a higher representation of women on leadership teams see a 35% higher return on equity and 34% higher total return for their shareholders. For the year ending December 31, 2010, for instance, two of the Dow's 30 companies that delivered the best stock market gains were run by women: Dupont's CEO, Ellen Kullman, reversed decades of decline after taking charge in early 2009 and turned in the Dow's second best performance; Kraft's CEO, Irene Rosenfeld, saw her company handily outperform the Dow average.
Don't go it alone.
Have you heard the phrase, "Be in business for yourself, not by yourself"? There's a ring of truth to that.
It's not that you can't succeed on your own, just that it's not necessary to be the Lone Ranger while you do. And you'll be in good company: the Center for Women's Business Research reports that women owners of businesses with $1 million or more in revenue are more likely to belong to formal business organizations, associations, or networks than other business owners.
Where to start? There's a plethora of such organizations who would welcome you with open arms, from local organizations to online forums to national associations, many with local chapters near you. Aio Design founder Tiffany Jonas, for instance, is active on the board of the National Association of Women Business Owners' South Carolina chapter, a great place to meet and network with other women business owners. Here are some other associations, forums, and resource providers, many of which may have local chapters, along with online forums where you can enjoy the support of with other women entrepreneurs:
~ National Association for Female Executives
~ National Association of Women Business Owners
~ National Women's Business Council
~ Women Presidents Organization
~ Make Mine a Million $ Business
~ Asian Women in Business
~ Office of Women's Business Ownership Entrepreneurial Development
~ Women at Work
~ Woman Owned
~ Digital Women
~ Connected Women
~ Marketing to Women Business Centers
~ W2W Link
~ More Magazine's Reinvention Convention (inspiration for boomer women considering entrepreneurship)
~ iVillage's Home Office series
~ Home-Based Working Moms
~ Moms in Business Network
~ MommyTrackd's Home Office and Entrepreneur forums
~ Executive Moms
(Don't limit yourself strictly to women-focused organizations, though. While they can lend much-needed support and knowledge, the more women participate in all types of networks, the better it will be for other women business owners, and the more networks you belong to, the more diverse your list of contacts and customers is likely to be. Better yet, bring another woman business owner with you.)
Give yourself a break
Many of the most responsible, hard-working, and successful women—among those likely to be business owners—can be impossibly hard on themselves. They'd never think to expect of others what they somehow expect of themselves! Many of the same women have a tendency to try to do too much in any given 24 hours.... and even Oprah notes that many women aren't on their own list of priorities.
If you can relate, try this: at the end of each day, write down one good thing you did for yourself. If a week goes by and you can't summon up more than a few examples, it's time for a readjustment. Make an appointment with a business coach who will hold you accountable for treating yourself well, or start blocking out time on your calendar to do what you enjoy. (If you need justification, think of it this way: if you're out with the two-week flu because you drove yourself too hard, your business will be without its leader, and that's not kind to anyone.)
As you're driving yourself to ever greater levels, too, take a few moments each day, week, or month to remember how far you've come.
"The happiest and most successful entrepreneurs know that keeping their confidence high on a daily basis is an essential ingredient for success," writes Dan Sullivan, founder of the Strategic Coach, an internationally acclaimed program for successful entrepreneurs. "When you’re confident, everything else seems easier. Creativity flows, and getting through the day is energizing rather than draining. One easy way to keep your confidence consistently high is to focus on progress."
Sullivan suggests making a habit of acknowledging progress on a regular basis. "In doing so, you constantly remain aware of the many ways you’re growing, including some you might have otherwise overlooked," he writes. Sullivan has created a tool to provide structure for entrepreneurs to measure their progress, which we recommend, but even if you don't use it, the concept works.
And remember, if you own a business, you're already well ahead of the thousands of men and women who have dreamed of entrepreneurship but haven't taken the plunge. "Many people are afraid to fail, so they don't try," writes Donald Trump—a surprising source on a page about women business owners, but his words ring true. "They may dream, talk, and even plan, but they don't take that critical step of putting their money and their effort on the line." You have, and that's no small matter. Give yourself credit!
And give yourself double points if your company made it through the Great Recession. Smart businesses that survive a downturn in the economy emerge tougher and savvier. The Kauffman Foundation recently conducted a study and came up with some surprising results: more than half of 2009's Fortune 500 firms were launched during a recession or bear market, including household names like Burger King, MTV, CNN, FedEx, Intel, and Microsoft. If you're still in business after the most harrowing economy since the 1930s, pat yourself on the back... and don't be afraid to dream big.
Do some (company) soul-searching
Lisa Johnson and Andra Learned, authors of Don't Think Pink: What Really Makes Women Buy—And How to Increase Your Share of This Crucial Market, list 20 questions to help you learn how your company can more effectively reach women customers, but they'll work with other kinds of customers as well.
Start by asking yourself:
~ What motivates your customers to use your product or service?
~ What causes them to switch away from the competition to your firm?
~ For what reasons, spoken and unspoken, have they rejected your firm in the past?
~ Which underlying human needs can your company fulfill?*
~ Are there messages in your marketing that might elicit a negative reaction from prospects?
* Even the ones your customers might not admit, like a desire for prestige
If possible, supplement your brainstorming by forming an informal focus group of some of your best customers and asking them. (See Tip #3 in our article How to Work With a Web Designer for more details on forming focus groups.) You might be surprised what you find out, and how it can revolutionize your business.
Team up to grow your business
If you've reached your current level of success by dint of hard work and pulling yourself up by your bootstraps, that's excellent! But to get to the next level usually also requires the hard work and expertise of others, and there's no shame in that.
"One of the most difficult transitions for a growing business is morphing from a fledgling startup to a more established, mature organization," writes Solovic, author of The Girls' Guide to Building a Million-Dollar Business. "One of the first changes that you, as the CEO, need to make is to let go so you can work on the business, not in the business. ... If you micromanage, you get bogged down in too many minutiae to execute the strategic vision you have crafted. Your time gets eaten away. The business is driving you, instead of you driving your business. [P]ut together a crackerjack team of individuals and let them do their thing."
Depending on your situation, that may involve hiring people to work inside your firm, hiring consultants or other experts to handle individual projects, or both.
Consider your website. How advantageous is it to pinch pennies and end up with a website that fails to persuade customers to purchase from your firm or falls flat in building credibility for your firm? "Expect everyone to review your Web site as a validation touch point," writes author Dominique Simpson Milton in an Enterprising Women magazine article titled Creative Marketing Strategies. "This is your upfront reference. If your Web site is not professional, you are not ready to compete! Doors will not open. An investment here will provide worldwide dividends 24 hours a day." Hire a professional web designer and let her put her expertise to work for you. (If this is a topic particularly relevant for you, read our practical tips on getting the most value out of your web designer.)
The same principle applies to other parts of your company: your crucial sales, marketing, finance, customer service, and operating functions. We once knew a physician who specializes in a highly specific medical arena; so much so that she's one of only 120 board-certified physicians with that specialty in the world. (In the world.) Yet not long before we met her, she was huddled in her office instead of seeing her patients, doing her own taxes to save money. Had she stopped to think, she might have realized she was shortchanging her customers and probably losing money in the bargain; according to the US Bureau of Labor Statistics, there are more than 1.3 million accountants in the US alone, and many of them would have been happy to prepare her taxes at a fraction of the cost she would have made by treating her patients. (Compare 1,300,000 with 120. You see what we mean.)
In short, beware of being penny-wise, pound-foolish. What appears wise could indeed be wise, or it could cut your legs out from under you. In each crucial decision, take the time to make sure you understand which is which; ask the advice of a knowledgeable and trustworthy colleague or business coach if you're not sure.
We enjoy helping women business owners
We're a woman-owned, women-staffed design and marketing firm that specializes in helping women entrepreneurs and others market their products and services to female target markets, including affluent women customers with annual household incomes of $75,000 to $200,000. We'll use the latest research and best practices in marketing to strategically design websites and other marketing materials customized exactly to your company.
Ready to get started? Contact us!