Starting your own business is one of the most empowering things you’ll ever do, especially if you’re a woman. It’s also one of the most challenging. Business ownership is fraught with pitfalls ̶ lack of planning, funding, marketing skills, dedication, and lack of passion.
Entrepreneurs often only will talk about their successes, but the truth is every business struggles in its first several months. Half of all businesses fail within the first five years. The causes of failure vary. It could be something as simple as not having enough revenue to cover the bills or it could be something more complicated. Some business owners suffer from “if you build it, they will come” syndrome. They believe all they need to do is start a website and customers will follow. Others suffer from the employee mentality, where they are used to having a steady salary, benefits and a boss giving them instructions.
I was the president and co-owner of one of these failed businesses. My husband and I started One of a Kind Baskets, a custom gift basket business, in 2009 and closed it in 2011. It was difficult, frustrating and very much a learning process. That experience was the motivation for this report. You’ll learn more about my experiences in chapter eight.
After we closed our doors, my interest was piqued in the experiences of others and how those experiences might be beneficial to first-time business owners, especially women, whose successes are often overshadowed by the stereotypical male businessman.
The business women who appear in this report speak candidly about the inspirations for their businesses, their struggles and the advice they give anyone who wishes to follow in their footsteps. They were interviewed between August and October 2011 and were given the choice of being interviewed via telephone or via email. The profiles of those who chose a phone interview appear as a narrative. The ones who chose email have their profiles appear in a Q&A format. As of March 2013, when the final version of this report was published, two businesses have gone through a name change and a handful are no longer in operation.
The participants come from different walks of life and different parts of the world, but share certain characteristics.
- The majority of the participants are mothers, some are grandmothers, who struggle with balancing both business and family.
Most did not start their professional careers with the intent of starting a business.
Approximately 90 percent of them came from my LinkedIn contacts or LinkedIn groups.
Ninety-five percent of them run home-based businesses.
As you read the interviews, you’ll also notice most share the same sorts of struggles and learned similar life lessons.
According to the U.S. Census Bureau, there are nearly 7.8 million businesses owned by women. Of these, 909,661 are considered employer firms. The bureau defines the criteria for a firm as “a business organization or entity consisting of one domestic establishment (location) or more under common ownership or control. A firm with paid employees includes workers on the payroll excluding sole proprietors and partners.”
Most of the employer firms had 1 to 4 employees followed by 5 to 9 employees and no employees. Of the firms with 500 or more employees, only 706 were owned by women. Therefore, the vast majority of women entrepreneurs are small-business owners.
As more women enter the business world and become entrepreneurs, colleges and universities are seeing a need to educate students how to be successful business owners. Simmons College School of Management in Boston is the only school in the U.S. to offer a MBA program in entrepreneurship entirely for women. The program started in 2005 and has been growing steadily ever since.
Teresa Nelson, Ph.D., director of the entrepreneurship program at Simmons, attributes the growth in the program to the fact women realize they won’t be spending their entire career in one place so they are seeking other opportunities.
Students taking the classes have a serious intent of starting a business. The majority of the students, according to Nelson, plan on starting services businesses.
So what makes a successful entrepreneur? It’s difficult to say. Nelson says there isn’t one single trait that makes an entrepreneur successful, but there are several that help. These traits include perseverance, thinking creatively, seeking opportunity, being able to accept failure, command of finances and being able to speak in front of groups.
According to the Small Business Administration (SBA), entrepreneurs are
calculated risk takers
resilient (able to grow from failure or change)
They also have high-energy levels, integrity, problem-solving skills, strong management skills and organizational skills.
All these traits can be learned.
Is a college degree important? Again it’s difficult to say. Nelson says it really depends on the type of business. It may be necessary if a woman needs expertise in a specific field. She may also wish to pursue a degree if she wants to learn writing, public speaking and other skills. Whether an entrepreneur pursues a degree or not, she can be helped by, and can learn skills from, other entrepreneurs she meets at the local chamber of commerce and other organizations.
Education and personality traits play a role in the success of an entrepreneur. Location also may help. In October 2011, Forbes.com listed the 19 best U.S. cities for businesswomen. The list was compiled using information from the Small Business Administration (SBA), the Bureau of Labor Statistics, WomenAble and American Express OPEN. The information tracked the number of SBA loans granted to women, the growth of firms headed by women and women’s weekly salaries.
The cities were New York, San Francisco, Chicago, Atlanta, Dallas, Tampa, Richmond, Charlotte, Bethesda, MD, Washington DC, Phoenix, Grand Rapids, MI, Baton Rouge, Tacoma, WA, Boston, Salt Lake City, Philadelphia, Columbus, OH, and Milwaukee.
The states with the largest percentage of women business owners, according to the National Women’s Business Council, are the District of Columbia, Maryland, New Mexico, Hawaii and Georgia.
Although women have made great strides in the corporate and business world, gender differences still exist.
Nelson calls it a pattern of segregation, not discrimination, and that “it’s more about how men and women interact as opposed to biology.”
The participants in this report were asked if they have ever experienced discrimination in the corporate or business world because they are women. Nearly 41 percent said yes. Their experiences included being paid less than men working the same position, being passed over for promotions and not being taken seriously as entrepreneurs.
Julie Barnes, owner of Fun 4 Kids (www.fun4kidsstore.com) said, “Yes, in many dealings I’ve had, I’ve been treated as though I don’t know anything because I’m a woman in a business world. They think I’m uneducated and uninformed, and in many cases I have had the chance to ‘surprise’ many of them when they find out that’s not the case.”
Andrea Rozman, owner of Your Gal Friday (www.your-gal-friday.com) described her experience:
I was a contractor for several years for a very prominent, international corporation. The business was going through a major change due to an acquisition. People were losing their jobs, being moved around, etc. I had been with my particular group for a little over three years. I knew everything about our project. I had seen people come and go, including several project managers. The first two let go were women. Both strong. Both intelligent. The final was a man who would come in late and then sip coffee and read the newspaper in his cubicle. When the “executives” called meetings to discuss our finances, they called me, not him. It didn’t go unnoticed by anyone on our team. When it came time for our group to be reorganized, several employees recommended me to lead. The person making the decisions spoke with me. We had a great discussion; he told me how well-recommended I was and led me to believe I’d be leading the team soon. A short while later, at a large motivational event that I coordinated, which brought our team together, he announced who the team leader would be. Not me. It was the lackluster coffee sipper. I remember feeling shocked, and I remember several employees coming up to me, also in shock, because they had also believed I was to be team leader. It was quite obvious what had happened.
A number of support organizations, such as local chambers of commerce, the SBA and the Service Corps Of Retired Executives (SCORE), exist to support entrepreneurs. Participants were asked if they felt enough support and networking organizations exist for female entrepreneurs. Nearly 68 percent said yes. Others said enough organizations existed, but wished they were easier to find and did not require a membership fee.
“There are numerous resources online, the BBB and local women’s business organizations who are experienced and happy to provide women entrepreneurs with the answers to any questions and counseling on any subject,” Emily Patterson, owner of Sunflower Naturals (www.sunflowernaturals.com) said. “There are networking meetings and sources such as LinkedIn for networking, support and advice. Most of these resources are free, or extremely low-cost.”
Another support organization available to aspiring entrepreneurs is the SBA Women’s Business Centers. The centers provide training, counseling, access to loans and initiatives to help secure federal market opportunities.
To find a Women’s Business Center near you, visit http://www.sba.gov/about-offices-content/1/2895/resources/13729.
In addition, the National Women’s Business Council (NWBC) holds events throughout the year. You can view events at http://www.nwbc.gov/resources/EVENTS_CALENDAR.html.