Women are proving themselves to be a powerful small-business force to be reckoned with.
Not only are women-owned firms contributing $3 trillion annually to the U.S. economy and accounting for 16% of all jobs, but new research shows women entrepreneurs will create 5 to 5.5 million new jobs across the U.S. by 2018 – more than half of the total new small-business jobs expected to be created during that time, and about one-third of the total new jobs anticipated by the Bureau of Labor Statistics.
That research, recently released by The Guardian Life Small Business Research Institute, also shows that characteristics such as being more customer-focused, more likely to incorporate community into their business plans, and more adept at creating opportunities for others are helping women excel in 1) running a business 2) keeping employees driven and productive and 3) building a loyal customer base.
“As owners and managers, [women] are much more diligently engaged in the strategic and tactical facets in their business. They are more proactively customer-focused,” said Mark D. Wolf, director of the institute. Also, “they’re more intensive about saying things like, ‘I turn my customers into friends.’ Can you imagine the CEO of a major automotive business saying, ‘I turn my customers into friends?’”
In fact, the only things that ranked higher for women than importance of their customers were family and religion. Women also were found, on average, to feel more strongly than men about creating a positive work environment, being able to pay employees better and making employees feel as if they are part of a team. The data also suggests women are more focused on making meaningful differences between themselves and their competitors, and are intent on finding ways to take advantage of their current economic situations. Experts say women also typically reach further into social networks and support systems for help in their business, and more often than men can finesse the art of multitasking, via their roles as caregivers at home and as bosses.
Experts say hopeful male entrepreneurs should take notes on what has been giving women business leaders an edge.
“If women are doing things that unleash peoples’ potential ... and if someone has a choice between the two [a male- or female-owned firm] and starts to get wise …” Wolf said. “Men should probably look to owning and running their business more collaboratively and more as a team.
“While there certainly needs to be someone who makes the final decision … I think it’s the collaborative, all-inclusive approach where women have a much greater level of intensity about that they could learn from.”
Many women business owners said they chose to start their own business – primarily in industries such as services, health care, communications and similar areas – because they were dissatisfied with the corporate track and sick of worrying about office politics. And another reason noted: the glass ceiling.
“There’s not a lot of opportunity for women to reach the executive level of boardrooms,” said Helen Han, president of the National Association of Women Business Owners (NAWBO).
A More 'Holistic Approach' to Work
When women start their own business, Han said, they are better able to find the “work-life balance” they desire. “We look at business as an extension of holistic life – it’s not just a career for us,” she added.
Of course, the picture is not all rosy for women entrepreneurs. Finding access to the capital necessary to keep their doors open continues to be a barrier.
A forthcoming NAWBO survey found that 59% of the 550 members surveyed said they did not seek new loans or lines of credit in 2009; 15% did attempt to obtain more credit but failed, 7% got financial help but was less than what they needed, while 19% said they got what they wanted. Roughly 75% of all those surveyed did not get loans or credit at all.
“From the small business community perspective, loans and extensions of credit are what you sort of live off of,” said Han.
The National Women’s Business Council -- a bi-partisan federal advisory council that advises the president, Congress, and the U.S. Small Business Administration (SBA) -- in December issued a report that said between FY 2004 and FY 2008, there was a 16.6% increase in the average value of SBA loans made to women-owned firms. Overall loan dollars to women business owners were up 9.3%, but the number of loans and financings to women-owned businesses declined by 6.2%. The council also cited barriers such as not enough federal contracts going to women-owned businesses, as well.
Han noted that the Women’s Business Ownership Act, which eliminated state laws that required women to have a male relative co-sign a business loan, was only passed in 1988 – just over 20 years ago. She also stressed that women do not have the built-in networks or support system like many men in industries do.
“Women have always done more with less. We were never able to be on equal par starting our businesses,” Han said.
These all could be factors as to why women are more often self-funded than men and are less reliant on bank financing. They are, in turn, more averse to high-risk ventures and extending their cash flows too far, which may be a good thing in this economy. But that could also limit growth.
“I’ve been told I should charge more and that I need to offer less service (time) so I can be more profitable,” said Christina Blenk, founder of WomanOwned.com and the Ohio-based AFS Web, a Web consulting and management company.
“Maybe,” she added. “But in 14 years of business, I’ve been able to weather the economic storms, I have a loyal client base, and I’ve never had to lay off an employee. I may not be rich, but I think women value their rewards differently. I have a nice home, I’ve had a lot of flexibility in caring for my two girls … and I have a challenge every day at work.”