There has been no greater time to be a woman in business than now. Whether it is challenges to workplace advancement, unequal pay, or a lack of social capital in a business world still dominated by men, women are increasingly opting to become their own boss. According to the 2015 State of Women-Owned Business Report commissioned by American Express Open, it is estimated that there are just over 9.4 million women‐owned businesses in the US, generating nearly $1.5 trillion in revenues and employing over 7.9 million people. Between 1997 and 2015, when the number of businesses in the United States increased by +51%, the number of women‐owned firms increased by +74%, outpacing the national average by 1 ½ times. This growth rate exceeds that of all but the largest, publicly-‐traded firms, topping growth rates among all other privately‐held businesses over this same period.
Although, women are starting businesses in record numbers, they lag when it comes to factors such as getting traditional or VC funding, sustaining past the critical five-year mark or reaching $1 million in revenues as compared to those started by men. While these are critical benchmarks for long-term success and sustainability, they should not be a deterrent to becoming a successful entrepreneur. Here are a few ways in which women entrepreneurs can make being a woman-owned business work for them.
Focus on profitability, not just passion
It seems like one of the “in” things to do these days is to inspire people to follow their passion. It sounds great, but it begs the question, “is your passion profitable?” While there are some business owners who strike gold and are able to build a business based on their passion, many times, following your passion can lead to slow growth and low revenue depending on your positioning, competition, and other market factors. Take for instance the growth and revenue potential between business-to-consumer vs. business-to-business entities. Both are great, viable paths. However, they can result in completely different outcomes when it comes to revenue potential, cost per sale or order or the ability to scale quickly. Cultivating multiple lines of business and revenue is key.
Build your net worth based on your network
The internet, and specifically social media, has unquestionably changed the way entrepreneurs do business. In many ways they have disrupted the traditional model of business, allowing businesses to connect immediately with their consumers, become more responsive to opportunities and threats in the market, and drive and grow business. They’ve also become a way of networking, allowing people to develop and grow their business networks faster and more efficiently online. While the traditional model of networking - going to events, passing out cards, and hoping to make that vital connection - still works, social media is now a critical element of networking that cannot be ignored. Social media platforms such as Facebook, LinkedIn, YouTube, Twitter, and Instagram have taken the traditional networking model one step further, allowing savvy participants to connect to literally hundreds or thousands of contacts in a relatively short amount of time. Social media also allows business owners to continually interact with their contacts to develop long-standing relationships. Using this unprecedented access allows users to leverage their “friends” and “followers” and create a business model that allows them to generate revenue and build their net worth based on their network.
Think outside the “ideal” mentor box
Because many women are first generation entrepreneurs, access to networks where financing, references, resources, etc. are not always readily available. Often, this access can come through the advance of a mentor relationship. However, oftentimes, women look for mentors who are similar to them, whether across racial or gender lines or common social interests. While this can create a cozy, comfortable “BFF” situation, it may not always be the best formula when it comes to advancing a business. Mentors might not always come in the form that we envision. Thus, when it comes to developing mentor relationships, women have to be creative by stepping outside of the “ideal” mentor box and being open to ANY opportunity where someone is willing to share information, make an introduction, etc. in order to advance their business.
Consider non-traditional entrepreneurial opportunities
Starting a business that is enjoyable and based on passion is an idyllic situation and a somewhat romantic notion. Yet, following one’s passion is not always the most lucrative path to profitability and the romance quickly leaves when bills cannot get paid. There are many lucrative, non-traditional industries for women to consider such as construction or technology, which is one of the most entrepreneurial and fastest growing industries today. While they may not be considered “sexy,” a business that makes money is very sexy!
Tout your status as a woman-owned business and target programs that actively seek women-owned businesses
Many times business owners miss out on resources and support available to them simply due to lack of awareness. Becoming certified provides businesses with increased access and visibility to entities that actively seek to do business with women-owned firms. Organizations such as the National Minority Supplier Development Council (NMSDC) and the Women Business Enterprise National Council (WBENC) provide certification to verify ownership of a company while providing access to billions in corporate contract dollars designated specifically for small and diverse businesses. Additionally, most corporations, higher education institutions and federal and local government agencies have supplier diversity programs and professionals focused on finding qualified women-owned businesses to engage and do business with.