The New York Times just published an article about how women-owned small businesses significantly lag behind small businesses owned by men in terms of revenue growth, exploring the reasons behind this discrepancy and investigating current efforts in place to reverse this trend.
It's a perplexing issue as women entrepreneurs are starting up businesses at twice the rate of men in the U.S., resulting in 10.4 million U.S. women-owned businesses according to the Center for Women's Business Research. However 43% of women-owned businesses have revenues of $10K or less, over 70% having revenues less than $50K, and only 3% have revenues in excess of $1M according to the Women's President's Organization. In contrast, 7% of male-owned small businesses exceed the $1M revenue mark.
It's not all an issue about available cash to invest in growth, but more about motivation itself. As published in an earlier blog post, I noted recent research from American Express that found that while men view their primary business goal as "growing the business," women regard their top priority as "maintaining the business."
One highlighted initiative to help women leapfrog over this growth barrier is Make Mine a Million, an organization that helps selected women-owned businesses with revenues of more than $200,000 grow to $1M plus in 18 months. This organization hosts a contest of sorts, a la "American Idol," where applicants apply to be one of 25 finalists to make a three minute business case in front of a large audience of small business owners (next event in New York on Oct. 23rd) that then vote. Winners can earn up to $50K in investment capital plus receive a wide-range of start-up business counsel.
In terms of some other key facts about women-owned businesses, the Center for Women's Business Research just published its annual Key Facts Update and here are some highlights:
- Women-owned firms employ nearly 13 million people and generate $1.9 trillion in sales.
- Between 1997 and 2006, majority women-owned firms grew at twice the rate of all firms (42% vs. 24%).
- 83% of women business owners are personally involved in selecting and purchasing technology for their businesses.
- Women owners of businesses with $1M and higher in revenues embrace financial measurements as management tools and produce more financial reports more often than smaller firms.
Shivonne Byrne, Innuity CMO
Its shocking that so many women own their own business and yet arent doing well. Perhaps they need more guidance in the development stages. For any women who are just starting out or would like to start their own enterprise and do not live in CA, check out the "Make Your Dreams Come True With Mirassou" contest. The winner of the contest recieves $50,000 and works with a team of professional consultants to start their own business. Check out their site http://www.mirassou.com/women_in_business/dreams.asp to enter. The deadline is Dec 15th 2007. I work with them so I wanted to fill you in on the scoop!
Posted by: Lisa | October 17, 2007 at 10:20 AM