The State Of Women Entrepreneurs In The B2B Space

Women-owned companies now account for roughly 36% of business-to-business sales in the U.S.

The State Of Women Entrepreneurs In The B2B Space
[Photo: Peopleimages/Getty Images]

Phyllis Newhouse is a U.S. Army veteran, a single mother, and a tech entrepreneur who founded Xtreme Solutions, Inc. in 2002, drawing on her military experience in cybersecurity. This year, the Atlanta-based company, which counts Lockheed Martin and Delta Airlines as clients, ranked ninth among the fastest-growing women-owned businesses on Women Presidents’ Organization’s 50 Fastest Women-Owned/Led Companies list. Women-owned businesses are on the rise, and Newhouse is among a growing cohort of women entrepreneurs powering major innovations in the business-to-business (B2B) space.


Women-Run Companies Come To The Fore

According to the U.S. Census Bureau’s recently released Survey of Business Owners, there was a 27.5% increase in women-owned businesses from 2007 to 2012. In 2007, there were 7.8 million women-owned businesses in the U.S. By 2012, that figure had risen to 9.9 million.

Women-owned firms make up 36.2% of all non-agricultural businesses and generate $1.6 trillion in total receipts. The majority of women-owned firms, however, are sole proprietorships; only 10.6 % of women-owned firms employ individuals other than the women who own them, according to Census Bureau report.

Still, there was a sizable increase of 143,000 women-owned employer firms in the last five-year period for which data is available. Altogether, those firms employ some 8.9 million people, up 1.5 million since 2007, and are generating receipts of $1.4 trillion.

Flexibility And Opportunity In The B2B Space

Phyllis NewhousePhoto: via Xtreme Solutions

When the average person dreams of entrepreneurship, she might think of selling a fantastic product that consumers rush to in droves. But few entrepreneurs appreciate one of the ingredients in the rapid growth Xtreme Solutions has experienced: That a highly focused business to business (B2B) marketing strategy lies behind the most successful product launches.


Somewhere in the transition between leading a tech startup and heading up a multimillion-dollar corporation, Newhouse became one of the most successful female B2B sellers in the world. The strategy she deployed proved flexible enough to take advantage of opportunities at each stage of Xtreme Solutions’s growth–in effect, putting the company in the right place at the right time, over and over again.

If success came from a flexible B2B strategy, it’s a credit to Newhouse’s flexibility as a leader, too. She’s shown tact and pragmatism when it comes to understanding shifting marketplace needs. In an interview with the Atlanta Business Chronicle, Newhouse says she initially expected commercial businesses to make up 70% of Xtreme Solutions’s clientele. But it wasn’t long before she realized that government contracts would potentially eclipse those commercial opportunities. So Newhouse recalibrated her approach.

Xtreme Solutions also succeeded in finding fresh opportunities with its existing clients. In the same interview, Newhouse credits a company rebrand for delivering an additional 65% of revenue growth from the business partners it already had.

Newhouse isn’t the first woman business owner to successfully deploy this approach, of course. Across the board, women-owned businesses capture 35.9% of B2B sales in the U.S., amounting to some $432 billion in revenue. When government contracts are factored in, that figure climbs to $754 billion, out of a total $1.2 trillion.


And successful B2B strategies aren’t just a phenomenon among women-led tech companies. Women-fronted businesses with B2B sales earned higher receipts regardless of their industry. At the Women Presidents’ Organization, a peer advisory group for female CEOs of multimillion-dollar companies, our more than 1,800 members together generate some $21 billion in aggregate revenue. What’s more, these businesses also tend to have better access to outside capital.

Diversity Obstacles Remain

Since B2B is such a powerful growth driver for all businesses, we should expect even more female founders in the space. What’s getting in their way? One obstacle could be access to markets. The supply chain is historically a male-dominated arena, and women hold only a tenth of supply-chain leadership roles, according to a 2014 SCM World study. Yet that very lack of diversity represents a huge opportunity for women to offer their talents and abilities in the supply chain, which would in turn benefit from their contributions.

The fact is that relationships play a role in determining a company’s access to new markets. Networking might seem a low priority compared to product development, marketing, staffing, accounting, or simply keeping the lights on. But for entrepreneurs looking to scale up, building powerful networks is a critical business task. Simply getting to know potential customers–especially when those customers are other businesses–can be a decisive factor when it comes down to making the sale.

Of course, not every business has a product that’s appropriate for a massive scale-up. Historically, women have made greater inroads in industries that have been better suited for regional and local markets. In 1977, just 4.5% of privately held businesses were owned by women–mainly in the fashion, beauty, and fitness industries.


But in 2015, women are now a driving force in a wide range of industries, including technology and construction, and expanding beyond what anyone could have imagined a few decades ago. These women have built major businesses around products and services that are ready for scale-up. To take them to the next level, they’ll need to craft strategies for entering the corporate supply chain.

Fortunately, female entrepreneurs confronting that challenge now have more female role models than ever before. Phyllis Newhouse’s experience is an exemplary blueprint: Start small, but don’t dream small. Map out your growth path, from regional and specialty businesses to the most relevant channels beyond them. Outperform your own goals.

And never forget that as a female founder, you’re part of a growing and innovative business community that boasts powerful resources like the WPO, NWBC, WBENC, and others. Not to take advantage of them would be a missed opportunity for your company and the rising prospects of women-owned businesses everywhere.

Dr. Marsha Firestone is the founder and president of the Women Presidents’ Organization (WPO), a peer advisory organization for women who own and lead multimillion-dollar businesses. She is also a member of the National Women’s Business Council.