With good news so thin on the ground these days, it’s great to find one positive piece of economic data. You’d think there’d be cheering in the aisles; there certainly ought to be.
The good news is all about women-owned businesses. There are some 6 million women-owned businesses in the United States. Every day 400 new ones are started, representing some 55% of new firm startups; whatever the economic climate, women certainly haven’t lost their nerve. More startling though is their success: Women’s companies are experiencing a growth rate of 11% (compared to 6% in other companies) employment growth of 18% (compared to 8%) and revenue growth of 32% (vs. 24% in other companies.) More startling still is the success of firms that are majority owned by women of color: They are growing at twice the rate of all women-owned businesses and four times the rate of all U.S. firms. Forgive the outbreak of italics — but these are truly staggering numbers.
What does it mean? Given that women-owned businesses receive only about 10% of all venture funding, it certainly tells us something about money. These companies do more with less. Many of them have what is politely called “a greater number of funding sources” using “a wider array of financial products.” In other words, they find funding all over the place — commercial bank loans, vendor credit, family funds, and credit cards. Venture funds are so overwhelmingly male, and their culture so macho, that many women don’t even attempt this road — and some see a real benefit in bootstrapping. Kimberly Bunting, CEO of Business Access, started her company with help from friends, family and banks — and thinks this leanness has given her business a cultural advantage. Prudence and thrift are woven into every aspect of company operations. “Quality assurance isn’t a buzz word, it’s a financially reality,” Bunting says. “When our revenues are effected, our expenses follow. We have real pain when we make the wrong decisions. These are skills that will be valuable to our company for all our years to come.”
But she also points out that “a certain amount of working for Business Access is being committed to the cause” — in this case, the cause of building software systems that help disabled people find work. This sense of mission doesn’t displace business goals; the company has doubled in size each year. The sense of mission is how that growth is accomplished. Employees don’t feel they’re just making money — they’re also making a difference. While this isn’t true of every single women-owned business, I’m struck that it is characteristic of so many, and of the more successful ones.
The data show that women-owned businesses have other interesting characteristics, too: They are more likely to offer flexible working hours; they are more involved in community activity and provide more time off for employees’ community commitments. Their hiring is diverse (women don’t just hire women) and they are also more likely to offer a choice of health and retirement plans. Doing good and doing well are inextricably linked. These opportunities aren’t a cost; they’re a benefit.
The corporate world always learns from entrepreneurs, and there’s a lot to learn here. Especially because many of the women starting these great businesses are leaving large corporations to do so. They’re sick and tired of being belittled, abused, harassed, underpaid, and under-promoted. They don’t leave to have babies and bake cookies but to pursue opportunities that will prove more challenging and to build companies that are more respectful of human beings.
The most successful of the women-owned businesses utterly defy female stereotypes. They’re tech savvy, they make great use of formal advisers (not just old boy networks) and they are not just going into the service sector — but into construction, transportation, communication and utilities. These high-achieving businesswomen are risk takers — and they’re taking risk without much support from the investment community, at a time of economic uncertainty. Can you imagine what they could do in good times, with real support?
Of course not every business owned by a woman is a paragon and, like all startups, many fail. But there’s a lot to be learned from the phenomena of women-owned businesses. What I take away from it is the value of taking risks (maybe that safe job with the safe company isn’t so safe after all) and the value of purpose. Women — and women of color — are succeeding because they’re so driven — not just to succeed but to succeed by their own lights, according to their own values. Rather than looking for certainty and balance sheets in my next career move, maybe I should be looking for mission, commitment, and daring.
And, of course, for women.