Women are jumping from the frying pan into the fire in vast numbers. And a flaming number of women are opening their own businesses.
According to the Center for Women’s Business Research, “the number of women-owned firms with employees has expanded by an estimated 28 percent between 1997 and 2004, which is three times the growth rate of all firms with employees.” The estimated growth rate in the number of overall women-owned firms was nearly twice that of all firms. There are 10.6 million firms in the country at least 50 percent owned by a woman or women.
In Colorado, women own 50 percent or more of 52.1 percent of all privately held companies. The Colorado growth rate between 1997 and 2004 for women who own 50 percent or more of privately held companies increased by 26.8 percent. Colorado ranks 10th in the nation in the growth of privately held companies owned 50 percent or more by women, according to the center.
Financial lending to women-owned businesses has increased as well.
The National Women’s Business Council reported that Small Business Administration lending to women-owned businesses increased by 29.9 percent between 1998 and 2003, compared to an overall 20.5 percent. During the same period, however, the number of loans and equity investments grew by 40.5 percent among women-owned firms, compared to a 56.9 percent increase among all businesses.
According to the women’s business council, “The dollars going to women-owned firms increased at a faster rate than among all firms, while the increase in the number of loans and investments to women-owned businesses did not keep pace.” The chairwoman of the National Women’s Business Council, Marilyn Carlson Nelson, was quoted in a news release as saying that “the NWBC recommends that the SBA increase its outreach efforts to the women’s business community and to the financial community to encourage more participation by women business owners in SBA loan programs.”
Julie Weeks is the executive director of the Washington, D.C.-based women’s business council, and she said the amount of capital going to women is lower, compared to men, for a several reasons. “The financial institutions aren’t as apt to bring women along all the way and inform them of total lines of credit,” she said. “And women are not as knowledgeable about all of the financial tools available.” Weeks also said there is a perception among some financial institutions that women are not directed toward high-growth businesses.
To ensure equality for women business owners in not only loans and finances but also a variety of other issues are numerous organizations, specific to women business owners and professional women. The National Women’s Business Council is a bi-partisan federal government council, which independently advises the president, Congress and the SBA on critical economic issues related to women.
In June, the women’s council published two reports: One profiles 24 organizations or initiatives that provide exemplary support to women business owners. The second report identifies legal and policy changes that affect the growth of women’s business enterprises.
Weeks said it is necessary to be “vigilant and vocal” to ensure women in business are heard, “keeping the pressure on Congress.” Women-in-business-focused organizations keep a watchful eye on legislation and policymaking and offer an educational and supportive format for women in business, she said.
“The difference (between male-owned and female-owned businesses) is not what’s different, but how it’s different,” Weeks said. “From the outside, the business looks the same, but how the decisions are managed and the employees are dealt with is very different. Much of this is about simple gender differences.”
Women communicate differently than men, and women have specific concerns, such as childcare, she said. “Although small-business development centers offer a variety of classes to the business owners, the classes are usually taught by professors, and they are transactional in nature. Women learn more in relational settings.”
Judy Lakin is the president of the Colorado Springs-based Southern Colorado Women’s Chamber of Commerce. The women’s chamber celebrated its 10th anniversary this year with 90 members. Lakin agrees that women are at their best in relational settings. “Men and women function differently, and they are motivated differently,” Lakin said. “A wonderful thing we bring to the work force is that we are motivated through relationships.
“Men work on a hierarchal scale and women work horizontally.” The women’s chamber is a place where women can share experiences. It’s important that women receive input from other women, Lakin said. What might bother a woman would not necessarily bother a man, she said.
“For example, women sometimes view their competitive nature as a bad thing,” Lakin said. “You know, it’s the old adages ‘he’s assertive but she’s aggressive; he pays attention to details but she’s nit picky’ that we still have to overcome. However, every woman business owner has to be competitive to survive. As more and more women enter the work force and establish businesses, it’s important for them to network and connect with other women.”
There is one group of women establishing businesses at a higher rate than the national and state averages. The Center for Women’s Business Research reported that between 1997 and 2002 (the center calculated the figures based on 1997 Census Bureau data, with adjustments and assumptions based on growth rates) Hispanic women-owned businesses increased by 39 percent. The report indicated Hispanic women owned almost four in 10, or 39 percent, of the minority women-owned businesses. Hispanic women represented 8 percent of all privately held majority owned women-owned firms and 30 percent of all Hispanic-owned firms in the country in 2002.
In that same year, California was No. 1 and Colorado No. 10 in the nation in the number of Hispanic women-owned firms. Hispanic women owned 7 percent of all women-owned businesses in Colorado in 2002. More than half of the Hispanic-owned companies in 2002 were in the service sector.
Nikki Vixon, the executive director of the Hispanic Chamber of Commerce, said Hispanic women-owned businesses in the Springs are largely centered on the service industry. Many Hispanic women own or co-own restaurants in the area, Vixon said. Latino women, she said, have gone from “home-based businesses to real estate to traditional bricks and mortars.”
The chamber doubled its membership in 2003, from 150 members to 300. The chamber averages 10 new members per month; 65 percent of its members are Hispanic, and, of the 65 percent, 60 percent are businesses owners, Vixon said. She estimated on the conservative side that 10 percent of the chamber members are women and/or couple-owned businesses.
Vixon said there has been an increase in the number of Hispanic women seeking out the Hispanic chamber with business ideas, inquiring about how to proceed.
The major issue for many Hispanic women interested in business is the traditional focus on the family unit, Vixon said. “It’s a cultural shift – the norm is staying home and taking care of the children, but that norm has changed because of a stronger emphasis on education; however, the focus will always remain on the family unit,” Vixon said.
The family focus is one reason that women align with each other through various women’s organizations. Julie Weeks said the proliferation of those women-specific business organizations and many of the banks’ emphasis on women in business are sure signs the women’s business community is fired up.