Something is happening in Colorado with women-owned firms. They are opening at one-and-half times the rate as men-owned firms.
From the young entrepreneurs fresh out of college to the 50-and-over crowd, women are hanging their shingles and making the world of business turn. They are digging in their high heels and growing their businesses too. In the past 14 years, women-owned businesses nationwide have grown their revenue by 84 percent to $25 billion.
But in Colorado and nationwide, women still have less economic clout than men. While they are willing to take the plunge into business ownership at a faster rate than men, their firms are smaller, more likely to have 10 or less employees and not able to crest the annual revenue mark of $250,000.
Call it progress and paralysis, said one leading expert in the study of women-owned firms.
“Something is putting women-owned businesses off their stride as they grow larger. They fall behind toward the end of the entrepreneurial marathon, when entering the 100-employee and $1 million anchor leg of the race,” said Julie Weeks, author of “State of Women-Owned Businesses Report,” commissioned by American Express Open.
It’s going to take some serious business planning, help from local agencies whose mission is to grow small business, and a lot of guts to help women-owned businesses get over the growth hump, she said. Less than 2 percent of women-owned businesses have $1 million or more in annual revenue.
“The most important insight gained from our analysis lies not in industry or state trends, but in our finding that — even as women-owned firms continue to grow in number at rates exceeding the national average — they are not moving along the growth continuum,” Weeks said.
One thing that could help women grab a bigger slice of the economic pie is a diversification of businesses. In the past 14 years, women have ventured into areas like construction and mining. They are franchising their business and some are jumping through major government paperwork hoops for a shot at large government contracts. Last year, only 1.5 percent of all the government dollars spent went to women-owned firms.
But, this year the federal government has made women-owned businesses equal in preference to other small businesses with special designation such as service-disabled veteran, so that they are equal in consideration by the contracting officer.
The Colorado Procurement Technical Assistance Center has had an increase in the number of businesses interested in becoming certified as a woman-owned business for a shot at government contracts. Of the 2,700 clients, 32 percent are women-owned firms, said Kenneth Knapp, PTAC executive director.
“It is a good number,” he said.
Rhonda McDonald, owner of Creek Stone Homes, said growth in women-owned firms depends on the type of business. She started her own home-building firm in 1995 with five employees, grew it up to 65 employees in the home-sales hay-day and has drawn down to 18 employees now.
“A lot of it is market driven,” she said. “You make plans for growth because you have to. Not every business has that definite, hello; everything is growing so get moving. It’s clear in this industry.”
McDonald is among the women who are branching out into a variety of industries, so much so that there are few “non-traditional” industries for women, Weeks said. Women-owned construction firms make up 8 percent of all construction firms.
“That is a big difference from a decade ago,” she said.
Women own 52 percent of all health care and social assistance firms and 46 percent of all educational-service businesses. And, in the last 14 years, women have also opened construction and mining companies — the kind of firms that could buy women more economic clout, Weeks said.
“I certainly like to think the gap will close,” Weeks said. “There are plenty of service industries that are multi-million firms — home health care are majority women owned — what’s to say she can’t take it global or franchise?”
Some local women business owners are thinking beyond the Springs’ market. Conspire, a drug testing woman-owned firm founded in 2003, has sold three franchises and has others in the works with a goal of 200 locations in the next two years. In February, Furry Friends, home delivery pet food shop, sold its first franchise.
“We serve almost 2,000 clients today and strive to double that with our southern Colorado delivery service,” said Tracy Brookham, who co-owns Furry Friends with her mother Debbie. “But, even a greater goal is to continue to bring on several new franchises throughout the Western United States who will also share in our passion to serve the furry friends.”
In the U.S. women-own 29 percent of all enterprises but employ 6 percent of the workforce and contribute about 4 percent of business revenues. Men own about 51 percent of all U.S. firms. And, although employment of men-owned firms has declined by a percent over the past 14 years, revenue in their companies grew by 33 percent and control about 30 percent of business revenues.
The women-owned businesses that did see growth in the past 14 years were those that already had more than 10 employees, Weeks said.
“It has more to do with existing women-owned firms getting stronger,” she said.
Picnic Basket catering was growing fast in the first five years after Kathy Dreiling and Michelle Talarico bought the business in 1989. They knew they had to set up a formal structure in the business, and give each employee specific job duties.
“It wasn’t good enough to have someone do HR — we needed to designate an HR director,” Talarico said. “The more serious we took our business, well, that is in direct correlation with our growth.”
Picnic Basket catering, which also has Cravings and Buffalo Gals BBQ divisions, employs 30 full time and from 60 to 80 part-time employees during the busy season, which begins in May when they will cater up to 30 events a day.
“We were smart enough to hire, as soon as we could, in areas we weren’t fit for,” Talarico said.
They hired a classically trained chef who was serious about logistical plans. They brought in consultants who helped them flip chart their way through the growing pains.
“That was what was so key, when we brought on professional people,” she said. “The more serious we took our business — that is in direct correlation with our growth.”
Talarico is projecting growth in the next three years. The company just hired an IT expert to overhaul the technology infrastructure and a social media expert to work on a marketing plan.
“I’m so excited for women getting into business today,” Talarico said.
The next challenge is to pay close attention to the growth issue, Weeks said, “to help them aim higher and make progress in that regard.”
A lot of the assistance for small businesses has been aimed at getting women into business, she said. Then, it seems, they are left on their own to grow.
“We found where growth pains begin are at a quarter of a million in revenue,” said Weeks who is the president and CEO of Womenable.com. “That is when they have to start setting up systems; they have to give up making every decision.”
As for closing the gap in revenue between men and women-owned firms, it might not happen. Some women-owned firms may not want to grow past their 10 employees, said Dr. Susan Gail Bloss, owner of Cheyenne Mountain Animal Hospital.
She bought the hospital, which had four locations in 1986. The hospital was on a growth tear and went from eight employees to nearly 25. She hired a consultant, made a business plan and put in the business structure needed to grow.
But, Bloss wasn’t comfortable with that size. She downsized, sold off three locations, and is now operates one location with 12 employees.
“Most women like a personal touch,” she said. “At a higher level, you lose that.”
The fact that women are striking out on their own with their own businesses at a faster rate than men is something to celebrate, Weeks said. Women are saying they want more control over their destiny.
“It’s a continuation of a trend that has been going on for the last 50 years,” Weeks said. “There are more women in the workforce, more women getting bachelor’s and master’s degrees, and more women getting managerial experience in their jobs. They have the arrows in the quiver to start and grow a business.”