Women lead in creation of new businesses
Women formed new businesses five times faster than businesses in general in the past nine years, but still face significant obstacles.
“There are still barriers to women achieving success,” said Anne Janiak, executive director of the Women”™s Enterprise Development Center in White Plains and Poughkeepsie. While conditions have improved, “stereotypes still exist.”
Women now own 11.2 million businesses nationally, according to new study by American Express OPEN, a payment card issuer for small businesses. They employ 9 million people and generate more than $1.6 trillion in revenue.
The number of women-owned firms increased by 45 percent from 2007 to 2016, compared with 9 percent among all businesses.
Women own 39,870 businesses in Westchester County and 34,959 in Fairfield County. They represented about one-third of all private-sector businesses or slightly less than the national average.
Much of the progress can be explained by 30 years of cultural and demographic changes, according to Julie Weeks, a market research and public policy adviser who wrote the report.
“Years ago, fewer than half of our mothers worked,” she said. “Now pretty much everybody”™s mother works outside the home.”
As more women participate in the labor force, they develop contacts, gain managerial experience and cultivate an entrepreneurial spirit.
They also have achieved higher levels of education. Many have earned degrees in fields that lend themselves to launching businesses, such as law, accounting and marketing.
“Women want to chart their own path,” said Fran Pastore, chief executive officer of the Women”™s Business Development Council in Stamford.
“I see a lot of women who have fled the glass ceiling corporate environment and taken their expertise to start their own businesses,” she said. “They are finding ways to do something they love, to have control over their financial destiny and make a living doing it.”
Wendy Wollner, founder and president of Balancing Life”™s Issues Inc., a national training company based in Ossining, said running a business is challenging.
“It”™s very common to be in a room with 99 percent men at business meetings, and they still ask what am I doing there.”
She gives herself seven seconds to establish her credentials ”“ continual revenue growth, 10 employees, a network of 1,000 trainers nationally, contracts with Fortune 500 companies ”“ just to be taken seriously.
Wollner, who was named to the Business Council of Westchester hall of fame on April 19, said that one way to be taken seriously is to sign up for every course in your field, participate in programs and get to “know more than the competition.”
Last year the Women”™s Enterprise Development Center worked with 1,666 women in workshops, seminars, counseling and training programs. More than 100 clients graduated from its 60-hour entrepreneurial training program.
Among the graduates of its 2013 program, two-thirds started businesses and nearly all survived two years.
“We can give them the tools that help them build their business,” Janiak said.
A closer look at the success of women-owned businesses also reveals the fragility of their achievements.
Women own 38 percent of all private-sector businesses, according to the American Express study, but employ only 8 percent of the workforce and generate only 4 percent of the nation”™s business revenue.
American Express based its estimates on surveys of business owners that are done every five years by the U.S. Census Bureau and on gross domestic product numbers and extrapolated trends from 2002 to 2012.
Most of the firms have no employees other than the owners. Many are part-time ventures, meant to supplement another job or plug an income hole.
There was a time when women couldn”™t even get access to credit. They had to get a man ”“ a husband, father, son, brother ”“ to co-sign business loans. The Equal Credit Opportunity Act of 1974 made it illegal to base credit decisions on race, sex, marital status, age national origin.
Yet, lack of access to capital is the number one reason women-owned businesses cannot grow and sustain themselves, Pastore said.
“There is still a bias against women”™s access to capital,” she said.
Most new firms need $100,000 or less to get started or expand. For instance, some government programs offer funding, but require the applicant to make a matching investment that cash-strapped owners of startup firms can”™t afford.
Pastore”™s organization is creating a microlending fund to fill the gap. Beginning with a $100,000 pool of money, the development council plans to make loans of $5,000 to $10,000 to business owners who don”™t have access to credit. It hopes to build up a $3 million investment pool in the next few years.
The only serious way to grow a business, according to one school of thought, Weeks said, is to “shoot for the stars,” to seek out venture capital, to emulate the story of somebody “who came out of nowhere to become the billion-dollar unicorn company of the year.”
Instead, she thinks more attention should be paid to the everyday stories of women who identified opportunities and solved problems in their particular line of work. These role models share stories at the women”™s business centers, friendly places where women learn the mechanics of starting a business and get the peer support of like-minded entrepreneurs.
“That”™s less sexy,” she said, “but every business is important for the health and vitality of the community.”