I'm always fascinated by business, and in particular business success. So when this MEDIA RELEASE - came across my desk on Thursday February 14th, 2008
By Amanda Gome of Smart Company, I thought it would be great to share with you.
Top 10 Lessons of successful female entrepreneurs
What's keeping women entrepreneurs in the minority? Is it something they are doing wrong? It doesn't have to be this way. AMANDA GOME offers 10 steps to success.
What is it with women?
Recently I interviewed a young female entrepreneur, Lisa Messenger. Although she had almost 10 years experience working in large corporations, her first venture was a disaster. The reason? She spent all of her time doing favours for other people, and told everyone that she didn’t care about money but just wanted to follow her passion.
Soon after she launched her sponsorship company, she paid $30,000 for a staff member and an office, but took no salary for herself. Of course she went broke before coming to her senses and launching a successful business, Messenger Publishing.
Unfortunately this is a story I have heard many times: the ambitious businesswoman who tells anyone that will listen that money does not matter, shuns any talk of profit and works long hours in low growth or no growth businesses.
Often they start their business because they see a niche and want flexibility and independence. They end up, if they are lucky, barely replacing their salary and wondering what the hell they have done; this was never the plan.
But then there is the breed of extremely successful female entrepreneurs. By successful I mean bringing in revenue of $1 million and $100 million. They operate in a very different way. From day one, they start with adequate funding. They are not afraid to think big, take a risk and borrow.
Unfortunately they are a very small proportion of the entrepreneur population. And
finding successful female entrepreneurs to interview is a feat in itself.
How many are there? There is a lack of longitudinal data that chronicles the rise (or fall) of female entrepreneurs in Australia – but there are clues. The latest figures from the 2006 census show there were 1.48 million owner-managers. Of those, only a third (469,058) are female.
Only 17% of Australian businesses are run by an individual female or predominantly by females. And only 30% of predominantly female-run businesses employ staff compared to 41% of predominantly male-run businesses.
Award lists like the BRW Rich List or Young Rich lists never feature more than 10% of self-made female entrepreneurs. In awards such as SmartCompany’s Smart 50 2007, about 20% are females.
This leads me to predict on the back of an envelope that about 150,000 businesses are being run by ambitious female entrepreneurs.
The good news is that these numbers could swell. As the number of female graduates have caught up with the number of male graduates in the last 10 years, Australia is reaching a tipping point where a wave of well-educated women are in their 30s, backed with networks and experience, and an expectation of success to start their own ventures.
So what makes a woman a successful entrepreneur? What differentiates her from a struggling business owner? And what traps does she need to overcome – traps that are often specifically related to her gender?
Lesson One: Money is good – talk about it, borrow it, control it, embrace it
Nice girls don’t talk about money. Nor do nice businesswomen. In fact women in Australia have been so indoctrinated that many (like Messenger) try to use an anti-money statement to position themselves in the market.
Entrepreneurs that I interview often proclaim that they are in business not to make money but to “make a difference”.
Even highly successful business women like Amanda Briskin (www.smartcompany.com.au/Premium-Articles/Hot-Innovator/Shouldering-the-drive-and-passion.html) who founded Mimco, refuse to discuss revenue.
In 2006 I researched 100 successful female entrepreneurs and found that 28% say they hate to talk about money, and most agree that most men are far more at ease talking about money than women.
This has profound implications for the business. It can mean the focus is not on the bottom line nor on revenue. It is not on getting money in the door to ease cashflow, and it is certainly not about badgering clients for money. (Nice girls don’t confront.)
About 54% of the female entrepreneurs also admit that generally women in business are more risk averse than men and that they are conditioned to take less risk.
The difference in ambitions and the way this is communicated means women are often misunderstood by financial institutions. They cautiously start smaller enterprises with a longer start up period, often in traditional industries (which may be low growth).
Financial institutions consider them unworthy of investment.
This lack of external financial support means many businesses never get launched or at a later stage, fail to expand. It’s a vicious circle because with so few businesswomen talking money, the culture does not change.
My research also shows that half of them needed between $5000 to $100,000 to start their businesses. When asked what had held them back, 51% nominated lack of money. A third say they struggled because they could not get enough funds at the start. They regret not starting with more and say it held them back.
About 30% say they faced enormous problems getting money to grow while 17% say they tried but failed to get a bank loan.
None got money from a venture capitalist and only one entrepreneur got money from a business angel.
Lesson Two: Find time and brain space to read that BlackBerry brochure
The digital economy was going to increase opportunities for women. Women could embrace new technology, work remotely and combine families with business. So what happened?
The current landscape is characterised by a low uptake of e-business by women, research shows. While women lead in the use of computers, they lag in the uptake of e-business. Women also take less advantage of mobile business opportunities.
A research paper called “Women entepreneurs in the digital economy: What skills do they really need?” by Patrice Braun of the University of Ballarat, concludes that many women with their family commitments and limited leisure time prefer self guided and learner-managed modes of learning.
The report says there is ample research to show that male and female entrepreneurs possess different business profiles – they start and run businesses in different sectors, develop different products and pursue different goals. Yet since the majority of entrepreneurs are males, perspectives based on the male experience have dominated the business skilling arena.
Anecdotally many women also complain about the technical language and time it takes to get used to new technology and programs.
Yet a high proportion of successful female entrepreneurs love their gadgets and are quick to update, knowing that new technology saves them time and gives them the flexibility and independence they crave. Design software and systems that act as an automatic audit check of your work to compensate for times when you cannot adequately focus, was a recommendation from Wendy Erhart of Withcott Seedlings.
Lesson Three: Have a life partner who doesn’t travel
Sad, but true. Behind most successful female entrepreneurs is a very supportive life partner. In my research, the majority (68%) of successful businesswomen, when asked what has been a very significant help in expanding the business, report that their spouse was of enormous help.
Equally, women report that one of the biggest drawbacks is an unsupportive spouse and a spouse that is resentful about earning less money. Successful female entrepreneurs have one word of advice – dump an unsupportive spouse and find one that backs the dream. Lyndal Thorburn, who runs Innovation Dynamics, advised that it was best to have a husband who doesn’t travel.
Lesson Four: Fight discrimination and bullying
Women face a range of cultural barriers that do not exist for most men. It starts when they first enter the workforce; they earn less than men the higher they progress, despite doing the same work.
Women also report that some men, particularly older men, hate having a woman boss. Marie Hatzis who runs Hussy Clothing, said “some men hate the fact that I am dominating at work”. While some say they have no problem, many report that men play power games and “bulldoze” decisions.
Successful women entrepreneurs say they deal with this in several ways. First, they don’t pretend it doesn’t exist. They learn to look for these traits when recruiting or dealing with clients. Many say they don’t recruit older men with entrenched attitudes.
What they don’t do is ignore bad behavior from men. As for direct gender-based discrimination, they confront it head on. My research found that a third of women say they have suffered direct gender-based discrimination when setting up the business, and half say they took action.
Lesson Five: Make the baby part of the business plan
Yeah, yeah, unexpected things happen, of course. But successful female entrepreneurs take a very strategic approach to having their families.
Almost 70% of the successful female entrepreneurs have children. Half of those say it has been very hard combining entrepreneurship with having a baby. But they also say long-term planning is the key. The best time to have a baby is when the business is between six and 10 years old and when the woman is in her 30s.
But half of the successful female entrepreneurs say they deliberately slowed the growth of the business on occasion to cope. While half say they did not mind, the other half say they were not happy to slow growth.
Lesson Six: Don’t feel guilty
Society still has high expectations that women are the primary carers of children.
Carmelina Pascoe from My Coffee Shop sums it up: “It’s bad enough that both mothers and fathers have to sacrifice their time with their families to start a business. It’s criminal that mothers also get a guilt trip laid on them for doing so. We’re already berating ourselves about this without the community’s help.”
The most successful female entrepreneurs are ruthless time managers and are determined to run their own guilt-free race. Tamerlaine Beasely, who runs Beasley Intercultural, said she had learnt to “multi-task, constantly prioritise” and to use “flexibility, use technology and systems and good child care”.
“Ignore the guilt placed on you by the community,” advised Nicole Dickson of Beyond The Square Communication. Margaret Lomas, who runs Destiny Financial Solutions, said: “Don’t listen to others. Do what feels right for you without guilt.”
Lesson Seven: Pick businesses in high growth industries
I have consistently found when researching female entrepreneurs that they tend to lean towards industries that have less financial barriers, less sexism and are less technologically oriented than men. Even successful female entrepreneurs congregate in four industries; property and business services, personal and other services, education, and retail.
In fact the research I did in 2006 showed that none ran businesses in the booming industries of mining, construction, infrastructure or utilities. Only 3% ran information technology companies.
This does not mean you cannot run a highly successful business in traditionally “female” industries such as retail. Janine Allis started the highly successful Boost Juice but came up with an innovation that changed the industry. Diana Williams started Fernwood because of her observations while at the gym that women preferred to exercise away from men.
Besides, many traditional industries are dominated by highly aggressive companies dominated by men. Gillian Franklin, who runs the cosmetics company The Heat Group, with revenue of $75 million, says her competitors are run by men.
Lesson Eight: Join the right networks
Women are great communicators and have extensive networks. Right? Well partly. But are they the right networks?
My survey of successful female entrepreneurs showed what while they rely on mentors, accountants and business people, very few use industry groups, consultants, business coaches or government bodies.
Research from the European Business School in Germany shows that women have a limited access to social networks that are crucial for career development. They also have a tendency to avoid occupational activities, which eats into their individual free time.
Researchers have already noted that the differences in network access between men and women could have a significant impact on the rate at which women start ventures and their subsequent performance.
Another recent study has shown that there is no significant difference in the overall number of networks, with entrepreneurs accessing more than four different networks over the course of a year. However male entrepreneurs did make a more intense use of formal networks while females made more intense use of informal networks (friends and family).
The research says that too much time spent networking with family and friends is likely to be counter-productive. The research, from the University of Western Australia called “Gender Networking Differences” and its association with firm performance, concludes that entrepreneurs need to monitor the resources they devote to networking so the benefits they receive exceed the costs.
Lesson Nine: Don’t wash the tee towels
Women can wash tee towels quicker, better and cheaper than anyone else. So they do. Besides who else is going to do it? A common trap for businesswomen is to take on a whole range of small tasks, from preparing invoices to paying the wages.
Female business owners loathe outsourcing. Money is tight and why pay for something they can do themselves? This is the classic trap, and means they are always working in the business not on the business. A further disadvantage is they spread themselves too thinly, keep the company small to cope with the workload, or burn out.
But successful female entrepreneurs learn to overcome this trap. In fact they become ruthless outsourcers. Cleaners, cooks, nannies, accountants, a top management team and child-tolerant staff are all essential…. and so is a sense of humor. The female entrepreneurs also say they learnt to take on skilled workers earlier and delegate more.
Lesson Ten: Get tough with staff; they are not your friends
Female entrepreneurs are usually excellent communicators. They also prefer a consultative, inclusive style of management to a hierarchical, aggressive style. This leads to a big problem, often acknowledged by the women – they are too soft on staff, who subsequently take advantage of them.
The answer? Don’t adopt the traditional male style of managing. Just learn to manage a lot better and walk a comfortable line between being friendly, but not necessarily being a friend.
By Amanda Gome
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