In her Postcards blog, Fortune editor at large Patricia Sellers featured a revealing guest post by Susan Wilson, CEO of The Judgment Group and FundHer. Wilson’s column focused on women and their puzzling hesitancy and discomfort with money.
To illustrate her point, Wilson conducted a test at Georgetown University using 15 female undergrads. Before the students arrived, Wilson placed $20 bills on a series of random desks. When the women entered, they ignored the cash and even avoided seats where bills sat on desks.
Wilson’s point was to show that in general, women carry passive feelings about money and may also have preconceived rules about who deserves money and why.
Here’s what I had to say in my guest post at Postcards:
When you speak to women about their businesses, they start with their inspiration, mission, client relationships and their personal journey as entrepreneurs.
After a few probing questions, they get to the business model and how they make money.
Male business owners have the order a bit different.
This isn't true for all women, but more women than men are "intimidated by the numbers," they say. "I'm just not a numbers person..."
Usually, that is far from the truth.
The intimidation is a psychological barrier. Asking for financing comes less naturally for a woman. She feels that she should do it on her own.
Size of business also matters less. And size (pardon the stereotyping here) absolutely matters most to men.
The mission of the business is what drives women who start them. The size of the profit drives their male counterparts.
I noticed this recently as I was speaking to a married couple who own a retail business. The husband shares details about inventory turns while his wife talks about the specialty merchandise she carries for the unique needs of her customers.
She's focused on the relationships; he's focused on moving the goods.
Men also tend to have a hard and fast goal in mind. They want to get to $X in revenues or into Y locations. The goal allows them to plan their way to it.
Women entrepreneurs tend to operate with a more general goal to grow their business. Their thinking then goes to the plan: How many customers? What suppliers, margins, cash flow will get them there?
The upshot of all this: Women start businesses at 1.5 times the national rate. And women are driving the growth of our smaller business—to a point. That is, women-owned firms have higher growth rates than male-owned firms, but only up to the 100-employee and $1 million mark.
Unfortunately, only 3 percent of all women-owned firms have revenues of $1 million or more. This compares to 6 percent of all male-owned firms.
What's the best thing that women who have large and successful businesses can do? Show other women that knowing the numbers is critical and that making money is a noble outcome of owning a business. Remind each other that bold goals to grow don't have to come at the price of mission. Success comes with a plan to achieve it, and that starts with the end in mind. And who better to juggle the multiple objectives of profit and passion than a woman?
And the best way to break woman's psychological barriers about money? Teach girls at a young age that they shouldn't shy away from the numbers—and especially from the money.
As a small-business owner, are you about passion, profit, or both? Share your comments below or email me at email@example.com.