Women are starting companies in droves, according to studies conducted by a variety of sources, including American Express and The Ewing Marion Kauffman Foundation. But while the number of women-owned companies has increased 54 percent, and revenue has risen by 58 percent over the last 15 years, the news isn’t all rosy. Women still get far less funding, employ significantly fewer people, and are less likely to hit the million dollar revenue mark than their male counterparts. So what gives?
“I think women are still learning to think big,” says Loretta McCarthy, a managing director at Golden Seeds, a venture capital company with two funds and a 250-member angel network that invests exclusively in women-owned companies. “Women may be more cautious and may need mentoring and coaching to think about how big their businesses could become.” It’s not as simple as that, of course, but McCarthy isn’t alone in citing the failure to “think big” as a mental block to which women are particularly prone.
The good new is that there are a burgeoning number of programs and organizations that are singularly focused on helping women grow their companies. For instance, Make Mine a Million $ Business, Women Presidents Organization (WPO), Springboard Enterprises and Ernst and Young’s Entrepreneurial Winning Women, among many others, have set their sights on identifying, accelerating and celebrating women-owned businesses with high growth potential.
“On average, the participants in our program grew annual revenue by 49 percent and jobs by 26 percent,” says Lisa Schiffman, the founder of Entrepreneurial Winning Women. An independent study conducted by Babson College revealed that women in the program reported an increased desire to grow their companies, and an uptick in confidence that they were capable of more ambitious growth than they had originally planned.
But while the right mindset certainly plays a huge role in entrepreneurial success, the path to significant growth is very often a complex puzzle that comes together differently for every business owner. There are, however, a number of common themes.
Leverage Your NetworkJennifer Scully, who trained as a nurse, was a vice president at a large healthcare company when an acquisition gave her the opportunity to strike out on her own. She took a retirement package in 2007 and, shortly thereafter, started her own healthcare staffing company, Clinical Resources in Atlanta. Her former role had involved ensuring the quality of clinical services such as nursing, therapy and dietary operations so, she says, “I leveraged the relationships that I had built across the country.” Was growth on her mind from the beginning? Not at all.
“I started my company on my reputation, my friendships and my relationships," she says. "So it was more important to me to deliver on my promises to those people than to grow. But as a result of that, I grew.”
Scully, who was chosen for the Ernst & Young Winning Women Program in 2009, continues to capitalize on her networks to grow her company, which posted $5 million in sales last year and is on track for $10 million this year. “You can’t take a gunshot approach to networking,” she cautions. “You have to focus in on a core group of people who can help you grow your business. And you can never forget that you have to help others if you expect them to help you.”
Learn From Your MistakesFor her part, Shazi Visram, the co-founder and CEO of Manhattan-based Happy Family, never had a problem thinking big. “We have a far-reaching vision to change the way children are fed in this country,” Visram says, “and you have to think big if you’re going to tackle that problem.” Ten years ago, she and co-founder Jessica Rolph set out to create an alternative to highly processed baby food in jars. Their solution: frozen, organic baby meals.
Though consumers who tried the product loved it, the meals never gained much traction in stores because moms were just not accustomed to shopping for baby food in the freezer aisle. “We were asking the consumer to totally change behavior and we realized that frozen wasn’t the place where we were going to grow.” It was a huge lesson for Visram and Rolph: No matter how great your product is, everything ultimately hinges on consumer acceptance.
Courtesy of Shazi Visram
After successfully launching several dry cereal and snack products and landing distribution in Target, the founders stumbled upon another jar alternative in late 2009: the pouch. “It had 10 percent of the carbon footprint of a jar, was more convenient, and the technology allows you to maintain the integrity of the food inside,” Visram says. Leveraging her relationship with existing investors and with Target, Visram managed to raise $8 million to move forward with the idea. This year, Happy Family is on track for $35 million in revenue, up from $13.3 million last year.
Connect with Your Peers
It may not take a village to build a company but it’s a heck of lot easier—and more fun—to do it with peer support. And this is a practice that older female entrepreneurs can learn from their younger counterparts. GenY entrepreneurs are all about creating community, both online and off, and the connections they foster help set the stage for growth.
Take, for instance, Women 2.0, a San Francisco-based media company that Shaherose Charania founded in 2006 with the goal of increasing the number of female founders in the tech industry. “We did a study with our community and found that the number of women involved in starting a company had doubled in three years,” Charania says. At the same time, Women 2.0 tripled revenues through its conferences and corporate sponsorships. “It was an unexpected business but it happened because people wanted it,” she says. She points to recent high-profile acquisitions of female-run companies (SlideShare to LinkedIn; Chomp to Apple; Wildfire to Google) as inspiration for a new crop of women entrepreneurs.
Courtesy of Shaherose Charania
“One of the key things about young women is that they want camaraderie and they want support,” says Natalie MacNeil, an entrepreneur who organizes YEC Women, a subgroup of YEC (Young Entrepreneur Council), a membership-only advocacy organization that also provides peer support. There are approximately 100 members of YEC Women who connect on a private Facebook page, on Google Hangouts, and in person. “We talk about the challenges we’re having,” she says. Scaling while maintaining your core mission and values is a big topic, she notes. “I find that a lot of women are afraid of taking on team members and are more likely to do everything themselves,” she says.
Build a Great Team
While many entrepreneurs—men and women alike—cling fiercely to the day-to-day tasks of running their companies, doing so persistently is a huge impediment to growth. “I think a lot of women’s backup strategy is ‘I can always work harder if I need to,’” says Diane Hessan, the founder and CEO of Communispace, a Boston-based company that generates consumer insights for brands via online communities. “But if you decide you want to grow, working 18-hour days doesn’t scale.” For Hessan, who sold her company to Omnicom Group in 2011 and now has over 400 employees, growing meant hiring the right people at the right time.
Courtesy of Diane Hessan
When her company was young, that meant bringing on multi-talented generalists who could and would do anything. “Our first CTO was also our lawyer and he also managed one of our communities,” she recalls. But as your company grows, you need specialists—particularly ones that fill in your own knowledge gaps. “When you come across major talent, you have to go for it,” she advises. “Bringing in one additional fabulous person can make a huge difference.”
The bottom line: You need to be willing to give up control, hand the reins over to others, and build a team that can run your company so that you have the time to think strategically.
“It’s not my job to be the smartest person in the room,” Hessan says. “It’s my job to listen hard when the person who has the insight is telling me something important.”
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