Women Businesses Breaking the $1 Million Annual Revenue Ceiling
By Rhonda Campbell
In 2011 more than 8.1 American businesses were owned by women. This is a nearly 50 percent increase since 1997. Obviously women are taking the bull by the horns, stepping forward and meeting the challenges inherit in business ownership. That’s good news. What’s a little troubling is the fact that less than two percent of women owned businesses generate annual revenues of $1 million or more.
Are Women Business Leaders Playing Themselves Small
Women owned businesses also employ smaller numbers of people. In fact, only about 1.9 percent of women owned businesses employ 10 or more people. Part of the reason for the revenue and employee base gap that exist between women and men owned businesses is the fact that women approach business differently than men.
In the Wall Street Journal’s May 17, 2010 “Why Are Women-Owned Firms Smaller than Men-Owned Ones?” Sharon Hadary, former executive director at the Center of Women’s Business Research, states that lack of capital is one of the reasons women owned businesses don’t generate more revenues. In case you’re thinking bankers, public policies and government agencies are to blame, consider this. Many women look negatively on having business debt. Additionally and as reported in the article, “Research from focus groups and seminars shows that many women business owners, especially those of color, believe they would not get credit even if they applied. So they don’t even bother to try.”
Other factors impacting the growth of women owned businesses include:
- Lack of women business owners participating in government and corporate purchasing programs
- Insufficient efforts to network with major players in the business world (e.g. CEOs of Fortune 500 companies)
- Ineffective or lack of mentoring relationships
Getting Beyond the Catch-22 as a Woman Business Owner
Beliefs that bank loan applications, business partnership invitations and requests to secure government contracts will be met with resistance (if not a flat out ‘no’) may well be the number one reason women owned businesses aren’t growing more. Who are the holders of these beliefs? Women.
It’s almost like a catch-22. Years of lack of support combined with failure expectations have caused more than a few women to lower their goals and perhaps even become less assertive. No one likes rejection. However, until women set loftier business goals, do their homework and identify investors eager to support the types of businesses they operate little may change.
What women can do now to turn the tide is to:
- Create rewarding networking relationships with other women business owners
- Cross-promote each other’s products and services, particularly at large industry events
- Become more visible in their industry (e.g. attend seminars that influencers attend)
- Negotiate (being a Jasmine-of-all-trades is commendable; however, a sign of business expansion is the inability to continue to do everything yourself)
- Focus on incorporating new strategies and action steps into business growth goals and consistently following through on those strategies
- Get sufficient insurance (e.g. liability) for businesses they own
It’s also important that women business owners measure the results of their growth efforts. Tracking the numbers of customer sales following a paid-per-click ad campaign or tracking webinar conversion rates are ways to measure results. As women business leaders track the results of their efforts, they will know where to make changes, small or large, as they continue to grow their businesses and get closer to breaking through the $1 million annual revenue ceiling.
Rhonda Campbell, an East Coast journalist, is the owner of Off The Shelf radio and publisher of Long Walk Up and the forthcoming Love Pour Over Me.