Debunking Myths about Women-Led Businesses
“You’ve come a long way, Baby” was the 70’s ad slogan mirroring the feminist movement of the time but I can't help but ask, have we really? No one disputes women issues have improved but have these improvements translated to our local businesses and pocketbooks?
I am an economics major so I want to see the numbers to become a believer. So I went to the source that advises the President, Congress and the Small Business Administration (SBA) on women’s economic and business issues. I met Amanda Brown, Executive Director of the National Women’s Business Council (NWBC) at the National Association of Women in Real Estate Businesses (NAWRB) Annual Conference. Amanda shared with me the same data that she provided so our government can implement national policy to impact the future of Women Led Businesses (WLB), firms where female founders work more than 30% of founder hours and Women Owned Businesses (WOB), firms where 51 or more percent is owned by female(s).
The data revealed interesting facts about how women’s mindsets control our destiny more than we know and it is our responsibility to pick out chairs in the board rooms and hire the next generation.
Myth #1: WOB are less likely than their male counterparts to have rapid firm growth in the first several years. False. Dr. Alicia Robb and Susan Coleman reported to the NWBC that in fact WOB kept pace with male counterparts however women were less likely to expect high growth during the same period and conversely, were surprised when the growth exceeded their projections.
Myth #2: WLB/WOB are less likely than male counterparts to be approved for external equity. False. The same research showed WLB/WOB received only 2% versus 18% for male businesses from outside equity sources in total funding however the reason was surprising. Women are more likely to be discouraged from applying for loans due to fear of having their applications denied. I gained insight into this surprising mindset from Carol S. Dweck, PH.D. author of Mindset The New Psychology of Success. Studies found that grade school boys received 8x more criticism than girls thus leading researchers to conclude men have learned a higher resistance to outside opinions and less likely to take negative comments as an accurate evaluation of themselves. Dr. Dweck states frankly, even women at the pinnacle of success allow other people’s attitudes to affect them.
[Related: Why Female Role Models Matter]
Myth #3: Startup businesses are more successful if they are debt adverse. False. Rosalind McLymont in her article State of Women Owned Businesses quotes the PNC Financial Services Group, Inc. findings that women on average have 2.7 sources of money to fund their business with 59% using business credit cards and 44% relying on personal/family savings. PNC director of Women’s Business Development, Beth Marcello states WOB describe themselves as debt-averse relying strictly on savings and credit cards for business financing however this leaves few options if a lawsuit, natural disaster or other unplanned events occur forcing liquidation of personal assets unlike their male counterparts who seek excess funding to avoid personal exposure if such events occur.
Myth #4: Starting a business is for the young and to succeed now a business must have young insights into current culture trends. False. SAG Corporation reported to NWBC that younger unmarried women were more likely to become self-employed however were also more likely to close their business and return to working for someone else. Krisztina Holly in Why Great Entrepreneurs are Older than You Think states that out of 500 successful high growth business founders, firms defined as having the highest rate of projected employment increase, the typical successful founder’s age was 40 years old with at least 6-10 years of industry experience and 2x as many successful entrepreneurs are more than 50 years old. Krisztina states that entrepreneur information networks are inefficient, unlike typical markets, thus founders identify opportunities based on their unique prior industry knowledge. NWBC research supports this by indicating that a WOB founder’s industry experience is directly associated with an increased likelihood of firm survival.
Myth #5: Women are good at team building. True. NWBC positively reports that high growth WLB/WOB with a team of women at the helm were more likely to be in high tech industries, incorporated and less likely home based. Further founders tended to have higher credit scores and education with both set of factors increasing the likelihood of external funding options. Thus directly increasing the percentage of these businesses succeeding. Among the 25 largest businesses by gender 60% of WOB were run by female teams.
There is an important theme to these myths and the data results.
- Myth #1 was debunked but highlights women under estimate our abilities to achieve.
- Myth #2 was debunked but shows women won’t ask for the help needed from sources that will objectively evaluate the business for fear of criticism.
- Myth #3 was disproven but again women have a mindset that runs counter to sound business practices increasing likelihood of failure.
- Myth #4 says women should disregard the mindset promoted by the media about youth and overnight success. Age and experience is always in your favor.
- Myth #5 shows when women operate with a mindset that is reinforced by externals they are more likely to succeed.
Therefore, all the data shows that if women adjust their mindsets this will accelerate modern feminism more than a new regulation or government agenda. So You have come a long way, Baby and women do control our future like never before.
Attorney Renee Marie Smith is an 18 year Real Estate industry expert, author of “My Guru’s” book series on Amazon.com and an agent education series in Nevada & Florida. Her articles and blogs are nationally published in N Magazine, Palm Beach Woman, Women’s Council of Realtors PB quarterly, Huffington Post, Mortgage. Orb and Forbes. She speaks nationally at conventions and on radio. @mygurupublishes
Have more questions? Follow up with the expert herself.
Renee M. Smith Esq. PA.
BUSINESS DEVELOPMENT EXPERT • REAL ESTATE AND CORPORATE ATTORNEY•INVESTMENT STRATEGIST Accomplished business visionary with 25 years of experience in business management, consulting, and entrepreneurial execution. Analytical expertise with comprehensive real estate knowledge and proven reputation for improving fiscal operations, executing innovative solutions, and delivering superior growth results. Trusted adviser to executives, leaders, and clients for fostering project completion, alternate funding evaluations and development planning. Expert knowledge in relevant real estate trends, property solutions, and global... Continue Reading
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