Starting and running a business takes intelligence, determination, and a certain amount of sass. It’s no surprise, then, that in a recent survey, nearly three-quarters of women business owners credited their determination and drive for their company’s success.
Women have long been under-represented in entrepreneurship, yet the number of women entrepreneurs in the US has increased over 30 percent since 2007. For some more recent and interesting data, according to Smallbiztrends.com, 57% of women business owners expected their revenues to increase in 2020. This suggests that women-owned businesses are just about as likely to grow at a similar rate as male owned businesses (59% of male-owned businesses said they expect revenue growth).
Over the past 15 years, these women- owned firms have grown at a rate 1.5 times greater than other small businesses and were estimated to provide more than 5 million jobs by 2020. Whether women more quickly become dissatisfied with climbing the corporate ladder or just can’t ignore the drive to pursue their passions, female business owners have historically begun their entrepreneurial journeys earlier in life than their male counterparts. According to a 2019 survey, 51 percent of female business owners were under the age of 50 when they launched, compared to 44 percent of men. However, the largest group of female respondents were in their fifties, so it seems women are becoming business owners at almost every stage of adult life.
The latest numbers regarding women in business can’t be ignored. There are 9.1 million woman-owned businesses nationwide, employing 7.9 million employees and generating $1.4 trillion in sales, according to the National Association of Women Business Owners.
Most successful women entrepreneurs draw on certain strategies and mindsets to gain and keep an advantage. A 2019 Citizens Bank Survey identified seven key components on the road to success
Reliance on outside support
Women at the helm of the fastest-growing companies recognize that it takes a team to sustain success. In fact, the top performers in the survey were nearly four times as likely as their peers to credit support from a mentor, advisor, or peer group for their success.
Gender as a strength
Compared to their counterparts at other companies, nearly twice as many co-owners of fast-growing businesses say that being a woman has helped fuel their success. Some say it makes it easier to gain trust and forge strong bonds with clients; others say their gender has driven them to work harder.
Strategic financing
Nearly three-quarters of the fastest- growing women-owned companies currently have some form of financing in place, compared with around just 30% of their peers. The most successful firms are also twice as likely as others to use financing to invest in growth and improvements and manage cash flow fluctuations.
Sources for financial advice
Nearly 90% of the leaders of the top- performing female-owned businesses lean on good sources of financial guidance. This is compared to around three- quarters of their peers. Online research, an accountant, and networking connections are just a few of the resources the most successful owners rely on to keep their companies healthy.
Efficiency
Owners of the fastest-growing firms use technology to streamline money management and gain clearer insights into their financial position. Leading tools include:
Digital banking. Top-performing businesses are 35% more likely to use online banking and nearly 25% more likely to use online bill pay than their counterparts. They’re also nearly 60% more likely to bank via their mobile phones.
Financial software. More than 30% more fast-growers use QuickBooks Online, Zoho Books, and similar programs than other companies. They’re also three times as likely to use integrated software suites such as QuickBooks Desktop, Microsoft Dynamics, and SAP to tie together sales, financing, and other parts of their company.
Sound invoicing practices
The most successful business owners know that efficient payment collection is essential for healthy cash flow. The fastest-growing companies are 60% more likely than others to bill customers promptly upon completion of a project or delivery of a product or service. They’re also twice as likely to offer discounts to encourage fast payment and to accept payment options that offer quicker access to cash, such as credit cards and PayPal.
Looking to the future
Top-performing business owners know that continued success depends on the ability to spot opportunities and challenges ahead. In the Citizens Bank survey, the heads of the fastest-growing businesses were three times as likely as their counterparts who do not expect revenue growth this year to maintain focus on sales to avoid cash shortfalls. Fast growers are also more likely to closely monitor cash flow to identify potential trouble spots, allowing them time to correct course.
The downside is that barriers in the standard workplace environment, in some part, drive this growth in female entrepreneurship. Not everyone wants to be an entrepreneur -it involves emotional and financial rollercoasters than many can’t navigate.
So how can women help other women in their entrepreneurial ambitions? Cultural transformations, whether they be in an organization, an industry or any environment typically fail unless there is a framework and diverse mechanisms to translate desire into action and lasting change.
As we move into 2020, a Bank of America survey found that women are optimistic about their businesses’ futures, with ambitious growth plans. In fact, they are more likely than men to plan to hire, expand or apply for a loan in the next 12 months. Some 84% of the women surveyed expect their revenues to grow year- over-year. What’s more, 52% expect their local economies to improve, and 47% expect the national economy to improve.
However, women business owners also have significant concerns about the future. One of the leading concerns is access to capital. Digging deeper into how women feel about access to capital, the survey uncovered some unsettling news.
Although most women entrepreneurs believe access to capital has improved over the past 10 years, 58% say they don’t have the same access to capital as their male counterparts.
Only 34% of women surveyed believe women business owners will ever gain equal access to capital. On average, they believe it won’t happen until 2033.
And 24% of the women surveyed don’t think women will ever have equal access to capital.
Part of the problem is that 54% of men entrepreneurs surveyed think women business owners already have equal access to capital. Business financing options such as venture capital, angel investment and bank loans are still predominantly overseen by men. If men don’t see a problem, it’s hard for the situation to change.
But the perception is beginning to change and there is optimism that as women-owned businesses flourish, the natural law of economics will bring capital to them. Women entrepreneurs can take heart in knowing they have the power to effect change. By setting the example, charting the way and helping other women, we can create a better world for all women entrepreneurs. .
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