In the past, women-owned businesses were often thought of as small, conservative ventures keeping a tight rein on growth to stay manageable, but that may be changing. A report late last year by the Center for Women's Business Research (formerly the National Foundation for Women Business Owners) says women-owned firms formed in the last decade are more growth-oriented than their predecessors.
The report, "New Generation of Women Business Owners," states that a larger share of firms started by women within the last decade have experienced fast growth-particularly within the past three years-compared to firms started in the two decades previous to that. "While this may partly be due to the fact that many businesses experience faster growth in their early years," says Julie Weeks, the center's director of research, "women who started their firms within the past 10 years have already reached the same level of business employment and revenue size as their older counterparts."
"We're beginning to hear as much about the need for business expansion assistance as for start-up help."
Fueling the new turbo-charged women-owned businesses, the report says, are business owners who are highly educated and more likely than previous generations to have management experience, often in the same industries as their businesses.
Take the example of Darlene Ryan, president of PharmaFab Inc., a Grand Prairie, Texas, pharmaceutical manufacturer. Ryan has bachelor's degrees in mathematics and German and an MBA in accounting and finance. She is also a CPA.
"I'm not sure I know how to be anything other than growth-oriented," admits Ryan, 47. "I am very strategically oriented as a business owner, not the sort who has my hands in the actual running of the equipment. I spend my time figuring out where we're going next and how I'm going to lead the charge to get us there." That growth-oriented attitude took PharmaFab from $395,000 in revenues during its first full year in business (1996) to sales of $6.5 million in 1999 and $15 million in 2001.
Wilma Goldstein, assistant administrator of the SBA's Office of Women's Business Ownership, has also noted the changing face of women entrepreneurs. "We are beginning to hear as much about the need for business expansion assistance as for start-up help," she says.
Another kick-start to growth, suggests the center's report, could be the "new generation" business owner's eye toward outside money. Of women who started businesses in the last decade, 41 percent are actively seeking growth capital, compared to 25 percent of those who started earlier.
Despite that statistic, women-owned businesses still receive a tiny share of overall venture capital. According to VentureOne, a San Francisco-based research firm, in the first half of 2001, women received only 7.79 percent of the venture money that was invested in U.S. companies during that period-an increase of just 2.15 percent since 1999.
According to an earlier report from the center, "Women Entrepreneurs in the Equity Capital Markets: The New Frontier," the primary factors keeping women-owned businesses from getting funded are their limited access to venture capital networks and to advisors who are tapped into those networks. To help close the equity gap, Weeks advises, seek guidance from advisors who are connected to equity capital networks, and look for senior managers, advisors and investors who share your vision of growth.