Online exclusive: To check out our interview with real estate guruKim Kiyosaki and to read more tips from our Woman of the Year Maureen Kelly, visit our Entrepreneurial Women's Center.
As founder of Tarte Cosmetics, a New York City company that makes portable, user-friendly products for women on the go, Maureen Kelly is in the business of making real women look and feel spectacular. Kelly regularly turns heads with her innovative packaging and products, but it is her competitiveness, clarity of vision and compassion as an entrepreneur that made our heads turn and ultimately decide to select her as the winner of this year's OPEN from American Express and Entrepreneur magazine Woman of the Year Contest.
Kelly, 34, didn't possess much more than an idea when she gave up pursuing her doctorate in psychology to launch her own line of cosmetics in 1999. Having too often fallen victim to makeup artists in department stores who would leave her beautiful but poorer and unable to recreate the look later, she knew there was a need for more down-to-earth makeup that was simple, easy to use and conveniently packaged. So despite her complete lack of experience in the industry, she went ahead full-force.
After extensive research of laboratories and chemists who could bring her vision to life, as well as numerous trips to fabric markets to find the best leather and fabrics for the packaging of her cosmetics, Kelly invested $20,000 from credit cards and savings and fearlessly went against the industry's top names. "Looking back, I realize I was entering an industry with huge competition: Est�e Lauder, Lanc�me, big companies that had millions of dollars in advertising budgets," says Kelly. "Because I was very green, I [thought], 'Why should they be able to do it, and I can't?'" Because Kelly did not shy away from competition, she has now created her own powerful presence in the industry.
Sales for last year broke $15 million, but Tarte's success might not have been realized had it not been for Kelly's vision. Staying in touch with her customers' needs and desires is a priority and the reason Kelly launched a public forum online. Members visit and provide feedback, which Kelly uses to make her company stronger.
Kelly has also made it a point not to grow too fast. For two and a half years, she and four employees ran the business out of her one-bedroom, rent-controlled Manhattan apartment to minimize the cost of overhead. And when offers for partnerships came pouring in early on, including one from popular shopping network QVC, Kelly said no in the best interest of the company. "I wanted to make sure that we were delivering amazing products and staying true to our customers and always having the inventory," she says. "I've seen so many brands that have come and gone because they were everywhere all at once."
In 2005, Kelly was ready to pursue a partnership with QVC. It has been an extremely beneficial relationship, and QVC has invited the company to do a "Today's Special Value" in the spring, meaning for a 24-hour period, one product will be sold at a discounted rate. The exposure translates into a million-dollar opportunity.
But perhaps where Kelly shines the brightest is in her compassion for others. This year, the company contributed to and helped build a house for Habitat for Humanity. In addition, 15 percent of select products' proceeds goes to the Young Survival Coalition, a group of young women united to fight breast cancer. Says Kelly, "We've been all about giving back because people have helped me on the way and I've been given wonderful opportunities. You have to give back no matter how small you are."
Beauty may be subjective, but Kelly's drive, focus and passion glow for all to admire. Meanwhile, challenges continue to arise. Getting her products to the United Kingdom by spring has been keeping the company busy, and Kelly just became a mom to a baby boy. Through it all, she never skips a beat. "That's what I thrive on," she says. "I feel like if I didn't have challenges or issues, things would get boring. I love coming in to work every day and expecting the unexpected. It's something different every day, it's something crazy some days, but we deal with it."--Sara Wilson
To read Maureen Kelly's tips for success, go to www.entrepreneur.com/women.
Angels in Flight
When Sharelle Klaus launched Dry Soda in 2005 to produce and distribute her brand of nonalcoholic beverages to high-end restaurants and food retailers, she didn't have to look far for potential backers. As president of the Forum for Women Entrepreneurs in Seattle, it was her job to network with angel investors. So when it was time to raise equity capital of her own, she quickly put her address book to work. "When I started, all my connections were with high-tech investors," recalls Klaus, 37, "but those high-tech investors knew other investors." Not only did those other connections invest in her business, but they also helped her staff the approximately $1.5 million company and find distributors. Klaus also recently completed a $1.5 million round of angel financing.
A recent study from the University of New Hampshire Center for Venture Research shows that women outperformed all entrepreneurs in receiving angel investments to fund their business ventures in 2005. Although women-led ventures accounted for 8.7 percent of the entrepreneurs seeking angel capital, 33 percent of those women received angel dollars in 2005, while the overall rate was just 23 percent, according to the study.
"That's a really recent trend, and I was amazed when I saw it," admits Stephanie Hanbury-Brown, founder of Golden Seeds LLC, an angel investor group based in Cos Cob, Connecticut, that invests exclusively in women-led firms. "The [number of] women entrepreneurs getting venture capital has [hit] a 10-year low."
"At the same time, women are starting businesses at twice the rate of men today," Hanbury-Brown adds, citing a statistic from the Center for Women's Business Research. "The quality of the women starting businesses and the quality of the businesses they are starting has increased in the past several years."
But advocates for women-led firms argue that entrepreneurs like Klaus may be exceptions. More often than not, they say, women entrepreneurs lack access to the traditionally male world of angel investing. That--combined with angels' tendencies to invest in only high-tech ventures--has kept many women entrepreneurs at arm's length.
"[Until recently], women's experiences were more in industries that didn't grow in scale as much, so they were not as likely to be candidates for large equity investments," says Marianne Hudson, director of angel initiatives for the Ewing Marion Kauffman Foundation.
In fact, it was the "imbalance of VC investments that go to men entrepreneurs" that moved Hanbury-Brown to launch Golden Seeds in 2004. "I realized women were starting companies in a whole range of industries [where] typical angel investors probably would not get beyond the executive summaries in their business plans," says Hanbury-Brown, whose group invests in a variety of industries in addition to technology.
Currently, only about half a dozen women angel groups operate in the U.S. However, that number is likely to grow. "Anecdotally, I would say there is a trend toward more women becoming investors but also more women becoming investors and wanting to invest in women," says Maggie Kenefake, manager of growth entrepreneurship for the Kauffman Foundation.
Experts say women investors are more likely to support a broader range of investment opportunities. Adds Kenefake, "Their number-one priority is a solid investment and a healthy financial return, but I think women investors [are] bringing different life experiences to the table, [giving] them a different perspective, and perhaps they will consider opportunities that their male counterparts might not."--Crystal Detamore-Rodman
Last summer, I saw The Devil Wears Prada, the movie about a powerful fashion magazine editor who tyrannizes her young assistant. Because Meryl Streep's ruthless character gives her protégé outrageous assignments like fetching an advance copy of the latest Harry Potter novel for her kids, we are meant to believe she is the devil incarnate. If a male executive asked his assistant to do things like that, I bet he'd be called a great dad.
I guess Hollywood is trying to tell us that it's OK to run a money-losing children's bookstore that can't compete with a well-run national chain (Meg Ryan in You've Got Mail), but it's not OK to be an ambitious, self-assured female executive who tries to beat her ex-boyfriend at his own game (Demi Moore in Disclosure). In other words, it's fine to be Lois Lane, but it's still not cool to be Superwoman.
Maybe this helps explain the sad statistic that only about 3 percent of women-owned businesses (vs. 6 percent of male-owned businesses) in the U.S. generate more than $1 million a year in sales. That is despite the fact that more than 10 million businesses in this country are at least 50 percent women-owned, and that these businesses employ 12.8 million people and generate nearly $1.9 trillion in sales annually.
As one of those 3 percent--I built my internet marketing company, NetCreations Inc., from a two-person homebased web design firm to a public company generating $58 million in annual sales--I always get asked the same question: Why do most women-owned businesses start at the kitchen table and never seem to go anywhere?
Part of the reason is the desire of many women to keep their companies small and manageable so they can spend time with their spouse and kids--a laudable goal. Other reasons are lack of access to capital and lack of financial literacy.
But I think there is something else going on: Few women business owners are willing to take the kinds of risks that men do. Whether that's because we're afraid we'll fail or because we're afraid we'll succeed beyond our wildest dreams, I don't know.
What I do know is that we need to conquer our fears. When I walked away from an offer to sell my company in 1999 and decided to do an IPO instead, I put everything on the line. It was a big risk, and I was scared to death, but it paid off.
I'm not saying to risk everything on a dream. I always urge my clients to plan their businesses carefully and take things one step at a time. But when that once-in-a-lifetime opportunity comes your way and you're perfectly positioned to hit the ball out of the park, swing for the fences.
Because there are worse things in life than having Hollywood make a movie about what a bitch you are or casting Meryl Streep to play you.--Rosalind Resnick
Pay It Forward
In 1979, Patty DeDominic began her entrepreneurial journey with PDQ Personnel Services Inc. As founder of a temporary staffing business in Los Angeles, DeDominic realized her calling was connecting employers and people who wanted to make career changes. "I was lucky to learn early on that one of my gifts was an empathy with people and employers," says DeDominic, 55. Now, 28 years later, it is her mission to inspire all entrepreneurs to achieve success.
That's why DeDominic provided a $1 million challenge grant to the National Association of Women Business Owners' Los Angeles chapter and its Enterprise Institute in 2006. President emeritus of NAWBO-LA and a member of the organization since 1982, DeDominic remembers the camaraderie and community she experienced there in the early days of her business. "It was my chance to work with peers and women who had similar aspirations about growing their businesses," she says, "[women who] didn't have a lot of capitalization and were looking for ways to implement innovation without a huge budget."
Now head of the PDQ family of companies, including PDQ Temps, PDQ Careers, CT Engineering, and succession planning and consulting firm DeDominic & Associates, DeDominic cites consolidated sales in excess of $25 million annually.--Nichole L. Torres
Winning OPEN from American Express and Entrepreneur's Woman of the Year Contest is just one milestone of many for past recipients. Here's an update on our 2004 and 2005 honorees.
2004 winner Liz Elting, co-founder of TransPerfect Translations Inc., has seen sales at her New York City global language and business services company skyrocket from $35 million when she won to $107 million in 2006. She's acquired a few companies and added several international and domestic locations along the way. Elting, 40, has also added other services under the TransPerfect banner, such as Staffing, Transcriptions, and Diversity and Inclusion, a consulting practice that helps companies with diversity training. "It's been very exciting," says Elting. "We have a lot of amazing people that are making it happen for us."
2005 winner Jill Belasco of Latitudes International, a private-label designer and manufacturer of fragrance products such as candles and room sprays, has seen her Rancho Dominguez, California, company's sales grow from $12 million in 2005 to $17.5 million in 2006. From securing new customers to adding staff and machinery to expanding manufacturing capabilities in the home fragrance categories, Belasco, 50, says this is the best year her company has ever had. Thanks to greater cash flow, she's considering acquisitions to grow the company even more by 2008. Belasco says, "We're having a banner year."--Nichole L. Torres
Opening the Door
Women are starting businesses at extraordinary rates--and OPEN, the small-business team at American Express, has answered their need for specialized services. From co-sponsoring the Make Mine a $Million program with Count Me In, which aims to help 1 million women entrepreneurs get to $1 million in sales by 2010, to continued participation in organizations like the National Association of Women Business Owners, OPEN has an ongoing commitment to women-owned businesses, says Marcella Schinder, vice president of brand marketing and strategy at OPEN.
OPEN will hold a number of events with guest speakers to help entrepreneurs learn about business issues such as marketing and brand building. Last year's speakers included Kate and Andy Spade, Bobbi Brown and Liz Lange. "We heard from women how important it was for them to have an opportunity to network [with] each other," says Schinder. The demand for the events has even inspired OPEN to offer webcasts so nonlocals can participate--more than 6,000 people dialed in to the first webcast.
Up next for OPEN's Make Mine a $Million: more local and state-level grass-roots work with women. "As we build this program, we're finding [that] the women who are involved in it [and] the women who've won want to find ways to help other women," says Schinder. "So it really becomes viral." See for yourself at www.open.americanexpress.com/women. --Nichole L. Torres