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."
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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.
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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.
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