Defining a Dream
As the busy founder and president of Latitudes International, a private-label designer and manufacturer of fragrance products such as candles, potpourri and room sprays, Jill Belasco may not be stopping to smell the roses every day. But she'll definitely do so now that she's been chosen as winner of the OPEN From American Express and Entrepreneur magazine's Woman of the Year Contest. While some would have found the twists and turns of her entrepreneurial ride too tumultuous to stomach, and her unexpected obstacles insurmountable, Belasco and her business have emerged successful.
Bankruptcy has been a running theme in Belasco's life, though the bankruptcies were never her own. She worked in the cosmetics and fragrance industry before a brief stint with an outside company that filed for chapter 11. While searching for her next job, she did a freelance fragrance project as a favor for a friend--and realized fragrance was her true calling. "From there, I didn't look back," says Belasco, 49. In 1994, Latitudes International was born.
Sales for Belasco's company grew steadily, but when its biggest customer filed for chapter 11 in 2003, it sent shockwaves through Latitudes. "[The customer] had always been a little shaky financially, but we'd always been careful about it," says Belasco. "We had some warning, but not enough to get all our money out of them." And although the troubled customer was bought out the same day it filed for chapter 11, Latitudes' revenue from the company dropped from $4.3 million in 2003 to $1.8 million in 2004.
Belasco had to make tough decisions. She rationalized, "We can either dramatically cut back staff, which will hamper servicing the customers we do have, or we can keep [serious] controls on expenses." Sitting down with her staff, Belasco announced the news. No raises or bonuses were given that year, and Belasco and her senior vice president took pay decreases. In their rebuilding phase, they sought out and gained new customers, and their former number-one customer became their fifth largest. Belasco is proud to say that Latitudes projects 2005 sales of $12 million.
While she doesn't consider it a mistake, Belasco does regret not "diluting" the relationship with that company sooner. Because a friendship had been established between the two businesses, Belasco let the customer stretch on payments a little too often. But that's no longer the case. "We stop shipping the minute we feel uncomfortable," says Belasco. The main lesson she learned from the experience was that her company and employees come first.
To be truly successful in business today, competitiveness, compassion and clarity of vision--our criteria for choosing the contest's winner--are entrepreneurial musts. Belasco embodies all three. "I come from a big family, so I grew up where a competitive environment was part of everyday life," says Belasco. "[With Latitudes,] we're willing to do just about anything to get a customer and make a customer happy." Belasco believes compassion for her employees and the charities Latitudes is involved with encourages those she works with to show compassion. "By nature, if you're a compassionate person, it shows in your everyday work," she says. Finally, Belasco believes single-mindedness is crucial in pursuing a company's vision. Her clarity of vision was apparent as she executed the plan to survive her client's bankruptcy.
Those three qualities have been useful to Belasco when she faced additional challenges as a woman entrepreneur. Initially, Belasco had some difficulty with the banks she approached for financing. One senior banking officer--a woman--suggested Belasco get a "sugar daddy" to make the financing work. From that point on, Belasco researched banks and lending facilities that advertised their friendliness toward women-owned businesses, and she queried other women business owners for referrals. Before she had built a track record, she brought her brother, Latitudes' attorney, to several meetings because it was easier to get her voice heard with him there.
Belasco has long asked her senior vice president to tear out three items from Entrepreneur every month that they can review together. "When I read about other people, that's when I feel entrepreneurial," says Belasco. This month, she's the entrepreneur inspiring others.
The potential for success is within each individual, according to Belasco's top five tips:
- 1. Be brave. "Don't be afraid to take risks or be the first to try something," says Belasco. "Don't be afraid to say no or yes."
- 2. Be committed to excellence. "That means excellence in your relationships with customers and employees, as well as in your product or service."
- 3. Be flexible. "[This includes] watching trends, changing what you do, trying new ideas. Also, be flexible with your customers--give them anything you can. And be as flexible as you can with your business."
- 4. Be involved. "If you're an entrepreneur, you need to be involved every step of the way, from the customer to the product to the service."
- 5. Be a family. "Hire smart. Hire people you'd want [to be around], since you're going to spend so much time with them."
--April Y. Pennington
Minorities, the New Majority
Zoa Martinez already knew she had the entrepreneurial spirit as a teenager. A gifted artist, she made money doing calligraphy projects for every club at her Miami high school. "I would get a couple of dollars for each [project]," she says. "From a young age, I was already working." She eventually arrived in New York City, determined to be an artist. She worked for ABC and NBC as a freelance designer, but wanted more. Today, forty-something Martinez is founder, president and creative director of 6-year-old Zona Designs, a 13-employee design agency whose client roster includes A&E, the Discovery Channel and ESPN-Disney. The company generated revenue of $2.8 million in 2004. "I've taken a lot of risks," Martinez says. "In New York, it's about fame and fortune. The fortune is still to come, but I'm happy."
The itch for self-made fortune is a trend among minority women. Firms owned by women of color are growing at six times the rate of all U.S. firms and represent nearly 36 percent of all companies owned by people of color, according to the Center for Women's Business Research. In 2004, an estimated 1.4 million privately held firms were owned by women of color, employing nearly 1.3 million people and generating $147 billion in annual sales.
"It's fantastic," says Sharon Hadary, executive director of the Center for Women's Business Research in Washington, DC. "Entrepreneurship is an opportunity that knows no race or ethnicity."
The desire to contribute more to the family income and the fact that more women in general are running their own companies are factors behind the trend. "You're not an outlier now if you're a woman who owns her own firm," says Sharon Freeman, president of The All American Small Business Exporters Association, a Washington, DC, group that researches issues affecting minority, immigrant and women-owned firms in the global marketplace.
And banks want a piece of the market. "It's a huge growth opportunity we want to support," says Rebecca Macieira-Kaufmann, executive vice president and small-business segment manager at San Francisco-based Wells Fargo, which is forging a 10-year, $20 billion lending commitment to women-owned businesses.
Life can be an uphill climb for some of these entrepreneurs, but it only seems to fuel their desire for self-made success. Jeanette Jenkins, 31, grew up in government housing outside Toronto, the daughter of a single mother. Playing sports was an escape from reality in her neighborhood. "I [saw] a lot of drugs and a lot of sadness," she says. Sports were her safe haven.
At 16, Jenkins moved to Ottawa to be less of a financial burden to her mother. She eventually enrolled at the University of Ottawa and became a certified personal trainer. "I fell in love with teaching and training," she says. At 22, she moved to Hollywood, where she worked for fitness chains and conducted one-on-one training on the side. In 2002, she started her company, The Hollywood Trainer, which works with celebrity clients including Queen Latifah. Jenkins has a fitness video series and partnerships with BET, Lady Foot Locker and Nike. The company projects sales of $1 million this year. Still, breaking marketing barriers is a challenge. "A lot of companies are scared to put that black person on the front, because they have their marketing research," she says. "You can't be mediocre; you have to be fantastic."
You also have to be ready to take some risks with credit. A 2002 Wells Fargo survey revealed only 39 percent of black women business owners had access to bank credit, compared to 44 percent of Asian-American women, 46 percent of Hispanic-American women and 60 percent of Caucasian women business owners. Comfort level in borrowing from a bank instead of relatives is a factor. "You hit cultural issues about [borrowing] preferences," Macieira-Kaufmann says.
Demographic trends will lead to even more women of color, particularly Hispanics, starting their own businesses over the next decade. Martinez, for one, cringes at the word minority. "We're the new majority, not the minority," she says. "That's why I don't like that word."
Her advice? Silence your inner critic, and don't be afraid. "Look in the mirror and say, 'Well, why not me?' [Then] expect to work really damn hard."
Take It From Her
What does it take to make it as a minority woman entrepreneur? We asked super-successful Janice Bryant Howroyd, 53, founder and CEO of Act-1 Personnel, a Torrance, California, staffing firm that generated revenue of $483 million in 2002, for her perspective.
Entrepreneur: What's your background?
Janice Bryant Howroyd: I [am] the fourth of 11 children. It was only during my first year of university that I discovered we [were] poor. The best thing our parents did for us was impress on us that education is freedom.
How do you navigate and survive real, day-to-day challenges?
Howroyd: Continuing to invest yourself in your business is fundamental. This means you never ask an employee to do anything that you will not do. You must make your highest priority attracting and keeping the [most] competent employees you can afford.
What advice do you have for other minority business owners?
Howroyd: Invest your resources into your business as strategically and fully as you can. Remember that when you invest yourself in a business, you are taking a loan from many family members that money will never repay. You're borrowing their time, their faith and their support. Keep learning, and let your life--on a personal and professional level--be the best lesson you ever teach anyone. Never compromise who you are personally to become who you wish to be professionally.--Chris Penttila
Helping Other Entrepreneurs
Friends for 25 years, Hedy Ratner and Carol Dougal finish each other's sentences and trust one another completely. They're the women behind the Chicago-based Women's Business Development Center and have been fighting for women's economic empowerment for 20 years. Says Ratner, "When we started the center, it was an extension of our frustration that women still were not reaching parity and equity in the marketplace."
In 1986, Ratner and Dougal, then in their 40s, poured all their time and energy into the creation of a center that would provide women with the resources they need to pursue their entrepreneurial dreams. The battle was long and hard as they struggled for more than a year just to get funding. Says Dougal, "We faced challenges that were analogous to [those] that women were facing when trying to start their own businesses."
Now, the center has served more than 50,000 women; facilitated over $35 million in loans; impacted federal, state and local policies; and helped certify countless companies as Women's Business Enterprises. And though challenges such as gaining access to capital, debt equity, and business opportunities still exist, Ratner and Dougal are optimistic. Dougal says they are encouraged by the new women entrepreneurs in their 20s and 30s who "are dreaming big, just like the boys."
The duo continues to work with as much passion as ever. "It's exciting, because you wake up every morning [and] look at the opportunity for changing the role of women," says Ratner. "That's a big deal."--Sara Wilson
Cracking the Code
It's no secret: Women entrepreneurs get short shrift when it comes to venture investment. Even when venture dollars peaked in 2000, the typical venture-backed company was still run by--and financed by--men.
Little research has been done on this subject, and even less on its root causes, but the situation is starting to get the attention of civic and business leaders. Now, their efforts to correct the disparity are cracking open the door to venture capital financing for women entrepreneurs everywhere.
A landmark 2004 study by Growthink Research found that only 4.1 percent of venture dollars go to women-led companies. Since then, studies by other groups have shown similar results. "Depending on what study you read, you'll get 4 percent to 7 percent," says Nancy Sullivan, director of the Center for Women Entrepreneurs in Technology at Northwestern University in Evanston, Illinois. "The number is miniscule, what-ever study you read."
The Center for Women Entrepreneurs in Technology is one of several organizations to recognize and support the key role that women play in emerging businesses. Others include the Kauffman Foundation's Women and Minority initiative, and Springboard Enterprises, a nonprofit that works with women entrepreneurs seeking VC funding.
Amy Millman, president of Springboard Enterprises, says these efforts are already making a difference, as the number of women-led companies receiving venture funding is finally on the upswing. "It's not a tsunami," she says, "but relatively speaking, it is an amazing change." Context is key to understanding the problem and its solution, says Millman. "Women have been in the professional world with degrees and credibility in the technology field for only about 10 years." Since venture-backed companies tend to be tech-heavy, Millman is not surprised that women have historically been underrepresented.
One woman entrepreneur who has both raised capital and invested in early stage companies is Mary Baker Anderson. As president of consulting firm Calipa Partners in Seattle, she mentors women on how to get the attention of venture funds and angel investors. "The good old boy network is alive and well," says Anderson, adding that this network will remain largely closed to women as long as finance and business leaders harbor basic gender biases and stereotypes. "There aren't many role-model women, and the ones that [exist] are so busy being successful, they aren't giving back."
Nonetheless, the growing number of support organizations seems to confirm that women entrepreneurs are building "fundable" companies but simply lack the skills and the opportunities to pitch their businesses to qualified investors. Breaking into this historically male-dominated network requires women to think and act in ways that might be uncomfortable, suggests Millman of Springboard.
Fundraising success comes from telling investors what they want to hear-and investors want to hear about the money. "But you pitch what you're comfortable with, and women often pitch their product," Millman says. "If you're asking for $10 million, the investors wants you to be in their face, and [most] women can't do that--it's so against their grain." To help women make the right presentation, Springboard assigns a team of mentors to each client and takes her through a rigorous investment "boot camp."
The results can be amazing. Graduates of Springboard's boot camp have gone on to raise hundreds of millions of dollars. Star examples include Helen Greiner, co-founder and chairwoman of the board of iRobot, which makes the Roomba vacuum cleaner, and Deborah Manchester, president of Zula USA LLC, an educational content production company in Studio City, California. Manchester says the focus and confidence she gained at Springboard helped her raise over $7 million to start production of an educational TV show, The Zula Patrol, that now runs on PBS.
"It's a pretty incredible process," Manchester says of the Springboard boot camp. "It really helps you focus on what your message is--for the company and the investment. Over a six-month period, it was refined and further refined, so finally I could tell you everything within just 10 minutes."
Successes like Greiner's and Manchester's are paving the way for more women entrepreneurs. "The more we train women entrepreneurs and give them access to investors, the better off we're going to be," says Anderson. "There are groups all over the country now [helping women get financing]. There's a huge population of women who have a lot to contribute, and we have to figure out how to effectively allow them to do so. And there are a lot of people committed to that."--David Worrell
Resources for Women
Are you in desperate need of a bag to carry around your laptop--but you want your fashion sense to shine through? Check out these fun and funky laptop cases from three entrepreneurial companies.
The Big Steve Collection from Case Closed Bags is a funky, tailored line. Ranging from $149 to $240, the nylon or leather bags have plenty of pockets and interior foam padding. Shown in rust Chinese, the line also comes in black, sky blue, khaki green, red and black-and-white pinstripe with a white flower. Check out the Neal, Sam and Bob collections at www.caseclosedbags.com for lower-priced and more casual options.
The $25o Tweedy Pie bag from melissa beth designs is a throwback to 1960s high fashion. Available in bubble gum, ice cream and mint, it sports a tweed exterior with leather trim as well as a removable, foam-padded interior sleeve. Measuring 16-by-13-by-5.75 inches, the tote is large enough to use as a day bag and hold a change of clothes. For other classic options, take a look at the What-a-Croc, Get Off My Case and Pocket Full of Puter lines at www.melissabethdesigns.com.
Denyn Sleeve by MARKA is a chic bag of quilted Italian leather with thick interior padding. The $595 espresso or black bag with beige accents includes a removable wallet, a pouch for power cords, a small mirror and slots for pens and lip glosses. Visit www. markaonline.com to find other stylish lines like Charlie Case, Vincent Voyager and Corwin Tote, which are all named after the designers' ex-boyfriends.
As women-owned businesses grow at a phenomenal rate, OPEN, the small business team at American Express, is providing services and resources for these businesses. OPEN has long had partnerships with women's business groups such as the National Association of Women Business Owners and the Women's Leadership Exchange. Recently, in partnership with Count Me In, a micro-lending organization for women entrepreneurs, OPEN has also launched the Make Mine a $Million Business Award to boost revenue for the 20 women-led companies that receive the award. "We're working to identify women in key markets to provide them with access to money, a dream team of business advisors and great marketing expertise. We want to give them the resources to bring their businesses to that million-dollar-plus level," says Susan Sobbott, president of OPEN.
Visit OPEN's Women's Business Initiative website for information on the myriad products and services available. Whether you're making business decisions or balancing a company and family life, OPEN hopes to make the experience a bit easier. "[As] the daughter of an entrepreneur, I understand the challenges of running a business," says Sobbott. "I [am] also a mother of two, so I have some empathy for other mothers who are leading businesses themselves."--Nichole L. Torres
- Center for Women's Business Research
Resources, research, links
- Count Me In
Workshops, videos, micro-lending
Workshops, conferences, one-on-one meetings
- Forum for Women Entrepreneurs and Executives
Networking, education, business directory, resources
- National Association of Women Business Owners
Networking, training, conferences and seminars
- National Women's Business Council
Research, listings of events and useful publications
- Springboard Enterprises
Learning center, including videos and other tools; events
- Women Presidents' Organization
Monthly meetings featuring guest speakers and advisors
- Women's Business Enterprise National Council
Certification for women-owned businesses, resources
- Women's Business Initiative from OPEN
Partnerships with women's business organizations, resources
- Women's Leadership Exchange
Conferences, resources, network directory