Does size really matter to women entrepreneurs?

March 12, 2010

The results of a new survey show that nearly 90 percent of women business owners want to grow their companies, but few of them see hiring as a way to do it.

Nell Merlino, the founder and president of Count Me In, a not-for-profit organization that includes 70,000 online members, commissioned the report that polled 250 women small business owners and another 700 non-business owners nationwide. Merlino said the survey shines a light on why women-owned businesses don’t grow at a similar rate to those run by men and why broader societal misconceptions are preventing many women from expanding their businesses.

“There is a perception on the part of the public in general that women are in business to bring in a little money, as opposed to women are in business because they are supporting their families and they want to grow a business,” said Merlino, quoting the study’s findings that just 38 percent of Americans believe women entrepreneurs care about making a lot of money, compared to 63 percent who said male entrepreneurs care about the same.

Merlino, whose organization provides support to women business owners, said this is a troubling statistic, since women currently account for about a third of all U.S. small businesses. “You have 8 million women who have businesses and most of them are really small. Are they small because we want them small, or are they small because we’re missing a few steps? I continue to believe it’s because we’re missing a few steps, not because we all woke up and said I want to have a really tiny business and work 24 hours a day and not make any money.”

Merlino, who also started the Make Mine A Million $ Business campaign that helps women convert micro businesses into million-dollar ones, said the biggest impediment to growth is the belief among the majority of women small business owners that being more efficient is the best way to grow revenues. Merlino said this works for big corporations that have huge budgets and thousands of employees, but it doesn’t work for a startup with little or no staff.

Once they’ve successfully launched their business, women should instead be looking to get their hands on some capital so they can hire workers, said Merlino, whose survey showed that a mere 23 percent of women entrepreneurs look to do so.

“Women historically have done a lot of things by themselves – particularly in the household – and I think a lot of women take that learned behavior to their business and it doesn’t work,” said Merlino. “I would argue if women would start to understand the value of hiring we could do it faster and given the need for jobs it would be a great thing if they did.”

Pauline Lewis, who has received coaching from Merlino’s Make Mine A Million program, is one of those women who is trying to grow her business, but confessed she just doesn’t know where to begin to look for funding. Lewis launched her Washington, D.C.-based handbag business, Oovoo, six years ago and said her revenues are upwards of $500,000.

“I’ve hit a plateau where we’re unable to grow without putting in more capital into the business, which I don’t have,” said Lewis, who has just one part-time employee, but wants to be a “4-5 person company” in the next five years. Lewis, whose bags are made in Vietnam, doesn’t carry much in the way of inventory and operates on a made-to-order model, which she credits with helping her ride out the recession.

While her business remains alive, Lewis said her client list, which includes boutique owners and catalog companies, has shrunk by more than two thirds, falling from about 150 in 2007 to 50. Lewis said she has an untouched line of credit of $50,000, but feels she needs to bring in outside investors in order to considerably boost sales and expand the business, which she currently operates out of her home.

“The immediate challenge for many business owners is cash flow and being able to get some working capital, or just staying afloat,” confessed Lewis, adding her goal this year is to position her company to be able to grow when the economy rebounds. “I want it to be something other than a home-based company with handbags in my garage and working 20 hours a day.”

2 comments

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One should not judge business success on its size. Being independent, making decisions on your own, being a master of your destiny, and being fulfilled is what ultimately matters. Having employees can be a headache. It is usually an extension of one’s ego. Running a business that is your “baby” is extremely satisfying.
By the way, I am guy that is 56 years old and has had a business in the U.S. all my adult life except when I worked as an undocumented worker in Europe and Japan. I have no regrets.

Posted by michaelmoore | Report as abusive

Where is my relevant, benign, comment.

Posted by michaelmoore | Report as abusive

[...] Does Size Really Matter To Women Entrepreneurs:  Interesting read about how women entrepreneurs differ from men. Also lots of phrases and assumptions that may make you want to jam a pen in your eye. But that may just be me. [...]