So what's holding back so many women business owners?
Over the past decade companies headed by women represented less than seven percent of the startups funded by venture capital firms, even though women launch nearly half of all new businesses.
Kauffman Foundation research shows that successful entrepreneurs running high-growth businesses are similar in almost every respect. Male or female, entrepreneurs have largely the same education, economic background, needs, and challenges. Women, though, are better at building relationships and place greater importance on the moral support, expertise, and financial backing of business partners, while men need far less encouragement from others.
Here are where the problems are according to Sharon Hadary, former executive director of the Center for Women's Business Research and currently adjunct professor at the University of Maryland University College.
1. IT STARTS WITH THE GOALS: The value of setting high goals for growth is not just a motivational myth. Research shows that the only statistically significant predictor of business growth is not the industry, size of business or length of time in business. It is the entrepreneur's goal for growth.
That mind-set is only reinforced by the training many women entrepreneurs get—at women's business centers, for instance, or seminars for aspiring women business owners, or at adult-education courses at community colleges. This training targeted directly at women too often tends to ignore planning for future growth, focusing instead on business start-up planning, marketing advice and personal-budget planning to ensure the new entrepreneur has enough cash to carry her until the business gets going.
Once a woman starts a business, that lack of focus on growth planning can make a huge difference. So, if after a few years, the woman wants to expand the business and needs capital to do so, she is unlikely to have the financial records and projections that a bank requires. In the end, she either delays growth or, more commonly, lowers her goals.
2. ACCESS TO CAPITAL: Women often come to entrepreneurship with fewer resources available to them than men. The result is that they are more likely to go into industries such as retail or personal services where the cost of entry is low—but so is the growth potential.
Why the lack of resources? Again, women must accept part of the responsibility. Research shows that women tend to view debt as a "bad thing" to be avoided. For expansion capital, most turn to business earnings, which usually limits growth potential.
3. ACCESS TO NETWORKS: Networks are a vital source of business and industry knowledge, leads on contracts, and access to decision makers in finance, purchasing and the community. Most women don't have the connections for credible introductions into industry associations, chambers of commerce, venture-capital groups and other key networks. When women venture into diverse networks, they too often are not taken seriously and frequently are shut out of conversations and deals.
Sources: The Wall Street Journal, May 17, 2010 and Bloomberg Businessweek, June 28, 2010
What Needs to Be Done?
1. CHANGE THE MIND-SET: The most successful women business owners "think big" from the start. On average, women-owned business are still small compared with businesses owned by men. As of 2008—the latest year for which numbers are available—the average revenues of majority women-owned businesses were still only 27% of the average of majority men-owned businesses.
Training and personal business coaching for women entrepreneurs must stress the importance of laying the foundation for business growth from day one, regardless of the business owner's current plans for growth. Learning to expand a business isn't only about being inspired, but also about learning the all-important how-to's by working with your experienced personal coach. It's about teaching women what works and what doesn't work.
For example, The Wall Street Journal and the Lansing State Journal reported that women are at a disadvantage when they communicate "like a woman" in a male-shaped corporate culture, and 81 percent of women are now "adopting a style with which male managers are comfortable."
Sound like some ridiculous regression of feminism, catering to male-chauvinism? Not to John Agno, a recovering management consultant and Ann Arbor,MI-based executive coach. To him, acting more "like a man" is savvy business sensibility.
Talking like a man matters
"A woman needs a male coach," says Agno. "Otherwise she won't have a good idea about how the other gender thinks and feels. It's still a man's world in business. Women need to learn how to talk like a man. They need to learn how to brag. They'll get what they want out of the situation by molding to the environment."
Women have, characteristically, been conditioned to speak a certain way, according to Agno. "They tend to end sentences on a high note, which implies, 'We really want to talk this over,' instead of a low note, which is more of a command."
Along with shaky vocal inflections, Agno says women aren't specific enough about their contributions to the company. They use too many words, downplaying their abilities. In the male mind, this behavior creates doubt.
Communication styles rooted in childhood training or unconscious beliefs can be tough to change. A first step is becoming aware of how you talk at work. Here are some pitfalls that women especially can encounter in the workplace:
--using too many words to deliver serious messages
--downplaying your contributions
--using vague language
--phrasing statements as questions
--using an upward inflection at the end of statements, which indicates doubt.
Working with a personal coach can help women entrepreneurs to be clear on the communication style and confidently practice this style so you will be heard by bankers, clients and prospective customers.
2. NETWORK, NETWORK, NETWORK: Women business owners must expand their networking beyond community and women's entrepreneurship networks. The most successful women business owners join multiple, diverse networks to learn from their industry contacts, meet customers and develop connections to expertise.
Women leaders should reach out to other women and bring them into social networks; like www.womanleadership.com where women around the world mentor other women in effective leadership skills.
3. Here are some of links for self-coaching on women and leadership issues:
SoBabyBoomer.com - Life Coaching Tips for Women
WomenExecutives.info - Personal Executive Coaching Experiences
CEOleadershipcoaching.com - Leadership Onboarding Coaching & What makes a good executive and business coach.
CoachedtoSuccess.com - Why does a CEO need a coach?
Leadership401.com - Typical personal and corporate coaching plans and costs
GlassCeilingTips.com - Articles about breaking through the glass ceiling
The-Leadership-Blog.com - A series of leadership tip postings, including this one, for women executives