Monday, August 09, 2010
The Measure of a WOB
At our 2010 Leadership Luncheon, Roxanne Quimby held up this WSJ article, and asked us women to think/dream/lead bigger when it came to our businesses. As the article underscores, the primary reason women owned businesses are smaller than their male counterparts, is because women entrepreneurs set smaller goals than there male counterparts. “Women start businesses to be personally challenged and to integrate work and family, and they want to stay at a size where they personally can oversee all aspects of the business.”
How does that make you feel?
Ever since I learned that women owned businesses (WOBs) are the fastest growing segment of the national economy, I’ve been fascinated. Women are twice as likely as their male counterparts to start a business, and their growth rates of employment and revenue have continued to outpace the economy (not a true measure these days…) The rub is here:
1. Average revenue from a WOB is 27% of its male dominated counterpart; and
2. Less than 1% of WOBs, only 200,000 nationally, net more than $1 million in revenues.
In short, WOBs aren’t big and individually, they aren’t growing. (This is, of course, a generalization. Some WOBs do grow. Some net more than $1 million. But the vast majority don’t).
To some extent, this doesn’t matter and I shouldn’t care. After all, a WOB is the sole property and priority of its owner, and the owner may have no interest in growth. That said, I do believe in #gobigorgohome, so when I first came to the Fund, I (together with the Maine Center for Creativity and Maine & Co) conducted a series of focus groups, asking WOBs what it would take to grow and scale their businesses. Every discussion started on a similar note, the audience pointing out that our assumptions were wrong. “You assume,” they told us, “that we want to grow our businesses.” Their rationales for starting businesses ranged from better flexibility to losing a job, and had nothing to do with going big.
Those who did express interest in growing their businesses cited lack of capital—financial, human, and intellectual. In response, we retooled our program for women entrepreneurs—Women Standing Together—creating an executive round table think tank for entrepreneurs facing the next stage of their growth. We paired entrepreneurs with mentors who help assess the opportunity/challenge of getting to the next stage; after the entrepreneur’s presentation, our network of creative, market savvy business women generate solutions; the mentor and entrepreneur work together over 2 months to distill the strategies and execute those with merit.
As the program enters its second year, its leadership team is noodling on its impact. It is certainly fun, but are we helping the entrepreneur in her growth? And if so, what does growth look like? The ideation process, connections with the network, and mentoring fuel the entrepreneur, that is for certain, giving her momentum. But that momentum can’t be sustained without a real qualifying event (capital raise, new markets, new product launches, media attention, credibility). So as we think about helping women set big goals for growth, what does growth look like? Is it aiming for a qualifying event? Is it the national measure of netting more than $1 million in revenue? Is it growing revenue parity with their male counterparts?
What would growth, and a targeted intervention, look like to you?
