Businesses owned by women are smaller than businesses owned by men.
In a comprehensive article for the Wall Street Journal, Sharon G. Hadary examines what's holding back women entrepreneurs such that the latest data (2008) shows "average revenues of majority women-owned businesses were still only 27% of the average of majority men-owned businesses."
Why the difference in revenues? One reason is that women-owned businesses are under-funded. According to the National Women's Business Council (.pdf), all small businesses face challenges finding capital to grow. The amount of capital women business owners receive is less than that of men.
I have applied for angel investor funding, willing to share ownership of an enterprise to raise capital in order to start and grow it. Failing to receive funding, my plan has been to muscle through and invest my company's profits into growth.
That's the very mind set that may keep my company small. Hadary writes, "For expansion capital, most [women] turn to business earnings, which usually limits growth potential."
Hadary writes, "Research shows that women tend to view debt as a 'bad thing'… Research supports the idea that one of women's strengths is relationship building, yet women seldom focus on building relationships with bankers. Lack of relationships with bankers and limited knowledge about financial products and services explain to a great degree why more women don't seek more sophisticated forms of financial products and services."
I was grateful to Kelly Kendrick, Assistant Vice President of First Bank and Trust Company, for answering for Handshake 2.0, "What are three questions companies can ask themselves to decide whether or not a business loan from a bank might be right for them?"
As a woman-owned business that intends to grow, these are questions I will now start asking and answering.
Photo credit: Mary Anne McElmurray