What Difference Do Women Entrepreneurs Make Anyway?
6.19.2013 Entrepreneur blogger Moira Vetter, author of AdVenture, shares the statistics about characteristics women have that vastly improve business results.
Quite a bit it turns out. Women have characteristics that vastly improve business results, which is why so many major corporations are instituting women’s leadership development initiatives. Case in point: companies with women directors see higher return on sales (84%), higher return on investment (60%) and higher return on equity (46%) than those without women directors.
And what happens when these women are at the helm of the business, properly armed with the self-confidence, interest in scaling and the capital needed to grow their enterprise. The 2012 Global Entrepreneurship Monitor (GEM) study says it could deliver 6 Million more jobs in 5 years. Yeah, we could use those.
Unfortunately, the same GEM study showed that while 2012 U.S. entrepreneurship was at an all time high, women are not scaling businesses as fast as men. Forbes notes that women own 30% of all businesses but 84% have NO employees besides themselves. Women have turned the “one woman show” into an art form…to everyone’s detriment.
And let’s talk about money. Women access just 5% of the available equity capital each year. That’s a key figure when you consider women discontinue businesses twice as often as men—most often due to lack of funding. It begs the question, is that because the money isn’t available to us or because we don’t ask for it?
In my recent book AdVenture, An Outsider’s Inside View of Getting An Entrepreneur to Market, I look at seven of the most time-tested entrepreneurial traits: Vision, Passion, Speed, Risk, Reward, Results and Growth. Two of these are especially strong in women: Passion and Results. But statistics point to two other underdeveloped traits in women entrepreneurs: Growth and Reward. The ability to harness and hone these traits spells success or failure.
Strength #1: PASSION. Entrepreneurs have palpable, unstoppable passion—and women entrepreneurs have it in spades. It’s what drives them past the point where others stop, and is key to not just starting but scaling a business, which is a challenge for women. Women have a natural instinct to listen and understand each individual’s passion. By harnessing this instinct, women can create greater momentum, more buy-in and spur a larger team to follow them.
Strength #2: RESULTS. Attaining business results (like growth or next-round funding) is achieved by being observant and asking questions—where are we going, how are we doing and how will we get there? Women ask questions. And women are masters at marshalling resources, getting information and creating plans that achieve results.
Development Area #1: GROWTH. Women seem comfortable looking at personal and professional growth, but are apparently less practiced at organizational growth. I am not suggesting they don’t have the proficiency for growth…but if only 16% of women-owned businesses have employees, then they are not focusing on scale. Sure it is possible to grow revenue, increase profit and create a business that fits a specific lifestyle without scaling. But consider how much more enrichment, how many more jobs, how much more influence and how much more net worth women could personally claim if scale were the goal.
Development Area #2: REWARD. Reward is something far beyond money. If you want money, more power to you. But viewed as an entrepreneur, money—more than a reward—is a means to an end. It absolutely takes money to make money. Capital, yours or others’, enables growth on a broader scale. Successful entrepreneurs—whatever their gender—need capital, use capital, ask for capital and proudly earn the rewards they deserve for their work and the risks they take.
The next time you do a little entrepreneurial self-reflection, consider what you have to offer. Are you a visionary trapped doing the work of a technician? Have you considered a way to exponentially scale your passion? Could you refocus your grasp of results and success metrics to attract a game-changing investor? Are you willing to ask not only for what you’re worth—but for more than you are worth? You should. Successful entrepreneurs do it every day.