Women entrepreneurs are making their mark in launching successful ventures — and recent statistics show that 46 percent of the privately held firms in the U.S. are now at least half-owned by women.
Despite robust growth in the initial stages, these companies have difficulty scaling up to the potential they could achieve. Businesses owned by men are 3 ½ times as likely to reach annual revenue of $1 million compared to those owned by women — and that experience drew concern from EY, a world leader in advising, guiding and recognizing entrepreneurs. Taking its study into the reasons behind the discrepancy, EY in 2008 launched an annual competition and leadership development program called the EY Entrepreneurial Winning Women Program.
The results have been impressive. Forty-nine percent of the entrepreneurs who have participated experienced revenue growth and 26 percent have experienced job growth.
By giving women entrepreneurs access to networks of highly successful entrepreneurs, senior executives and investors, the EWW program provides a leg up for them, says Beth Brooke-Marciniak, EY Global Vice Chair, Public Policy.
One of the key factors the program addresses is referred to the “missing middle,” the position able business leaders find themselves in after building profitable small companies but who often cannot readily find the tools needed to continue to scale.
To that end, the EWW program highlights five critical ways to scale small companies into large ones:
Think big and be bold.
The program helps women understand that the qualities that have brought them to where they are — a desire to innovate, a willingness to take calculated risks, a knack for turning adversity into opportunity and an ability to see possibilities others do not — are the same qualities that build market-leading companies.
Ninety-two percent of women entrepreneurs in the program said it had a positive impact on their desire to grow the business. On the issues of confidence that they could grow the business, 88 percent found a positive impact.
Build a public profile.
The importance of a public profile cannot be dismissed. Women entrepreneurs need to project themselves publicly because the outside world wants to learn about them, says Rob Scott, EWW program judge. Through the EWW program, ambitious and creative women entrepreneurs receive positive press, which helps win the attention of potential customers.
Eighty-eight percent of entrepreneurs found that the program gave them more confidence in working with the press and 65 percent felt the program had a positive effect on the media visibility of their business.
Work on the business, rather than in it.
Observers of women entrepreneurs say women may focus internally so much on their businesses that it can make it hard to look outward, to stay open to new possibilities and to share the responsibility for growth with others.
Seventy-one percent said the EWW program helped them make changes in their leadership role, while 76 percent said the program has helped them build a strong complementary team to help grow the business.
Establish key advisory networks.
To operate a successful business, there have to be connections with proper networks to yield both new opportunities and a new way of thinking. The EWW program offers events at which entrepreneurs can meet potential advisers, partners, suppliers and investors for their businesses, and it also offers access to a personal virtual network, including a liaison at the local EY office.
Eight-three percent of entrepreneurs agree that the program helped as a network in itself, 79 percent were able to expand their professional network, and 70 percent said the program gave them a strong support group with fellow award winners.
Evaluate financing for financing.
Studies have found that women are less likely to use outside financing than men. To help overcome the mindset to control all the equity in the company, the EWW program educates women entrepreneurs about potential sources of funding. Participants learn about the benefits and drawbacks of various ways of financing growth.
Eighty-three percent of women entrepreneurs said the program helped them better understand entrepreneurial growth strategies and 58 percent said they were able to better understand the sources of growth capital.
The program’s impact on women entrepreneurs supports the conclusion that influential people have the power to help women entrepreneurs accelerate their companies’ growth. With the right information, networks and guidance, promising second-stage women entrepreneurs can think big and scale up.