In the U.S., women start businesses at 1.5 times the rate of men and are at least half owners in 46 percent of all privately held firms.
Yet only 2 percent of women-owned businesses in the U.S. break $1 million in revenue. Contrast that with businesses owned by men, which are 3.5 times more likely to reach $1 million in sales. These dynamics are concerning for many reasons.
First, because research detailed in EY’s recent report, “Women. Fast forward – The time for gender parity is now,” shows that female leadership helps companies achieve better financial performance. Second, companies with women leaders also perform better in nonfinancial measures, including corporate governance, innovation, retention and corporate social responsibility. There’s no denying that the majority of women-led companies have yet to reach their full potential as an economic powerhouse, and this has significant economic implications.
Given our understanding of these dynamics, combined with our desire to help accelerate the growth of high-potential female business owners, we launched the EY Entrepreneurial Winning Women™ program, an ongoing leadership development program that identifies women entrepreneurs whose businesses show true scale potential, and then equips them to achieve it.
Each year in North America, the program accepts up to 12 entrepreneurs from the U.S. and Canada and provides year-round activities designed to strengthen their executive leadership and business skills; help them identify opportunities to grow through meetings with senior advisers and seasoned entrepreneurs; and increase their visibility and profile among corporate executives, investors and the media.
Growth targets on the rise
As a group, 70 percent of the participants have significantly increased their growth targets after joining the program and understanding how to pull key business levers. Measured as a group, this translated into revenues that were 63 percent higher than their total revenues prior to joining the program. We’ve also witnessed three key contributors to growth essential to women entrepreneurs: community, purpose and evolving leadership skills.
Being a part of this community of like-minded entrepreneurs also provides critical advantages. I don’t know any successful leader who doesn’t have a strong sounding board — a peer group — that can be tapped for advice and moral support. It’s not only confidence-building to have a robust network of people to rely on for advice and counsel, but it’s also smart business for entrepreneurs to share insights, shorten their learning curve and expand their perspectives by connecting with smart people inside and outside their industry, market and geography.
Creating a sense of purpose
Another factor affecting a woman entrepreneur’s ability to reach her potential is having a strong and crystal-clear purpose, one that will enable her to scale her business without losing sight of the values and the culture that made it successful in the first place. Research shows that organizations that embody their purpose every day outperform organizations without one. Why? Because operating with a sense of purpose enables an organization’s employees to share the same rallying cry and provides clarity about how they contribute to the organization.
Women entrepreneurs have a tendency to underestimate their potential, so we’re proud to give them the boost they need to scale their businesses more quickly. ●
Kim Simios is the managing partner of the Chicago office for EY.