The organizer of a networking group for female entrepreneurs spouts a lot of statistics about how women are starting businesses at twice the rate of men, and that nationwide, women own more than 10.6 million businesses.
While on the surface her statistics appear to reflect a progression of women's economic power in this country, the reality is not so bright — most women in her group are attempting to turn non-profitable hobbies into businesses on their own dime and their own time, and most end up shelving the business in search of a regular paycheck. Essentially, leaving many women entrepreneurs stuck in a pink ghetto.
According to the U.S. Chamber of Commerce, almost 50% of all women-owned businesses generate less than $10,000 in revenue (not even profit) annually. This is not nearly enough money for a business to sustain itself, let alone the owner.
In addition, according to the SBA, women business owners are more likely to use personal credit cards to start or grow their businesses, thereby damaging their personal financial situation. Further, over half of all women-owned businesses are concentrated in the service sector, a sector that is traditionally difficult to scale.
Here are five quick tips women can do to beat the statistics:
- Think about starting a scalable business. When a business model has the potential to generate growth in revenues significantly faster than its cost base, the business model is scalable.
- Think leverage and think bigger.
- Focus on scaling the business, growing revenues, hiring employees. Be sure your the most important jobs you fill first are those that have the potential to efect revenue.
- Use someone else's money to do it — use small business grants, loans or angel investments.
- Look beyond exchanging time for money and consider building something.
Granted, we should celebrate the fact that women are building businesses to generate their own income. However, until women entrepreneurs learn to incorporate growth strategies, financing and new industries into their plans, they will continue to be stuck in their own pink ghetto of small, service-oriented, hobby-like businesses.
Ann Tardy is founder and chief catalyst at LifeMoxie. Check out her site at: lifemoxie.com.
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