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Beyond the Bucks

Growth strategies of successful women entrepreneurs

3 businesswomen having a conversation

Study Overview

More women are starting businesses today than ever. In fact, the number of women-owned businesses grew 58% between 2007 and 2018 — nearly five times faster than the national average — and the trend continues. Additionally, in 2018 the women-owned businesses that had more than $1 million in revenue increased revenues 46% over the past 11 years in comparison to 12% growth for all U.S. businesses. While these firms comprise only 1.7% of all women-owned businesses, they now account for 68% of total employment and 69% of revenue generated by all women-owned businesses.1 These growth rates are reasons to celebrate the many new women- led businesses that exist today. However, this growth has come with struggles. Women entrepreneurs have encountered barriers not typically faced by male counterparts and, therefore, overall revenue and employment results produced by women entrepreneurs are lower. 2 The good news is these barriers haven’t stopped these women. Instead, they have developed strategies to grow their businesses and succeed.

Bank of America partnered with Babson College to conduct research to determine how women entrepreneurs are succeeding resulting in the Beyond the Bucks: Growth strategies of successful women entrepreneurs white paper. The report summarizes insights gathered through in-depth, one-on-one interviews with 30 women business owners, all of whom operate companies generating more than $5 million in annual revenues.

The women who participated in the Beyond the Bucks study run businesses that generate an average of $43 million in annual revenues, represent a wide range of industries and are located across the U.S. The interview transcripts were aggregated to identify common themes regarding challenges that the women entrepreneurs faced, as well as the strategies they deployed to significantly grow their businesses.

Three barriers

Over the course of the research, three major themes emerged, highlighting the barriers women often encountered in their endeavors to grow their businesses:

  1. Market misperceptions
    Women entrepreneurs have often had their leadership position questioned due to their gender, and also find that their businesses are subject to additional scrutiny due to gendered assumptions about the markets they are serving.
  2. Network exclusion
    As business success has typically been based on “who you know” and not “what you know,” women entrepreneurs often experience limited, gender-based access to networks and strategic relationships.
  3. Managing expansion with underfunding
    Women entrepreneurs are aware of the barriers they face to obtaining startup and growth capital. The lack of capital also creates new, ongoing challenges. They must plan for, and incorporate, organic growth, which is typically a slower process and more difficult to manage. This lack of capital can also impact recruitment and retention of talented employees, a critical step for growing any business.

Actionable strategies for women entrepreneurs

The women entrepreneurs who participated in the research for the Beyond the Bucks paper have developed successful, often novel, pathways to move forward despite the challenges they faced. The goal of the paper is not only to present their barriers, but importantly to share their strategies and insights. The variety of actionable growth strategies assembled from the interviews with the successful women entrepreneurs are presented below to help others manage setbacks, grow their businesses and inspire the next generation of entrepreneurs.

  1. Explore various capital alternatives
    While there is significant media coverage on venture capital (VC) funding and the subsequent “unicorns” it may produce, VC funding remains a “black swan” event, in particular for women entrepreneurs. The percentage of women entrepreneurs who receive VC funding has consistently remained in the low single digits, less than 3%.1, 2 VC and private equity are the most expensive forms of growth capital, where the entrepreneur has to give up ownership and often control of their business. While VC gets a lot of media attention, there are other forms of capital available for funding business growth, specifically forms of debt that women may want to consider. These options enable women entrepreneurs to fuel growth while maintaining equity ownership of their business.
  2. Build for the long term
    In addition to requiring entrepreneurs to give up equity ownership, taking capital from investors can lead to rapid growth and, possibly, to operational challenges. The women profiled had an attitude that building a business was “a marathon, not a sprint,” and by avoiding formal investors, they also averted their expectations for rapid, possibly unrealistic, growth. Notably, this allowed their businesses to grow more organically and, therefore, more sustainably.
  3. Develop a sustainable and talented workforce
    Many of the interviewed women felt it was integral to their business success to invest in people and the company’s culture. While in the short term, it can create a strain on profitability, in the long term it can build a strong workforce that may generate multiple returns.
  4. Buy from and fund women-owned businesses
    Help women entrepreneurs scale more quickly by intentionally buying from women-owned businesses. This is something that everyone, men as well as women, can do to be part of the solution. When evaluating new investment opportunities, take a closer look at the success of women-owned businesses with the consideration of supporting their vision with capital.
  5. Be a mentor, seek a mentor
    Mentoring can take many forms, from informal coffee meetings to the simple act of taking a woman entrepreneur to a business meeting with you. Industry events can be meaningful ways to showcase successful women entrepreneurs by offering them keynote speaking opportunities and participation on panels.
  6. Join or create new networks
    In traditionally male-dominated industries, there remains a real need for organizations that connect and promote women-owned businesses. Network-minded women, in addition to pursuing broader networks with both men and women, can bring together other women from their own industries or, as a way to leverage new opportunities, from diverse industries.
  7. Capitalize on personal insights and experiences
    The female demographic presents enormous potential for business growth as women have significant purchasing power. Women entrepreneurs have an opportunity to leverage their personal experiences and serve the emerging needs and trends for female consumers. Because they understand the market, they are well suited to communicate their value proposition and reach their target clients. By capitalizing on their personal insights, women entrepreneurs can also form strong partnerships (formal and informal) with other women entrepreneurs in similar women-focused ventures for cross-market opportunities.

Beyond the Bucks: Moving forward

Today, women are starting and growing their own businesses at record rates; they own an estimated 12.3 million businesses, employ over 9 million people and generate more than $1.8 trillion in annual revenues.3 As a community, we can all do our part. We can support women entrepreneurs and accelerate their business growth by:

  • Buying from women-owned businesses
  • Funding women entrepreneurs
  • Including women in our networks
  • Introducing women to our contacts
  • Mentoring the rising generation of women entrepreneurs

We hope the white paper provides women entrepreneurship advocates with a shared understanding of how women are able to successfully grow their businesses as well as areas where they are still challenged. Our goal is to help other women entrepreneurs identify opportunities for similar accelerated growth as we encourage the creation of robust, industry-leading, women-owned businesses.

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