By: Sylvia Browder
on Wednesday, June 26, 2013
It’s a great time to be a woman in business. In fact, women have been starting businesses at 1.5 times the national rate and now account for 29 percent of all companies in the U.S. Though the latest statistics show that women in business are thriving, they still face many obstacles. Other reports show that they lag behind their male owned counterparts in relations to annual gross receipts.
Many reasons can contribute to these statistics such as a poorly written or worse… no marketing plan or lack of access to capital. In addition, statistics show that women owned firms are clustered in industries that have lower levels of revenue on average, which limits the economic impact these businesses owners can make.
The good news is that in spite of these odds; there are many successful women-run businesses. So, what can women do to strengthen their business model? What are the pitfalls to avoid? Here are the top 4 reasons why women owned businesses struggle to grow… and the solutions!
1. Lack of Mentors at High Growth Level
This is a major reason for the lack of growth in many women owned firms. Many lose out on quality mentoring. Seeking role models can be a challenge. Choosing a mentor is one of the most important decisions you can make as a professional.
Find a mentor whose work you admire, possesses strong leadership abilities, can be an inspiration to you and others and offers solutions when you are faced with obstacles and invaluable insight. Here are 4 ways to find a mentor:
2. Unwillingness to Seek Help
- Make a list of successful people you admire and invite them to coffee or lunch.
- Attend local business or civic events such as luncheons, seminars or conferences.
- Join your local chamber of commerce and attend networking events or meetings.
- Contact your local SCORE office for an appointment.
Most women are reluctant to seek help personally and professionally as their business grow and thus, struggle to find a healthy work and life balance. Often, they prefer to run their business and life on their own terms. Unfortunately, this can be a detriment!
Why are so many of women reluctant to ask for help from friends, family, spouses or colleagues? Fear is a major factor… that is, fear of losing control, fear of exposing vulnerabilities, fear of… and the list goes on and on!Solution:
As your business grows, so should your ‘tight grip’ on controlling every aspect of it. The worst thing that you can do is become a slave to your business. It is important that you delegate non-core business tasks to your staff
or consider outsourcing. Play on the strengths of others. The lack of delegation will stifle your growth, or worse, cause you to run your business and yourself into a pitfall.
3. Lack of Knowledge about Finances
As a business grows so does your financial responsibilities! Unfortunately, statistics show that lack of knowledge and confidence in understanding finances is prevalent among women owned firms. This can cause major problems in making sound financial decisions.
Designing a budget is paramount. For instance, a personal budget is extremely important in managing your household while your business budget allows you to maintain a positive cash flow, pay your overhead and show profit. Also, investing wisely is the key to long term success. There are many options available, so speaking with a financial advisor could prove invaluable. Establish a relationship with a banker. This is extremely important because without a solid banking rapport, it might be difficult to establish a line of credit or borrow a significant amount. In addition, it is important to establish a savings plan.
Do you set money aside for an emergency? Are you ‘Paying Yourself
’ first? With the economy being so weak, sometimes it takes every penny that comes in to make ends meet. You must get out of that mind set and start saving on a regular basis. Start small and increase as time goes on.
4. No Marketing Plan
"Good plans shape good decisions. That's why good planning helps to make elusive dreams come true."
~Lester R. Bittel
Recent reports indicate that most small businesses, who are barely surviving the market, have a weak or no marketing plan. Why marketing plan? Well, it is a road map that details a route you should take to successfully promote and expand your business. It is critical to the success of a business. If a small business wants to achieve its potential, a marketing plan must be implemented!
A marketing plan is an integral and valuable tool for determining success of your business and the overall direction that your product or service should be taking. It should:
- Clarify the impact and results of past marketing decisions.
- Elucidate the external market that a company is competing.
- Include deadlines for meeting those targets.
- Prepare a budget for all marketing activities.
- Set objectives and provide a path for future marketing efforts.
- Require accountability and measures for all activities.
As you can see, there are many reasons for stagnation in growth as well as solutions to avoid them. By doing so, you will be able to run your successful woman-owned business like a true CEO.
What has been your top struggle as a business owner and how did you resolve it?