Better Backup For Women In Business

The problems of female entrepreneurs are about to get new visibility in Washington. President Clinton guaranteed it when he put the chair of his National Economic Council, Laura D'Andrea Tyson, in charge of a new committee addressing issues crucial to women business owners. The Interagency Committee on Women's Business Enterprise will release its first report in December. Tyson discussed the panel's work with Assistant Managing Editor Sarah Bartlett and Washington Correspondent Mike McNamee.

Q: What have you learned about women-owned businesses through your work with this committee?

A: The President likes to point out that we've had a record number of small-business creations in the past two years. Women-owned businesses are becoming more important, in terms of numbers, employment, and sales. And in recent years, they've increased fastest in nontraditional areas, such as construction, manufacturing, and transportation.

From the conversations I've had, I've been struck by the fact that businesses owned by women tend to be more sensitive to issues such as flexible time, job sharing, and reimbursing their workers for training. Studies have found women-owned businesses to be more worker-friendly in those ways.

Q: What are you trying to accomplish with the Interagency Committee and its private-sector partner, the National Women's Business Council?

A: We're trying to ask what public policy could do in four basic areas: access to capital, access to technical assistance and training, and ways to expand opportunities for women-owned businesses to compete for federal contracts. And we think it's important to encourage research and data on these businesses.

The private-sector group--they're there to help us understand the barriers that are holding back women entrepreneurs. Then maybe the public sector can do something. Maybe the private sector can do something as well.

Q: So what is the federal government doing to help women-owned businesses?

A: I had never thought of starting a small business, so I hadn't realized the very large fraction of women who use their own personal finances to start a business. There are similar pressures for men, too, but the problems seem compounded for women. So 42% of women who own small businesses have used personal credit cards for short-term financing; 30% finance their businesses out of their own savings.

In the past three years, the [Small Business Administration] has guaranteed $3.5 billion in loans to women. Women's share of SBA-guaranteed loans rose from 11% in [fiscal] 1993 to 19% in 1995. We've combined that with a prequalification program for women. The SBA works with the business owner to help her ascertain whether she qualifies for a guaranteed loan before she goes to the bank.

Then there's the micro-loan program--it's assistance for would-be entrepreneurs, both men and women. About 43% of its loans have gone to women.

We're working hard to improve and extend the SBA Women's Demonstration Project. This is really counseling and training--the things you need to do to put together a business plan, to put together a financial package, to evaluate and develop a market. When I heard about it, I thought of calling my friends who have talked for years about needing something like this.

The SBA also has the Women's Network for Entrepreneurial Training, linking up successful women entrepreneurs with aspiring women entrepreneurs. It's a very useful way to get information spread because the successful ones have done it before.

Q: In 1994, Congress set a goal of placing 5% of federal procurement with women-owned businesses. Is that being met?

A: The goal is just taking effect, but several agencies are moving to meet it. In 1994, women-owned companies got 2.8% of the federal-procurement dollar--a 27% increase from 1992.

Sheila Widnall, the Air Force Secretary, has a tremendous outreach program. She has amazing stories about women in traditional businesses who have converted to military procurement. The Air Force would say they recognize the increase in women-owned businesses. They want to find the best contractors, so they have to extend beyond their normal channels.

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