Giving Women a Helping Hand

Female entrepreneurs are making tremendous strides, in part because so much help and advice is available for the asking

By Karen E. Klein

Q: I am considering starting my own retail furniture business, selling mainly unfinished wood furniture in country styles. As a woman, what things should I take advantage of when starting a new business? Are there special grants, loans, or incentives I should know about? -- M.H., Gladwin, Mich.


Women are launching businesses in record numbers. The number of women-owned businesses in the U.S. is expected to reach 6.2 millionby yearend, and those outfits' sales are predicted to surpass $1 trillion thanks to a growth rates that continue to exceed national business averages. Women-owned businesses have increased nearly tenfold in the past 25 years -- and their numbers continue to grow at twice the pace of overall business starts. They employ a third again more people than the Fortune 500 and boast better loan-repayment records. If anecdotal evidence is any indication, they also treat their employees better.

While the largest share of women-owned businesses remains in the service sector (including business services, engineering services, and professionals such as lawyers, doctors, and accountants), female entrepreneurs are also moving into nontraditional industries, like manufacturing. The greatest growth in the number of women-owned firms is seen in construction, agricultural services, transportation, communications and public utilities, finance, insurance, and real estate.


  So, the good news is that you're in good company. The bad news is that, while women are closing the gap in obtaining loans, they are barely on the same playing field as men in terms of securing equity capital. "Their businesses are smaller on average, and women CEOs take home three quarters as much as their male counterparts," says Phil Borden, a small-business development counselor at Women's Enterprise Development Corp., a nonprofit training agency based in Long Beach, Calif.

"The most recent study of minority women business owners in the Los Angeles area showed that the best opportunities for personal growth are in manufacturing, but that women have consistently set their sights too low in marketing," Borden says. "For example, they tend to be timid in price-setting, or in selling low-end goods and services when they might sell more expensive ones." The same study shows that women do not network nearly as well as men, adds Borden, a deficiency that hurts their businesses.


  There are, however, many benefits to being a female entrepreneur. If you get certified as such, you can receive preferential treatment from a number of large prime contractors. You can do that, and find out about other valuable programs, at the Small Business Administration Web site. Look at the HubZone, ProNet, and other programs that might be of benefit. Borden recommends checking out the 8[a] program, which accords special status to women competing for government contracts. For advice within your state, look at the Office of Women's Business Ownership (OWBO) site.

You also may share the all-too-common common misconception that there are loads of grants and loans available to new entrepreneurs. Not true. In fact, 90% of all new businesses start out on the strength of personal savings, credit cards, and gifts or loans from friends and family. "If at all possible, it is always best to try and get started without a loan," says Joanna Brody, of the Los Angeles chapter of National Association of Women Business Owners (NAWBO), a nonprofit dedicated to helping female entrepreneurs, whether they be novices or seasoned veterans. To find a NAWBO chapter near you, check their Web site or call 800 55-NAWBO.

If you absolutely need a financial helping hand to get up and running, the Small Business Administration (SBA) offers guaranteed loans through the Loan Prequalification Program, SBAExpress, the Microloan Program, and others. Click here for more information. While the application process is rigorous, you will be able to invest less of your own money than a bank typically demands, and the loan will be prequalified.


  The SBA's library, is a good place to find advice on almost every aspect of starting a business, from developing a business plan and obtaining financing, to marketing and managing. Check out their online classes and programs, and don't overlook affiliated local resource centers. These include Service Corps of Retired Executives (SCORE), Business Information Centers (BICs), Small Business Development Centers (SBDCs), and Women's Business Centers (WBCs), all of which offer business counseling and assistance.

There is also the Online Women's Business Center, an interactive Web site offering training, mentoring, individual counseling, and topic forums. Information also is available in several languages. You might also want to check out the SBA's Office of Federal Contract Assistance for Women Business Owners, which will provide guidance on the best way to market your products or services to the federal government. The agency also operates a toll-free answer desk that gives callers direct referrals to appropriate sources of information. It operates Monday through Friday and can be contacted at 800-U ASK SBA (800 827-5722).

If you decide to work with the SBA, Brody recommends putting shyness aside when seeking out the right person to assist you, Brody recommends. "Just like working with any business partner or colleague," she says, "you want to find an SBA representative who is excited about your business venture and will be a champion for you."


  Brody also advises that you get involved in the appropriate trade association. "These organizations can cut your startup time significantly by offering resources, mentors, and educational opportunities in your exact arena," she says. "Find out from your peers how they got started -- it could cut down on your learning curve significantly."

For more detailed statistics, advice, and help, go to Center for Women's Business Research Web site. The organization's most recent reports, Women-Owned Businesses in 2002: Trends in the U.S. and the 50 States, Women-Owned Businesses in 2002: Trends in the Top 50 Metropolitan Areas, and Compendium of National Statistics on Women-Owned Businesses, offer a wealth of specific information. If you happen to be a minority woman, you might also check out a report called, Minority Women Enterprises: Going To Scale, which is published by the Community Development Technologies Center.

Have a question about running your business? Ask our small-business experts. Send us an e-mail at, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.

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