Make Way for Female Entrepreneurs

Banker Maria Coyne says women-run companies are growing fast -- and making headway in traditionally male sectors

Women-owned businesses grew by 28% between 1997 and 2004, according to the Center for Women's Business Research. That's three times the growth rate for U.S. businesses overall. Women are increasingly taking over family companies, adopting new technologies, and embracing leadership in male-dominated fields, says Maria C. Coyne, who leads the community banking and women's business initiatives at KeyBank National Assn., based in Cleveland.

She spoke recently to Smart Answers columnist Karen E. Klein about the state of women's business and why obstacles still exist. Edited excerpts of their conversation follow.

More young women are starting their own businesses, often straight out of college. Why is that?

Young adults starting businesses out of school is a trend we've seen throughout the country since the late '90s, during the Internet boom. There are more than 1,600 colleges and universities now that provide a curriculum in entrepreneurship, and in many cases the enrollment is more female than male. Universities also have incubator programs that help commercialize the ideas that grow out of their graduate and undergraduate schools.

Is starting a company straight out of school a good idea?

There are pros and cons. If I put on my lender's hat, we do put a lot of emphasis on loaning to people who get management experience before they try to start their own company.

But I think that young women today have a lot of confidence when they look out into the marketplace and see a lot of role models. A woman business owner is not the anomaly she might have been 20 or 25 years ago.

Women are opening businesses in record numbers and with increasing success. Are there still impediments to their growth?

Yes. I'd say the biggest one is the lack of access to information about how to get capital. There's not a good understanding about how to go about accessing it.


They do a wonderful job of networking with other women and mentoring other women, but they are not in the same networking circles as male business owners. They're typically not out on the golf course with their accountants and lawyers, so they're not hearing about opportunities to raise capital.

Also, many women manage their businesses the same way they have been taught to manage their households: frugally. They're really good at bootstrapping, so many women-owned businesses have grown to significant size without credit.

They finance growth through retained earnings or cash flow, rather than loans. That's not a bad thing, but often they could augment those practices with a line of credit or an equipment loan that would help them grow larger and faster. Women shouldn't view borrowing as a failure; that's nonsense. They need to learn that there's no need to be a martyr.

Women still are underrepresented in the top levels of corporate management. Is this one reason more women are opening their own companies, where they know they won't hit a glass ceiling?

I think that the element of self-control and self-worth involved in entrepreneurship is still a big motivator for women. They want to have that financial self-sufficiency.

But there has also been a big debate about why the majority of women-owned companies stay small. I find that female-owned companies fall into three camps. First, the lifestyle businesses that consciously stay small and are perfectly happy with that. Then there's the group that wants to grow large and will do whatever they can to achieve that. Then there's a middle group that would like to grow their businesses but don't know how and are afraid to ask for help.

What we're trying to do is to reach out to that middle camp and teach them to ask for help, get more education, establish formal or informal boards of advisers, do more networking, and establish regular relationships with bankers, lawyers, and accountants who can advise them.

What kinds of businesses are women starting?

Vast numbers of women-owned businesses continue to be in the services and retail sector. However, some of the fastest-growing are in industries considered nontraditional for women: Construction, agriculture, manufacturing, wholesale -- these have all been pretty male-dominated in the past.

Studies have shown that women sometimes have trouble establishing credibility in these industries, but once they do that, they're just fine. That has certainly been true of women I've worked with who tell me that the hardest part of the job is just getting on the bid list.

More family businesses are being handed down from father to daughter. Does that have anything to do with the increase of women in nontraditional companies?

I think the trends are definitely tied together. The first wave of retiring baby boomers is recognizing that their daughters are better educated then ever before and better able to come into the company and handle a leadership position.

We're also seeing mother-daughter handoffs, or groups of sisters taking over a family company, where in the past it might automatically have gone to a son or son-in-law. Now there's some level-setting and a recognition that a son isn't always the best person.

You've noticed that women entrepreneurs take a more proactive approach than do males when it comes to adopting new technology to expand their businesses. Was that surprising?

I think it was counterintuitive because we typically think of technology geeks as male. But a study we did about a year ago showed that women-owned companies that had surpassed $1 million in annual revenue were more likely than their male-owned peers to have Web sites with transaction capability and more likely to have used advanced technology to run their businesses more efficiently.

I notice that women entrepreneurs have been earlier and deeper adopters of things like accounting software and technology tools used to sell, market, and run their finances.

What's the most exciting thing you see, working with women in business?

What's really fun is that there's a fearlessness about many women business owners. They recognize the challenges of rising energy costs and health-care costs and they know that it's tough to find employees.

Yet better than half of the ones I work with are projecting growth this year, and close to half are planning on investing in their businesses. Even in the face of the challenges, they're determined to continue to grow their companies.

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