Minting Women Millionairesby
Many entrepreneurs dream about making a million bucks. But in truth, only a small percentage of U.S. firms generate that elusive $1 million in annual revenues, and an even smaller percentage of them are women-owned. A program launched nationally this year wants to change that. The 2006 program "Make Mine a $Million Business," makemineamillion.org, wants to create a national community of one million women dedicated to growing their companies to $1 million by 2010.
Lexi Reese, senior director of advocacy marketing for OPEN from American Express, one of the program's sponsors, spoke recently with Smart Answers columnist Karen E. Klein about the group's ambitious goals. Edited excerpts of their conversation follow:
According to your data, 97% of women entrepreneurs own businesses that generate under $1 million in annual revenues. How were your statistics calculated, and how does that figure compare to revenues for male-owned businesses?
The numbers are for privately held enterprises included in 2002 U.S. Census data. We have a statistician working with us who took the data and analyzed it. What she found is that around 3% of women-owned companies -- that's 242,000 out of a total of 10.6 million women-owned firms -- earn $1 million or more annually. Roughly three times as many male-owned companies -- 818,000 of them -- bring in $1 million or more annually.
Why do women need an outside push to get over that $1 million mark?
It's not so much that they need a push, but that they need help gaining ground. We don't always recognize that it wasn't until 1975 -- well within many of our lifetimes -- that women won the right to have credit cards and open bank accounts in their own names, without a male co-signer. It's only been since then that women have been able to gain economic independence on paper, create credit histories, and so forth. [Congress formally outlawed credit discrimination against women in a 1974 law that went into effect in 1975.]
Your goal is to get one million women-owned companies up to $1 million in annual revenue by 2010. How did the program arrive at that goal?
In the greater scheme of things, $1 million in annual revenue is a fairly low amount. But in reality there are not that many women-owned companies there yet. Or male-owned private companies either, for that matter. So it seemed like a realistic figure, and 2010 seemed like a feasible time frame.
The other impetus was to showcase the huge potential of entrepreneurial companies. If one million women business owners reach that goal, they would add a potential 4 million jobs and $700 billion annually to the U.S. economy. That's four times the number of jobs generated by the biggest employers in the country and three times the amount of the federal government's annual procurement contracts.
The program actually launched as a pilot project in 2005. How did it get started?
Nell Merlino, president of Count-Me-In for Women's Economic Independence, a leading nonprofit provider of online business loans and resources for women, came up with the idea for a competition in early 2005. She recognized that the three things holding back women entrepreneurs were access to money, mentoring, and marketing. We got involved because we felt she had come up with not just another awards program, but an economic-development program as well.
We ran the pilot program in five markets last year, with 23 companies chosen to participate out of 220 applicants. Denise Houseberg, owner of MarketExpo.com based in Frisco, Texas, hit $1 million in revenues last December, we have two others on the verge, and the rest not far behind. Also, a whirlwind of goodwill was generated and other corporate sponsors wanted to get involved.
The other thing was that women who participated found that the mere act of openly declaring their intention to get to the million-dollar mark was powerful. So we put out a national call on our Web site, makemineamillion.org, not just for applicants to the awards program but also for women entrepreneurs willing to make public declarations. We're closing in on 2,000 declarations so far.
What happens to those business owners who make the declaration?
They are registered as part of the program and get frequent tips and input about growing their companies. Also, I should mention that women entrepreneurs whose companies are already making $1 million can sign up to become volunteer mentors. We've had a huge outpouring of volunteers from groups like [the National Association of Women's Business Owners,] NAWBO, and the Women Presidents Organization.
What about this year's competition?
Friday, May 12, is the deadline to apply for our 2006 West Coast awards program. To be considered for the award, businesses must be at least two years old and be positioned to achieve $1 million in revenue within two years. Details and applications are available on the Web site. The competition will be held in San Francisco on June 2 in conjunction with NAWBO's national conference. We've gotten nearly 500 applications already. We'll choose an additional 20 winners at an event in New York on Oct. 24. Applications for that event will be due by Oct. 12.
How are the winners chosen, and what do they get?
We'll have 40 finalists pitch their company's growth plans to a panel of three judges and a room of 300 other business owners, then we'll vote to choose the top 20. The winners get a $10,000 line of credit from OPEN from American Express, a loan of up to $45,000 from Count Me In, marketing support from us and QVC, another of our corporate sponsors, and a dream team of coaches and mentors who are going to be focused on getting them to $1 million as soon as possible.
Winners will be blogging once a month about their experiences and meeting with their coaches monthly. We will meet with them every six months to see how close they're getting to their goals.
What have you found out about the obstacles the 2005 winners have overcome?
By studying what's happening with them and working with them, we can see what it takes to get from micro-business to $1 million business. We've identified five important things these companies need to do: 1) Set a vision for their company's growth. 2) Align their business model to fit that vision. 3) Invest in processes that help make that vision come alive. 4) Be selective about financing, which means they don't just take whatever capital is offered but look for approriate sources of funding. 5) Focus on attracting and retaining high-performing people.
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