Susan Wilson Solovic: Majority of women owned firms in United States are growing at around two times the rate of all businesses. One in 10.4 million US businesses are owned buy women and employ about 12 million people.
RSM McGladrey, a leading professional services firm conducts an annual survey of women owned enterprises to learn more about these firms. And joining us to discuss the 2007 RSM McGladrey survey of women business owners is RSM McGladrey’s Pat Ewert, Director of Business Development.
First of all Pat, why don’t you tell us what the purpose of the 2007 survey was.
Pat Ewert: This year’s survey—the purpose of it was to supply information to other professional services firms, it really want to understand women business owners and how to better serve them. And as well, the Women’s Business Organizations were very interested in getting this information which they can use for benchmarking and really sort of getting a sense of what’s going on in a woman’s business community.
But I think one of our major motivators for doing this is to offer a tool for women entrepreneurs that are just starting their business or maybe women who are thinking about going into business, give them some of the information that might be really helpful to help them grow the kind of businesses they want to grow.
Susan Wilson Solovic: And was that different at all from previous surveys?
Pat Ewert: The mission was similar what we did this year that made it a little bit different is we started trying to understand not just strictly quantitative issues, but also some of the qualitative issues that round women business ownership. What was some of their motivations for starting their businesses, what to do they see as some of the biggest challenges.
Susan Wilson Solovic: Pat, who participated in this year’s survey and what organizations were involved?
Pat Ewert: Yeah, we had some really wonderful participation. The University of Chicago Graduate School of Business was wonderful in helping us crack the questions and doing all of the different statistical work. And then as well, the National Association Women Business Owners both the national, as well as the local chapter in Chicago they were very helpful in getting us active membership, as was the committee of 200 which is of woman’s business ownership group for larger Women’s Business Owner.
Susan Wilson Solovic: Right, that’s absolutely a big group. Now, you mentioned that the survey looks at both qualitative and quantitative issues. What are some of the qualitative issues that are impacting Women Business Owners?
Pat Ewert: Well one of the things we really try to find this year, what was their motivation for starting their business. These are things we haven’t really looked at in the past and we found that work-life balance wasn’t as much as we thought it was going to be was their motivators were things like trying to take an idea and really make it happen. Be your own boss. Be more in-charge of your own time. Those key amount were very high in what the reasons were for women starting their businesses.
Depending on what the age was when the woman started the business we had a few little differences, but generally those were the major things.
Susan Wilson Solovic: Pat, before we stated this interview you and I were talking and you’ve actually had your own business and we were discussing that when you are in your own business there really is no work-life balance.
Pat Ewert: Yes, yes. That’s exactly what we found. You do the best that you can and as businesses grow we found that our Women Business Owners started relying more on stronger management teams, outside advisors—we are very happy to hear of those outside advisors that their accountants are number one which made us very happy. So as the businesses grow, in order to get a little bit more balance so you’re not completely spending 100% of their time, they really do rely more on outside advisors and then a stronger management team.
Susan Wilson Solovic: You got to have those number crunchers. Now Pat, in the survey you found that 68% of the Women Business Owners are trying to balance the work and their family lives, what did you learn about that?
Pat Ewert: Well it really surprises you was that high as 68% because the opinion of women entrepreneurs has always been in the past. In order to be a good entrepreneur you got to give it up. You got to give up having a family, being married and devote everything to the business.
So we were really very pleasantly surprised to hear that 67% to 68% of our women were married and also I think about 58% to 59% had children as well. So it was a higher percentage for female entrepreneurs as a general working population. So that was good to see.
Susan Wilson Solovic: That is very interesting. Now the survey also found that in the age group of 20 to 29 that these women business owners actually had some of the highest revenue. What do you think their key to success is?
Pat Ewert: I think there could be a couple of things about that. I think, if you start your business in that 20 to 29, you are very intentional. You come out of school or you start your business career thinking “I am going to be an entrepreneur.” And when you do that you probably educate yourself better, you talk to other women business owners or business owners to understand what some of the tools are that you need to develop in order to run a successful business.
So I think the intentionality of it is really what it’s more about.
Susan Wilson Solovic: Did you find in your survey that women entrepreneurs are willing to take risk and if so, why?
Pat Ewert: Yeah, again, there has always been sort of this idea that women were less interested in taking risk, less willing to take risk. And we found that 95% of our respondents were willing to not only use all of their personal savings, but also put their house on the line which is against what everybody thought. So this was really groundbreaking for us.
Susan Wilson Solovic: Pat, in some of my own independent research I found that sometimes women business owners shy away from using outside capital. Is that what you found, and if so why do you think that’s the case?
Pat Ewert: We did. We were surprised and we’re concerned about that because if women aren’t using outside finances or other people’s money it could be one of the reasons why their businesses don’t grow as quickly as other businesses.
So yes, we did find that women preferred that as it was like the last thing they chose to do, and also we found that the larger the business the more willing they were to use other people’s money. So, you know, is there a chicken or an egg here? Was their willingness to use outside money the reason they were able to grow their businesses larger?
Susan Wilson Solovic: Why do you think it is that so few women business owners get venture capital or really any type of equity funding? What did you learn in the survey?
Pat Ewert: Well, we found that there is not a desire to even try. Again, one of those things that really concern us about women having the opportunity to grow bigger businesses because they’re just not going into that market.
There’s so much venture capital money and so much private equity money that’s out there right now that women could utilize if they just wanted to take that extra step. But there seems to be a reluctance to do that. And maybe next year we’ll find out why.
Susan Wilson Solovic: There you go, that’s good! And of course because there is so many programs such as Springboard that helps women get more acclimated to the equity markets we actually may see that increase.
Now Pat before we close, do you have any tips for women who are starting businesses or growing businesses that might help them succeed going forward?
Pat Ewert: Well one of the things you’ll find in the survey is that there are a lot of insights from women business owners. It was one of the things that was most fun about putting these together is we get a lot of feedback from female entrepreneurs about what would they do differently.
Some of the things that jumped out at us is they overwhelmingly said, “If I had to do it all over again, I’d start earlier.” Some of other things they said is always be sure you have your financing in place, watch the numbers always watch the number don’t let that get away from you.
Some of the other tips that we got from the female entrepreneurs is to be sure that you hire when you’re hiring you’re trying to fill maybe some of the areas that are not strong areas for you, so you have a good balance in the organization. I can remember one of the women said, “At first I hired everybody just like me but then when I needed something different where did I go.” So there were just any numbers—a number of things that you can get from the survey that are just incredible tips.
Susan Wilson Solovic: Well that’s great Pat. Certainly some good advice and we really appreciate you being here and joining us today.
Pat Ewert: Thank you, our pleasure.
Susan Wilson Solovic: And of course we’ve been talking to Pat Ewert, RSM McGladrey’s Director of Business Development and we appreciate her being here and being a guest on sbtv.com.
And to learn more about the details of this study or other research on small and midsized businesses from RSM McGladrey, head to their website and look for other segments with RSM McGladrey right here on sbtv.com where small business is our only business.
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