Bloomberg Businessweek recently featured a fascinating interview with Nell Merlino, the founder of Make Mine a Million. The program, which Merlino founded in 2005, had a goal of helping 1 million women-owned businesses reach 1 million in sales by 2010.
Merlino didn’t achieve that goal, but she’s looking at the positive side: “We’ve raised $10 million and helped women generate $100 million in revenue and create 6,000 jobs.”
As BloombergBusinessweek columnist Karen E. Klein notes, “Between 1997 and 2006, businesses that were fully or majority women-owned grew at nearly twice the rate of all U.S. firms.” Since then, however, the numbers haven’t changed. Currently, there are some 10 million women-owned companies in the U.S. with a total of $1.9 trillion in annual sales. What slowed women-owned businesses’ growth? According to Merlino it’s the same thing that’s stymied everyone: the recession. She says, “For a lot of women, their top goal over the last couple of years was just to survive.”
Merlino hasn’t given up on her goal: She still wants to get 1 million women-owned businesses to $1 million-this time, by 2045. Though that seems like a long time from now, for today Make Mine a Million is focusing on regional events. Last year, the program’s $100,000 online competition attracted 1,500 entrants. The top 54 companies from the contest grew an average of 59 percent in 2009 compared to 2008, and increased employment an average of 113 percent.
Despite the popular stereotype that women entrepreneurs want to keep their companies small or have “lifestyle businesses,” Merlino says a survey of women-owned companies with revenues of $150,000 to $700,000 showed that 87 percent wanted to grow. So what separates those that do grow-like the 54 women in the contest-from those that don’t? Merlino’s advice:
- Get guidance. Attend seminars, Webinar and conferences. Hire a business coach.
- Think big. Merlino uses the hot trend of cupcake businesses as an example. “Do you want a retail shop, or do you want to figure out how to sell to Starbucks?” Companies that reach $1 million in sales do so by selling to as many customers as they can. While women with corporate backgrounds know the best way to do this is reaching out to corporate customers, women without that background often don’t think that way.
- Hire. In the survey mentioned above, Merlino notes, 54 percent of women entrepreneurs thought they could grow their companies without hiring. Women tend to fear hiring, Merlino says, because they fear giving up control, not making payroll and having people rely on them. Others think doing everything themselves makes their companies more manageable. In reality, the opposite is true: Merlino points out that delegating duties frees you up to focus on long-term strategy and truly grow your business.
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I, too, doubt it very much that “women want to keep their businesses small-have lifestyle businesses.”
That’s certainly not the case with 9 out of 10 women business owners that I meet!
The Franchise King
Killer (Jessica Bosari)
This is so me. I have zero interest in expanding beyond myself, but then again, I’m not interested in being a millionaire. I just want to feed my family. There needs to be less greed in this society and I’m glad to be the change I want to see in the world…
Rieva’s advice is spot on! Over the past two (plus!) decades, I have had the pleasure of working along side many women entrepreneurs and have found that the ones that think big, delegate to others, and are willing to reach out and get help from others succeed. I believe that every women should define success in their own way–some may define success as reaching sales of $1 Million, some as having a business that allows them to be home in time to meet their children as they get off the school bus, to travel with their spouse, and the list goes on. What is great about being an woman entrepreneur, is that you have the freedom to define, pursue and achieve success for yourself!
Holly Magister, CPA, CFP
I understand that 87% of women business owners with revenue between $150K and $700K want to grow, but I’m guessing this group is a minority of women business owners. Did they by chance survey women business owners with revenue below $150K? I would hypothesize that that group has a much larger percentage that just aren’t interested in getting to $1 million in revenue. Nothing against it, but running a $1 million business brings its own set of difficulties.
Dear Rieva, I think there is one major area of consideration that was omitted…having been a successful entrepreneur for 25+ years I know what holds back many women in business….the ability to finance growth. Without a solid banking relationship and a loan officer that is receptive to establishing a line of credit for women who own small businesses, significant growth is impossible. There are many community banks that have begun to add
a “women’s banking group” which will facilitate the desire of a small business owner to reach $1,000,000 in sales. The hard part is
finding out where they are!
I believe there is a big difference between sole proprietors and entrepreneurs. I do find a quick distinction is often the desire to hire employees to take on the market, or to stay small and keep control of things, by not hiring employees, or only hiring the minimum of employees in supporting roles.
Both types of business owners are to applauded, but they need very different support structures. One thing I tell Entrepreneurs that ask me about how I made the decisions I made is that they need to define the image of the business they want to lead. I wanted a global fast growing business and that is what I have built. But I was not afraid to hire and I knew I needed experts in many areas to help accomplish this goal.
Not everyone wants the complexity of the business at our size, but it does have many rewards. Thank goodness there is room in this economy (and necessity) to have all sizes and shapes of businesses.