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How Entrepreneurship Is Creating New Opportunities For Women

Northwestern Mutual

By Lisa Wirthman

A surge in business ownership is creating a new wave of opportunities for female entrepreneurs. Yet while the number of women-owned firms has increased, the smaller-than-average size of these businesses shows there’s still plenty of room for growth.

The number of women-owned firms in the U.S. grew 59 percent between 1997 and 2013, one-and-a-half times the national average, according to a 2013 American Express report on the State of Women-Owned Businesses. About 8.6 million women-owned businesses in the U.S. are now generating more than $1.3 trillion in revenues and providing jobs for 7.8 million workers.

“Around the country we see this uptick of women starting their own businesses,” said Ana Recio Harvey, director of the Small Business Administration’s (SBAs) Office of Women’s Business Ownership and a former small-business owner.

A Drive for Growth

What’s driving that growth? Some women who are frustrated with disparities in the workforce—particularly those over 50—are now leaving corporate America to start their own firms, Harvey says.

Other business owners are women who couldn’t find jobs or encountered other financial difficulties, Harvey says. The SBA works with many women who want to turn an informal business or hobby into a more formal revenue-generating enterprise.

“It’s a combination of the drive that women have always had in guiding their own destinies and the economic situation that actually encouraged them to start their own businesses,” she said.

Harvey understands that drive: Originally from Mexico, she came to the United States 20 years ago and started a small English-to-Spanish translation business so she could be at home with her young son.

It’s All in the Planning

Like many women business owners, Harvey didn’t plan for growth. One day a client asked if she offered French translation services. “My mind said no, but my mouth said: ‘Well, of course we do French,’” she said.

Harvey promptly found a very capable French translator—and her first hire. Her company started growing organically from there until it became a full-service multilingual communications firm with 75 employees doing translations in 25 languages.

Since the recession, women-owned businesses have added 175,000 jobs to the U.S. economy, according to the report. Yet much of that growth comes from the owners themselves: About 90 percent of women-owned firms have no employees other than the business owners. Only two percent of women-owned businesses have 10 or more employees, which account for 76 percent of the jobs provided by these businesses, the report states.

“Many women start a business, and they have such a reluctance to hire,” said Harvey, who refers to these one- to two-person businesses as “sprouts.” What keeps many of these sprouts from growing further is a lack of planning, she says, which is where the SBA can help.

Although she had a college education, “The one thing I did not know was how to run a business,” Harvey said. “When you don’t have that kind of training, you’re really improvising your way to success.”

Finding Safe Capital

Access to capital is another barrier when it comes to growth, Harvey says. When she landed her first big translation contract, she wasn’t sure how she would finance it.

Her solution? A cash advance on her credit card. While all of Harvey’s employees got paid, the knowledge of where to find a less risky source of capital would have been a better solution, she says.

Women with good business plans shouldn’t be afraid to approach a lender, Harvey says. Yet many women still use their own savings to finance their businesses. The SBA’s network of more than 100 women’s business centers in every state and territory offers a wide range of resources to give women the planning knowledge they need to start, grow, and finance their businesses—including how to talk to lenders, Harvey says.

Flexibility Counts

While women don’t require different business knowledge than men, what’s most unique about the SBA Women’s Business Centers is the flexibility they offer to women, she says.

The nationwide centers are required to be open over the weekends and after hours. “We’re trying to meet the women where they are,” Harvey said. Last year, her centers provided localized services to about 130,000 individuals around the country—including a few men.

A future goal for Harvey’s office is “tap into the missing middle,” she said. While numerous resources exist for startups and companies already over a million dollars in revenue, she says more work needs to be done to support the middle ground. “And that’s going to make a huge difference to the economy,” she said.

Lisa Wirthman writes about business, sustainability, public policy, and women's issues. Her work has been published in The Atlantic.com, USA Today, U.S. News & World Report, Fast Company, Investor’s Business Daily, the Denver Post and the Denver Business Journal.