What do you see in the status of entrepreneurship today?
Most people do not know that entrepreneurship has been declining for nearly three decades, meaning that the percent of adults in the U.S. that start new businesses each year has been shrinking. In 2015, we experienced an increase, which is a very good sign. However, one positive year does not reverse a long-term trend.
What is the status for women in entrepreneurship? Men are currently twice as likely to answer the entrepreneurial call, as women represent approximately 36 percent of startups each year. This is down from 44 percent of the total in 1997 when we began tracking.
In 2015, women-owned businesses with employees experienced notable revenue growth, according to the Kauffman Foundation.
This is progress to be celebrated, yet less than 11 percent of women-owned businesses have employees. The remaining 89 percent have average revenue of $20,500 (versus the average revenue from all employer firms of $1.3 million).
Experts agree that women face unique barriers for starting and growing a business, and efforts to deliver the right solutions will define the progress of the evolution. Entrepreneurship is essential to the rising standard of living and expanded economic opportunity. We are the creators of new wealth and new jobs, the inventors of new products and services and the revolutionizers of society and the economy. And, many experts think the future of the U.S. economy is in the hands of women.
The glass is half full
My takeaway is that there is a real need for more startups, and most importantly, for growth companies that employ workers and create sustained value. This equals sizeable opportunity!
Although there is much work to be done and progress will not be achieved overnight, nothing is insurmountable. Seeing the glass as half full translates into the ability to identify opportunity.
The lowdown from my story
Experts agree that there are three key forms of capital that must be cultivated and strengthened for success: financial capital (funding), human capital (skills) and social capital (business networks). My experience has taught me that you don’t need to have mastered all three areas at launch (good entrepreneurs learn as they go), but you must focus on growing strength in all three areas, and you must be diligent about it.
If I rated my business on a scale of one to 10 in these areas at launch, here’s the score:
Financial Capital: 2
At launch in the mid-1990s, we had amassed savings of $40,000 (approximately $63,000 today); we did not have enough collateral in our home to qualify for a commercial loan; and we did not have access to potential investment partners. It is important to note that the angel and VC investment community looked significantly different than it does today. So, we forfeited my income, and I leapt full-time into a self-funded, bootstrapped endeavor. We were doing lean when lean looked crazy, not cool. Bill, my husband and co-founder, kept his job for over three years before joining me full-time, not only to fund the businesses but to meet the financial needs of our family. You see, I took the leap when our sons were 2 and 4 years old. We chose to embrace the opportunity before us, even with financial obstacles.
Human Capital: 5
Both co-founders have an MBA, and we had grown valuable skills in middle management positions in our corporate jobs. I rate human capital as a five, because we did not yet have the skills and networks that are cultivated at the executive level. However, we quickly realized that almost all of our skills were translatable if we simply took a moment to connect the dots. You know a lot more than you think you do! No one knows it all, and we all learn as we go. This approach allowed us to grow from a five to a 10 with ease.
Social Capital: 0
Yes, zero. We entered the in-home care industry, which was completely unrelated to our previous careers at Accenture, Ernst & Young and Coors. Our business networks were not of value. The industry was largely undefined, which gave us the opportunity to become one of the first leaders and to participate in building the industry. It also meant that we had to cultivate business partnerships and networks from the ground up. I grew very thick skin. I placed a lot of cold calls. I convinced not-so-willing potential partners to accept an in-person meeting because I was getting on a plane to their city. I gave of my expertise and time until it hurt to prove value and credibility. I was very strategic about maximizing efforts and growth of this important capital. It is one thing to be known in a network, and it is another entirely for you to truly know your network and to take the lead in crafting win-win relationships.
The barriers were great, and so was the opportunity. We had to do the hard work to grow the capital that allowed for seizing the opportunity. Finding the courage to accept a challenge is invaluable for seeing opportunity. If entrepreneurship is your calling, you will have challenges, but when you see opportunity, nothing will be a show stopper. What opportunity do you see? How will you seize it?