Gone are the days when Women were mostly confined to their homes or at most went for teaching jobs. Now, more and more women are grabbing the reins and starting their own businesses.
They are getting their footprints embedded in every industry whether it is technology, construction, professional or consulting. You name an industry and you will find women owning a business there. The number of women-owned small businesses is growing approximately twice as quickly as the national average for all start-ups. The reasons they are jumping into the world of small business are varied.
- Some had taken a sabbatical for raising children and now want to re-enter the workforce.
- Some, after working in the corporate world for long, want to be their own boss.
- Some faced a layoff from downsizing economy and so started their own enterprise.
- Some have a long cherished dream to convert their hobby of art and craft to a business venture.
In the words of Susan Duffy, executive director of the Centre for Women’s Entrepreneurial Leadership at Babson College,
It’s a certifiable trend. Women are becoming more aware of the opportunities for entrepreneurship in their lives. It’s becoming more of an option for a career move than it ever has been in the past.
The prerequisites for every business whether it is owned by male or a female is same.
- It should have a solid business plan.
- It should have an effective marketing strategy.
- It should aim at a profitable market or niche.
- It should be ready for legal and bureaucratic hurdles.
- It should have a sorted way of getting the finance for start-up and later expansion.
In addition to all these, there’s a certain set of unique hazards, which are typically present only for women entrepreneurs. The foremost is to find work-life balance followed by getting finance. The data released by American Express open State of the Women-Owned business report in 2014 indicates that four in 10 new firms are started by women.
But what’s disturbing is that in 1997 the average woman-owned firm had one employee and $151,129 in revenues, which is still very much the same. Now also, the average woman-owned firm employs one employee and generates $155,267 in revenues. This is an indication of the fact that something is wrong when it comes to female-owned firms, else the revenue was bound to increase in all these years.
Let’s go through some tips for women who are keen to start their own venture to make it big.
#1: Start a Business That Aligns with Your Personality and Life
Business can be a big firm employing hundreds of people and having revenues in millions or a small firm targeting a particular section of people.
It totally depends on your personality and risk appetite you are looking for. Right in the planning stage, you have to be clear about what your ideal vision for the business is and how it fits in your personal life. Once you have clarity on this, you can plan accordingly. It is not necessary that big profit only comes with a big business. If you tap a niche area, then to profits are enormous like a lady had a flair for painting. She used to buy simple canvas shoes for Rs 300-400 a pair and then used to paint them in her free time.
After that, she used to sell them for Rs7000-8000 a pair. She was catering to a select set of customers and was getting really good returns. So basically, she had an excellent idea, which didn’t require much of investment and returns were phenomenal. There is no dearth of such ideas; all you need to do is look carefully.
If you have good writing skills, you can make a lot of money by joining some micro job sites which are legit and authentic.
#2: Networking Is the Best Way to Market Your Business and Create Profitable Opportunities.
This is a critical skill for women entrepreneurs to learn. According to the National Women’s Business Council report, men were more likely than women to tap networks of close friends and business acquaintances. They keep building their networks since kids.
Networking involves cultivating a relationship with people, businesses, potential customers, vendors, partners, investors etc. The sole reason for networking is to get help from this known circle if a need arises in future.
It can be in the form of recommendations. If an influential person recommends your business to his circle of contacts, it will get you many customers. Similarly, if you have a good repo with a venture capitalist, your chances of getting funds increase if your business plan is solid.
Successful networking is a sincere communication with people about what you do. It can be done directly on a one-to-one basis in a community event or over a casual lunch. It can also be done virtually by participating in an online discussion or being a part of a group on a social platform.
#3: Have a Clear Understanding of Your Business’ Financial Needs.
Most of the women screw up when it comes to finances. If you are going to meet an investor, he will definitely want to know the financial details of your business.
If you goof up on it, there is no chance that you will get the finance approved. This has been stated to be a major reason by National Women Business Council for getting very fewer loans approved for female founders. According to them, “Male founders were more than three times as likely as female founders to get equity financing through angel investors or venture capitalists.” Now, this is not at all a rocket science. It’s just a basic math.
A little financial literacy is all that is required and you can work wonders. Before going for that meeting with the investors, women should be ready to answer questions like
- What are the gross margins?
- By what time do you expect a break even?
- What will be the capital requirements in future?
- How do you plan to raise that capital?
- What is your profit margin?
#4: It Is Crucial to Start The Business with Adequate Funds.
There should be enough capital available to you for the early lean days. It is because of this undercapitalization that most of the business ideas fail. There are certain overheads, which need money right from day one like rent, salaries, utility bills, inventory, equipment etc. Before starting the venture, you should have a list of all these expenses and enough capital to cover them for a couple of initial months when there will be no incoming and only outgoing. So, planning is a must and it should be really well researched before putting in even a penny. Women are normally good at planning. All they need to do is concentrate on financial planning and then there is nothing that can stop them.
#5: Don’t Sweat over Bureaucracy.
Tackling the bureaucracy is something that both men and women are scared of, though it is more in the case of latter. They dread the legal procedures and hurdles that the bureaucracy poses and of course, the corruption and red-tapism. There is no doubt about some challenges in this, but no challenge is so great that it can stand in the way of your dream of becoming an entrepreneur. Once you go out to tackle it, you will find that fear was more in the mind. In reality, it is not a big deal. Sweating over legal hurdles is useless; rather you save and channelize this energy to develop good management skills to guide you to success.
#6: Opt for Alternates Rather Than Traditional Financial Sources.
One of the most common concerns of Women Entrepreneurs is difficulty finding start-up financing. Conventional banks work on creditworthiness and often go by the rule book. It is better to look for alternates, which have softer criteria like local community banks, credit unions, and other local financial institutions that have a vested interest in the health of the local economy. There are even some financial institutions that are committed to providing loans only to women entrepreneurs. Take your business proposal to them and if you have done your homework well you will definitely get the finance.
#7: Don’t Get Intimidated by Sales and Negotiations.
Both these qualities of selling and negotiating are an art. Not everyone is born with it, but these skills can also be acquired by some effort. Women often feel intimidated when they have to sell their business idea to a prospective investor. There is nothing to be afraid of. Once you are through with your homework on idea and finances, all you need now is to be a good communicator. A good communicator is one who provides clear information, listens to the other side patiently, and has good judgment as to when to back off and save the pitch for another day. So, you need to sell your vision in a short, clear and crisp tone.
Following these simple tips should help women entrepreneurs to embark the journey with confidence and come out with flying colors.
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