The Journey of Women Business Owners
When I was a kid some neighborhood boy told me I was “cool as a cucumber” because I knew every player on the New York Yankees and their respective batting averages. I didn’t think knowing that was worthy of such an accolade, since these were the facts all good Yankees fans should know, but my brother told me most girls didn’t know stuff like this. That was, I think, the first time I realized there were different expectations for boys and girls and we were not all judged by the same standard.
I “blame” this on my dad, a small business owner and sports fanatic, who became a father at the age of 20. He was too young, I suppose, to care whether I was a boy or girl; all he cared about was that I was his first-born and someone to play catch with.
Fast forward to my college years, when I was studying journalism at the University of Missouri, the top-rated journalism school in the country at the time. True it was only the early 1970s, but this was the time Ms. Magazine was founded, so feminism was no longer a foreign notion, though many of the young women in my magazine journalism class were shocked to find out that most (if not all) of the editors of the esteemed “seven sisters” magazines (all targeted to women—mostly housewives) were men.
I was volunteering at the campus radio station and told whoever was in charge I wanted to read the sports news on air, and not just the news. That was unheard of—and I was unceremoniously turned down. For the rest of my college career, I kept asking to read the sports and the “bosses” kept replying some version of “girls can’t do that.” (I did get to do a sportscast once when the sports guy who usually went on after my regular newscast pretended to get sick before his airtime and there was no choice. To this day I will be ever grateful to him. He went on to be a TV sports anchor in San Diego.)
It was later in that decade that the notion of “equal pay for equal work” started being addressed seriously, which makes it more distressing that we’re still demanding that 40 years later. It was also in 1974 that the Equal Credit Opportunity Act (ECOA) was enacted. Yes, it took until 1974 to make it illegal “for creditors to discriminate in any aspect of a credit transaction on the basis of sex or marital status.” Essentially until then a woman could not get credit unless she had a male co-signer.
In the late 70s the answer to “equal pay for equal work” was that women weren’t equally educated and therefore not entitled to the same salary as men. Naively believing this, many women rushed to business schools to get their MBAs (my employer at the time advised me to get one as well). As a result by the time the 90s rolled around there were plenty of women trying to climb the corporate ladder and “break the glass ceiling.”
The problem came with the recession of the late 80s/early 90s. As economic hard times descended last-hired-first-fired became a reality and those millions of now highly-educated women (who basically got that far without role models) were laid off. But instead of accepting defeat, they joined the men also affected by this first “white-collar” recession and became entrepreneurs.
I’ve always said (by that time I’d been the editor of Entrepreneur magazine for a number of years—and had even attempted to launch magazines for women entrepreneurs) that the entrepreneurial revolution of the 1990s wasn’t born out of a wave of innovation—not at the beginning. It was started out of necessity. People started businesses because they had mortgages to pay and families to feed.
Women business owners became a symbol of that entrepreneurial surge. For most of the decade their startup rate was at least double, sometimes four times that of the general startup rate. And yet, I used to get letters—heartbreaking letters from women who were routinely turned down for funding—even the ones who owned successful businesses. One single mom from Ohio wrote to say her banker (whom she knew) wouldn’t give her a loan unless her 19-year-old son—a college student with no source of income—would co-sign it.
After an interview with me appeared in a Cleveland newspaper, someone from Akron (funny how you never forget things like this) sent me the newspaper clipping and essentially “damned me” for encouraging women to start businesses instead of “staying home in the kitchen where they belong.”
But those entrepreneurial women of the 90s refused to be deterred—and backed by an active Office of Women’s Business Ownership in the SBA (led by the amazing Betsy Myers) and dozens of women business advocates appointed by state governments, women’s businesses took root and thrived.
I wish I could say that was the start of the battle and it was won, but I can’t.
It’s 2015 and many businesses are thriving once again. We’re in the midst of another dotcom boom, but this one consists of smarter entrepreneurs who are using the money they raise to grow business and not throw parties.
But, just as women in general still make 78 cents for every dollar earned by men, entrepreneurial women still face issues—it’s still more difficult for women business owners to raise money than men, even with the Small Business Administration’s equality efforts. Though it’s getting better, the promises of the 90s haven’t yet been born out. Back then the goal was for women-owned businesses to total half of all business by 2000.
That not only didn’t happen, according to a report from the Institute of Women’s Policy Research, today women own almost 29 percent of businesses in the U.S. And what’s worse, according to data from the Economic Policy Institute, WBOs earn a mere 25 cents for every dollar made by male-owned companies. And according to a report last year from EY, businesses owned by men are 3.5 times more likely to earn more than $1 million in sales than businesses owned by women. Only 2 percent of WBOs ever crack the $1 million barrier.
Last year Babson College released a report, Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital, revealing that 85 percent of all VC-funded businesses had no women on their executive team, only 2.7 percent had a woman CEO and the number of women partners in VC companies decreased from 10 percent in 1999 to 6 percent in 2014.
There’s always a lot of hand-wringing accompanying reports like these. But Amy Millman, the president of Springboard Enterprises which helps women entrepreneurs accelerate their growth says the problem is many women start consumer-oriented businesses and VCs don’t really have an interest in funding those.
However, Candida Brush, a Babson professor of entrepreneurship and author of the VC study, says it’s time to stop blaming women. She told Businessweek (and later echoed those comments to me) “It was all about what women need to do. Not anymore. The women are there, they’re qualified, and they perform well. I’m very tired of this argument that it’s the women who need to fix themselves.”
And so, paraphrasing that old cliché, women have come a long way, we have a long way yet to go and many of us are simply tired of waiting. That doesn’t mean we’re giving up, but we need to speak up and demand what we deserve. There’s a lot of truth to that old Helen Reddy feminist cry, “I am woman, hear me roar, in numbers too big to ignore…”
Editor’s Note: If you’re a woman business owner reading this article, I would love to hear your thoughts in the comments. What are obstacles you still face? What can we be doing to continue the journey of women business owners? We would love to hear personal experiences, advice, and more!
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