What does small business success mean to you? Many entrepreneurs define it by steady-to-heavy cash flow (money, in other words) and they’re not wrong, according to a new report from SCORE. The Megaphone of Main Street: Women’s Entrepreneurship, Spring 2018 covers key findings as they relate to women entrepreneurs, including data collected on women-owned business success, financing, and the impact of mentorship.
Four key metrics included in the report define and measure women-owned business success. Revenue is one, of course, and the remaining three include the likelihood to start businesses, longevity, and hiring practices.
How can these metrics aid to the long-term health of women-owned businesses, and why should female entrepreneurs pay attention to them? Let’s take a closer look at each one.
1. Likelihood to Start a Business
Yes, simply starting a business can aid to its success!
Forty-seven percent of female business owners that SCORE responded that they started or acquired a business in the last year. This makes women more like than men (at 44%) to follow through with launching a small business.
Women are likely to start a business at any age past 18 years old, but they outpace men significantly as they grow older. By age 25, there are 51% of female business owners to 47% of men. At age 75 and older, women-owned businesses are the majority at 54 percent compared to male-owned companies at 29%.
Starting a business has never been easier or more accessible, thanks to a plethora of available resources and low launch costs. But what compels female entrepreneurs to get into the game later in life? Some of their success can be attributed to having built up years of experience within their given field and developing valuable connections. As they grow older female entrepreneurs also have a deep understanding of how to plan ahead, which includes making time for self-care and focusing on their health.
2. Revenue Growth
Although revenue is certainly important to small business owners, SCORE reports that for businesses currently in operation there’s no real difference in anticipated revenue growth regardless of the owner’s gender. Business owners are largely in agreement that their revenue might experience a slight increase or decrease, but will stay the same.
Again, although revenue does matter for small businesses, growth is quickly turning out not to be the only indicator of success.
3. Number of Years in Business
We’ve all read the varying statistics about startup failure—how it can happen within five years or even the first year in business due to circumstances like no market need or money. Is a startup really more successful the longer it stays in business?
According to SCORE’s report, having more years in business definitely helps to aid its overall health. While women-owned businesses tend to be a few percentages ahead of their male counterparts within the first five years, the numbers start tapering downward around the 20-plus year mark where men, at 17%, are more likely to be in business than women at 13%.
When a small business is hiring for jobs, it’s often considered to be a beneficial win-win for the health of the company and economy. Sixty-five percent of surveyed female business owners report no change in hiring practices, planning instead to stay about the same size while 27% say they will increase their number of employees.
Hiring is often a challenge for small business owners, many of which struggle to find the right fit and retain the talent on their team. As a result, an emphasis has been placed on establishing a company culture where all feel welcomed, challenged, and able to thrive while vetting for applicants with proven track records for working hard and being able to adapt quickly to their new role.