Tips for women entrepreneurs to boost revenue past $50,000
Half of U.S. workers are women and there are about 10.1 million businesses owned by females, according to the Shriver Report. Those companies employ about 23 million people and earn a combined revenue of $3 trillion.
But only 3% of businesses owned by women in the U.S. actually have revenue of $1 million, compared with 6% to 7% of companies owned by men, according to the Center for Women's Business Research.
In fact, 75% of all women-owned businesses in the U.S. have annual revenue of $50,000 or less.
Nell Merlino, president of Count Me In for Women's Economic Independence and creator of "Take Our Daughters to Work Day," said in an interview that there are several reasons many women-owned companies struggle to break past the $50,000 level.
One thing that holds women back is that they tend to start businesses and think they have to do everything themselves, Merlino said.
"I think one of the keys to business growth is to be able to delegate responsibility to others, and it is not the first thing that a lot of women think of. They are constantly trying to think of how they can do more themselves, and as a result there's a real limit as to how far you can go," he said.
"If you insist on making the products, packing the boxes, and doing all that stuff, that's the only thing you're going to be able to do...How are you going to expand your capacity if you're already doing everything that one person can do?"
Another obstacle women entrepreneurs must deal with is not taking time to assess whether they have a product or service that people really want. She said some business owners may not break through the $50,000 level because they may offer a product or service that only people in their neighborhood need, or their product is available cheaper from a large retailer like Walmart or Target.
"Or you've come up with something that isn't really a product, but it's a hobby. I think one of the things you've really got to get clear on early is do you have something that you can turn into a bigger business than $50,000," Merlino said.
She recommends that people test out products at a trade show, on the Internet or even at a flea market. They just need to go where there are people who can give them feedback and see if people really buy what they are offering.
She also says it's important to visit trade shows to catch up on the latest trends and become more familiar with their industry. They also may find other professionals in their field who can offer advice or even serve as a mentor.
Getting to the next level also means women entrepreneurs need to understand their own financial information.
"You don't have to be a genius about it. But you need to understand some basics or find someone who you can talk to so you understand it and learn enough so no one can rip you off," Merlino said.
Ultimately, establishing relationships with individuals and companies who can help grow your business is key to being successful. Whether it's finding the right vendors and suppliers, or hiring employees to do various tasks, it's important to look for people who can help achieve your business goals.
Many entrepreneurs mistakenly believe that if they keep their business small they will have more time for their family, but Merlino said that thinking is actually backwards.
"If you grow a business to at least $1 million or even to $300,000, you can hire someone else...and have a little more time to spend with your family than if you keep it so small you have no time to spend with your family...my motto is you can have it all as long as you don't do it all."