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Six Tips for Women Entrepreneurs
By Peri H. Pakroo J.D.,
Author of The Women's Small Business Start-Up Kit: A Step-by-Step
Legal Guide
More women than ever before are grabbing the reins and starting their
own businesses. The number of women-owned small businesses is growing
approximately twice as quickly as the national average for all start-
ups.
For entrepreneurs of all stripes -- women and men included -- the pre-start-up phase is typically characterized by a flood of questions
about what exactly it takes to make it in business. Are there
different answers to these questions for men versus women? Not really.
Every business needs to be based on a solid idea, aimed at a
profitable market or niche, have solid systems in place, and market
itself effectively. And of course, the legal and bureaucratic rules
facing women entrepreneurs are exactly the same as those facing men.
But as many women business owners will tell you, the road to success
for women often involves its own unique set of curves. Surveys of
women business owners show that women's business concerns tend to skew
towards issues such as finding work-life balance, start-up (or
expansion) financing, and marketing. The following tips address some
of the issues and concerns that are most commonly faced by women
entrepreneurs.
1. Start a business that works for you and fits with your personal
life. There are no rules as to what a "real" business looks like. For
some businesspeople, success might mean an international operation
with hundreds of employees and annual revenues in the tens of
millions. For others, a small consulting firm or artisan business that
pays a healthy salary and allows generous personal freedom might be
considered the pinnacle of success. The key is to take the time early
in the planning process to consider this question and decide for
yourself what your ideal vision is for your business and your personal
life.
2. Don't sweat the bureaucracy. A lot of would-be entrepreneurs, women
and men alike, find themselves stuck on the verge of taking the leap
into starting a business, but confused about how to tackle the legal
rules of getting started. This hang-up is always grounded more in fear
than reality; the truth is that clearing the bureaucratic hurdles
isn't usually big deal.
You can usually start a sole proprietorship (the legal term for a one-
owner business) or a partnership (a business with more than one owner)
by registering with just one government office. And for business
owners who want protection from personal liability for business debts
-- often referred to by the legal jargon "limited liability" -- the
simplest corporations or limited liability companies (LLCs) require
only a couple more registration tasks to complete.
Of course, there's a lot more to launching a successful small business
than dealing with bureaucratic requirements. For starters, you'll need
to have a sound business idea, and you'll need to be able to develop
good management skills to guide it to success. This is where you
should put your mental energy and good ideas; don't waste precious
brain cells worrying about the legal hurdles.
3. For businesses with moderate to significant overhead, it is crucial
to start the business with adequate funds. Starting a business without
enough money to ride out the early lean days (described as"undercapitalization") is the most common reason that businesses fail.
Undercapitalization is less of an issue with small service-based
businesses that don't have many fixed expenses. But businesses with
overhead such as rent, salaries for employees, utility bills, inventory, equipment, insurance, or other fixed costs absolutely need
to plan carefully and pull together enough funding to support the
fledgling business as it works up to speed.
Also, though it's important to start your business with enough
capital, that doesn't mean that every business needs piles and piles
of money to get off the ground. Plenty of mega-successful businesses
were started on a shoestring: Apple Computer started in a garage;
Hewlett-Packard started in the dining room of the Packard home; the
list goes on and on. Generally speaking, a business that can find
creative, thrifty ways to provide its product or service -- especially
in its early days -- will typically find more success than a business
that adopts a "spend more money" approach.
4. If you need start-up or expansion financing, consider sources other
than traditional banks. One of the concerns most commonly cited by
women entrepreneurs is difficulty finding start-up financing. And it's
little wonder: traditional banks typically don't lend money to new
ventures that don't have a track record of success or
creditworthiness. Instead of focusing on conventional big-chain banks,
start-ups should instead look for local community banks, credit
unions, and other local financial institutions that have a vested
interest in the health of the local economy. Often, their application
processes and criteria are softer than the big banks.
Two resources that women should definitely look into are Women's
Business Centers and community development financial institutions.
Women's Business Centers (WBCs) exist nationwide and focus on
supporting women entrepreneurs through business training and
counseling, and access to credit and capital, among other services.
Community development financial institutions (CDFIs), which are
certified by the U.S. Treasury, are a fast-growing segment of the
business financing market specializing in loans to underserved
communities and populations. CDFIs usually -- but not always -- have a
specific focus such as improving economic opportunities in blighted
communities or supporting women- or minority-owned entrepreneurs. Both
WBCs and CDFIs can be especially helpful for start-ups, businesses
with poor credit, and businesses seeking relatively small loans,
generally up to $100,000. Even better, they often offer guidance and
expertise to your business in addition to financing, which will help
your chances of success.
As an example, the fabulous nonprofit where I teach entrepreneurship
classes -- WESST in Albuquerque -- is both a WBC and a CDFI. It offers
a wide range of high-quality classes on business planning, financial
management, and marketing, plus offers loans and one-on-one
counseling. With an organization like WESST on its side, a business
gets a major boost in its chances of success.
5. Network like a social butterfly -- it is one of the best ways to
market your business and create profitable opportunities. Networking
involves actively cultivating relationships with people, businesses,
community leaders, and others who present possible opportunities for
your business -- not just as potential customers, but also as vendors,
partners, investors, or other roles. Remember, networking is not the
same thing as sales! Rather than the simple goal of making a sale, a
huge goal of networking is to inform other businesspeople and
influential people about what you do in hopes that they will recommend
your business to their circle of contacts.
I look at networking more as a self-employed lifestyle than a specific
activity. You are "networking" every time you attend an event held by
a local trade association, get to know other business owners and
community leaders, send an email introducing two of your contacts to
each other, write a letter to the editor, participate in an online
discussion group, or have lunch with another local business owner.
6. Forge relationships with contacts before you need help from them.
For example, if you need the support of a local politician on an
upcoming city zoning decision, you'll have a better chance of getting
the politician's vote if he or she already knows you and thinks
favorably of your business than if you place a call to his or her
office out of the blue.
© 2010 Peri H. Pakroo J.D., author of The Women's Small Business
Start-
Up Kit: A Step-by-Step Legal Guide
Author Bio
Peri Pakroo is a business and communications consultant, specializing
in legal and start-up issues for businesses and nonprofits. She has
started, participated in, and consulted with start-up businesses for
20 years. She is the author of The Women's Small Business Start-Up Kit (Nolo) and top-selling business books. Her blog is at
www.peripakroo.com.
For more information, please visit www.nolo.com and follow the author
on Twitter and Facebook.
Go to http://bit.ly/Nolo_WomensSmallBusinessStartUpKit to access an e-
galley of The Women's Small Business Start-Up Kit on NetGalley. It can
be read on the Nook, Kindle, Sony e-reader, or on your computer.
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