BOSTON - More and more women are starting their own businesses after being laid off from jobs, and this is highlighting special issues that women in transition need to consider before launching a business, according to ClearRock, an executive coaching and outplacement firm headquartered in Boston.
Nearly half (48%) of all privately owned firms in the U.S. with employees are owned 50 percent or more by women today, according to a Center for Women's Business Research study.* Women-owned firms with employees have grown nearly three times as fast as all privately owned firms during the past seven years, according to the study.
"Laid-off women have been especially successful in turning something that they are good at, or interested in, into a business - whether it's geared toward women customers, or a professional service area such as marketing, pubic relations, human resources, or accounting, which became consulting practices," said Anne Hawley Stevens, a managing partner for ClearRock. Stevens, who founded ClearRock in 2000, is one of two equity partners in the firm.
60% of all new businesses in the U.S. start out with at least one employee besides the founder, according to the Global Entrepreneurship Monitor. ** Men are twice as likely as women to start a business of any type, according to the index. However, women-owned businesses, with at least one other employee, are growing at twice the rate of male-owned businesses with employees, according to the Center for Women's Business Research.
Among the issues women in transition need to consider before launching their own businesses are:
- Gain the full support of your family and significant others first. Although this is a critical issue for both would-be male and female entrepreneurs, it is an especially essential element for women. "Spouses, significant others, and children are normally more used to the male being the one who works long and irregular hours, which are usually required of a start-up business," said Stevens. "Many women feel that they will be able to still 'do it all' - maintain their roles as parents, spouses, and significant others - and often find this to be extremely difficult. Involving them in helping out with the business in any way, if necessary, will be much easier if they buy into the idea from the very beginning."
- Toughen yourself up. "New women entrepreneurs find that they have to continually 'prove' themselves - to potential clients, to lenders, and even to prospective employees," said Stevens. "A woman entrepreneur's commitment to doing what is necessary for the business to succeed is often unfairly questioned more than a male entrepreneur's, and the pressure on laid-off women to 'just go out and find another job' is more intense. Women will find it tougher courting clients, obtaining financing, and attracting employees when they have to go head-to-head against male-dominated businesses or in male-dominated industries, and they need to be mentally ready for this."
- Be prepared for growth, which may come unexpectedly. Once a woman-owned business succeeds, its growth tends to be more explosive, growing at twice the rate of male-owned businesses. "Laid-off women need to consider not only will their new ventures replace income they lost from their old jobs, but they must be prepared for rapid success if it should occur," said Stevens. "An important question they need to ask themselves from the start is, how far do they intend to take their ventures should they succeed?"
- Opportunity to break through the "glass ceiling." About one-quarter (23%) of women managers and executives leave the corporate world each year, frustrated at opportunities for advancement, according to the Center for Women's Business Research. "Many employers prefer to think that women leave for reasons other than lack of upper-management opportunities because they're not willing to make the necessary workplace culture changes to address the problem. Women who start their own businesses have unlimited potential, as well as unlimited responsibility. However, women should be prepared to delegate responsibilities and authority to qualified people, or else they may wind up having to make all the decisions themselves."
* For more information on the 2003 Global Entrepreneurship Monitor, visit www.gemconsortium.org.
** For more information on the Center for Women's Business Research study, visit www.womensbusinessresearch.org.
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