Generating a million dollars in revenue is a milestone in any company’s history, even in today’s financial currency. But for many women business owners, it is an elusive goal.
Even though women own half of the businesses in the United States, fewer than three percent of the 10.4 million women-owned businesses gross more than one million dollars in annual revenue, according to the latest data from the Center for Women’s Business Research. By comparison, seven percent of all men-owned companies have reached the million-dollar mark.
Factoring into the equation is the fact that nationwide women are opening small businesses at a growth rate twice as fast as men. And the revenue of these firms increased by 46 percent between 1997 and 2004, compared with 34 percent for all privately held firms in the nation. Yet women are very much behind in the ownership of midsize and large companies.
For reference: Fewer than four percent of women-owned businesses have revenues of $500,000 or more per year, compared with 11 percent of businesses owned by men. Additionally, 46 percent of women-owned businesses have revenue of less than $10,000 per year, compared with 30 percent of men-owned businesses. (Source: U.S. Census data).
Why the disparity?
Various studies have indicated that the key reasons for the disparity in the number of $1 million-per-year women-owned businesses compared with men-owned businesses at that same revenue level include:
Women’s recent entry into business ownership. As late as 1974, women were not allowed to hold credit in their own names in many states. And there are fewer role models for women operating at this level of business.
Lingering financial discrimination. Some women still feel there is a closed door when it comes to getting loans, even though banks and other business organizations are focusing attention on women-owned businesses, which generate $2.5 trillion in sales and spend $103 billion a year on major business services, including human resources and information technology, according to the Center for Women’s Business Research statistics. Nationally, Wells Fargo & Co.’s lending goal, begun in 2003, is $20 billion over 10 years to women-owned businesses. KeyCorp’s KeyBank announced in February that it would lend a minimum of $1 billion over the next three years to women business owners.
Fear of taking on debt. A study by the Center for Women’s Business Research showed that women were less likely to use or seek credit than men, even when running comparably sized businesses. To many women, borrowing money connotes being in trouble rather than borrowing for growth. Limited capital means limited growth.
Lack of financial skills. Women are committed to the product or service they’re providing, and many don’t focus enough on the financial realities of the business.
Different goals. Commonly cited reasons for going into business are independence and flexibility, yet women typically retain more household and parenting responsibilities than men. Many women choose a small or part-time business as a way to accommodate their family commitments.
A millionaire mind-set
For many businesses, the core reason they hit that million dollar number is the ‘millionaire mind-set.’ Many women are happy just being their own boss and making a decent income. They have a small-business mentality that often includes a reluctance to delegate work so they can truly be a visionary leader who focuses on growth and how to achieve it.
The nationally focused ‘Make Mine A $Million Business’ program was designed to assist women-owned businesses in reaching the $1 million mark in annual revenue by growing sales — definitely setting a bigger business mind-set. It was founded by Count Me In for Women’s Economic Independence along with OPEN from American Express. The National Association of Women Business Owners is also a partner.
Since the program was launched in March 2006, more than 15,000 women entrepreneurs from across the country have joined with the goal of reaching $1 million (or more) in annual revenue by 2010. Why is this push being made? If one million women generated one million dollars in revenues by 2010, possibly four million new jobs would be created with an estimated $700 billion added to the U.S. economy.
According to a study, The Leading Edge: Women-Owned Million Dollar Firms, conducted by the Center for Women’s Business Research and underwritten by AT&T and KeyBank, women-owned businesses that generate $1 million or more in revenue distinguish themselves through their use of (1) multiple funding sources, (2) sophisticated financial management practices and (3) utilization of technology.
Local millionaire mind-sets
Small businesses (those with 500 or fewer employees) comprise 94 percent of the 26,842 employer firms located within the San Antonio MSA. In addition, there are another 88,722 small businesses without employees that provide the principal basis of financial support for their owner. From the most recent research available, there are 32,092 privately held women-owned businesses in San Antonio that employ 71,033 people and contribute $9.2 billion in sales to the local economy.
In San Antonio, the number of privately held women-owned companies increased by 17 percent between 1997 and 2004. These firms saw their employment grow by 27 percent and their sales increase by 48 percent. How many women-owned firms in San Antonio generate a million or more dollars a year in revenue? Current statistics from the last census have not yet been released, so we don’t know.
However, we are proud to be able to profile 3 local $1 million ladies and some of their insights into growing a business.
KATHLEEN ACOCK, PRESIDENT,
ALPHA BUILDING CORPORATION
Kathleen Acock grew up in her parents’ construction business. It was founded in 1969 and hit the $1 million mark eight years later. During summer breaks as a teen, she worked alongside her dad in the operations side of the business, then with her mom on accounting and cash management; she considers both her mentors. Never having planned to enter the business, she realized she loved it — even if women in commercial construction were rare.
So in 1993, she assumed the presidency and increased revenue that first year by 8 percent. Implementing a five-year business plan upon becoming president, she saw the firm exceed $10 million in annual sales in 1996. The annual rate of growth has been about 15 percent. Acock says her business plan is followed closely and reviewed routinely.
Alpha Building Corporation focuses on academic, commercial and industrial construction in the Southern United States, from Tennessee to Arizona. Its primary clients are architects, engineers and facilities managers for colleges, universities and school districts. Acock has shared 7 percent of her company with seven active managers who have responsibility for operations, accounting, quality assurance, safety, marketing and IT.
A turning point for her company came with a strategic move to form a sister company and capitalize it with investments from six managers who remain with the firm today. Concurrently, she replaced the outdated accounting system and increased the focus on employee training and safety. In 2000, the two firms were merged, strengthening Alpha’s processes and reputation as an industry leader.
What was the single action that has most positively impacted your business’ success?
“Bringing in new people, new ideas, new capital to grow the business.”
What is the one characteristic you feel is the most important in running a successful business?”Respect. Respect for your employees, their ideas, their work. Respect for your subcontractors — treat them as partners. Respect for your clients – understand that this is their business and you are there to help them move it forward successfully.”
Why do you feel you have been successful as a business owner?
“I truly love what I do. I have great people working with me. We understand that our work, individually and collectively, has a purpose.”
What would be your advice to women who want to own a million dollar business?
“Start a business you love – one that has a unique product with universal appeal. Businesses that are willing to take a risk are the ones that offer the best rewards, but you will have to work harder to get the capital, the clientele and the great management team that will support your vision. Develop strong operational processes and systems. And follow a good management plan. Think constantly about how to grow your business and how to protect it.”
KATIE HARVEY, PRESIDENT/CEO,
KGB TEXAS PUBLIC
RELATIONS/ADVERTISING
At 24 and not liking the travel required by the company she was working for, Katie Harvey launched her own public relations and advertising firm. Then the firm she had been working for became her first client. Five years later, KGB Texas reached the $1 million-per-year level in revenue.
She credits this meteoric rise to winning a big account, Taco Cabana. After that, she says, “We started being asked to the table by some major corporations in San Antonio.” She also notes, “When you are young, have no money and no responsibilities, it never crosses your mind that you CAN’T do something!”
Since 1999, KGB Texas has grown an average of 40 percent each year. It now has offices in both San Antonio and Houston, with 30 and five staff members respectively. It is considered one of the largest firms in South Texas and at a new point in its evolution, following a business plan that is fine-tuned yearly by the senior leadership team, shared with all employees and followed closely.
Harvey considers her mentors to have been her father, who encouraged her to start her own business; her mother, who also taught her she could achieve whatever she set her mind to; and Charlie Amato, CEO of SWBC — who has always represented someone who loves his work and works hard at it. Her two young sons bring balance to her life; she also shows and rides her Arabian horses competitively.
What was the single action that has most positively impacted your business’ success?
“Hiring the best people I can find. And trying my absolute best to take care of them.”
What is the one characteristic you feel is the most important in running a successful business?
“To empower those around you. Be available to them. Listen. Give them the tools to succeed and get out of their way.”
Why do you feel you have been successful as a business owner?
“I think you have to believe in yourself, your product and your people. You can’t be afraid of making mistakes, but you must learn from them. You have to be willing to work hard, but work smart, too. And you’re kidding yourself if you don’t recognize that a little bit of luck plays into it as well. Most importantly, using the gifts that God gave you to the best of your ability is all that you can really do. Success is self-defined.”
What would be your advice to women who want to own a million dollar business?
“Surround yourself with mentors who can help you. Listen to them. Have a plan. Stick to that plan every day. And in order to grow your business, you have to be willing to bring on people you trust, empower them, and let them do their job. Delegate. There are many successful women to turn to when you’re starting or growing a business. Take every opportunity to meet them and to learn their stories.”
PATRICIA PLIEGO STOUT,
PRESIDENT & CEO,
THE ALAMO TRAVEL GROUP, LP
In 1983, Patricia Stout and her then-husband purchased a franchise of International Tours, Inc. After a few months, her husband decided that he did not like the travel business and before closing it, asked Stout to check it out. She loved it, and the business was hers.
Although she did not have a background in the travel industry, Stout had been a business manager and administrator for companies. She credits these two fields of experience with helping her reach the $320,000 level in her first year and then to grow the business to the $1 million-per-year level in three years. She was also driven by motivation to have the freedom to spend time with her family and to secure their financial future.
In 1990, she was introduced to government contracting, and Stout decided this was her niche. She pursued it and was awarded her first government contract in 1994. She continues bidding today and handles mostly government, Department of Defense and corporate accounts. She notes that it is very important for her business to be certified in many categories in order to be able to compete. Her company’s growth has averaged 20 percent each year, with 2006 growth of at least 35 percent expected.
What was the single action that has most positively impacted your business’ success?
“Perseverance.”
What is the one characteristic you feel is the most important in running a successful business?
“Purpose.”
Why do you feel you have been successful as a business owner?
“I have worked six days a week since I started this business. I am seriously involved with what happens every day in every office (13 offices so far), and I constantly look for new business opportunities. I take good care of my employees, and I am very frugal.”
What would be your advice to women who want to own a million dollar business?
“It is best to have a plan and to get engaged in a business that you know well and that you like. Get your feet wet working in a large corporation. Look for financing before you get started, do not be afraid, go with your instincts, and know that your new business will require most of your time and money. It helps to know administration, marketing, sales – and if you don’t, then find mentors, lawyers, consultants and accountants. They can be your best friends. If you love your business, you will be successful. In the early stages, as a single parent, it was survival.
Author: Donna Hinkelman
