Ever dream of being your own boss? Apparently a lot of women are not only dreaming, but doing. There are now 8.6 million women-owned new businesses in the United States, which is up 59 percent over the past decade and a half. But do those new ventures have real staying power? Experts say it's important to know the top mistakes entrepreneurs make and how to avoid them.
Nancy Hans is in constant motion as she churns out homemade goodies using only organic ingredients.
This former systems analyst combined a love of cooking with her quest to provide healthy treats for her two dogs. After two years, the “Woof-Stop Barkery,” is now breaking even financially.
“Everyone these days is, thankfully getting more educated on food labeling,” Hans said.
She’s already beaten the “new business odds.” Twenty-five percent of all start-ups are out of business after one year and 54 percent are gone after five.
Rebecca Harris knows that harsh reality all too well. She calls herself a serial entrepreneur. She’s been a no-cholesterol cookie maker, and developed the “Nettle Not”— a huge net that protects ocean swimmers from jellyfish. Both ventures went by the wayside.
“I did not write business plans for those companies,” said Harris, who now works at Chatham University’s Center for Women’s Entrepreneurship.
Lacking a clear focus is one of the top reasons new businesses fail. Also, don’t under estimate your startup costs. Calculate how much you’ll need to keep running for three years and then add 50 percent to it.
Harris advises women to do only what you absolutely love. That was finally the key to her’ success with a publishing company she founded twenty years ago. She started the business in her basement and sold it for a large profit after hitting the one million dollar mark.
Another tip from the experts is to not hire close friends; 75 percent of the time, it doesn’t work out. And don’t underestimate the time commitment, it can lead to burnout. Another piece of advice: don’t fear failure. In fact, be prepared for it, as you’ll have many failures along with your one big success.
Women start businesses at twice the national average, and as women become the majority of the world’s population, these numbers will continue to grow. Since 2007, businesses controlled or founded by women have a higher death rate than businesses controlled by men, but also expand at a quicker rate than their male counterparts. (Sources:forbes.com, nwbc.gov)
Resources: Women CEOs, business leaders, and entrepreneurs have a variety of help available to them from government and private organizations.
- The National Women’s Business Council (nwbc.gov): This government agency provides women with information on starting, maintaining, and growing their business. They also provide information on loans women businesses can apply for.
- SCORE (score.org): This organization provides a variety of resources for all business leaders, and have a special designation for women leaders. They can match entrepreneurs with business mentors to help them achieve their business goals.
- Office of Women’s Business (SBA.gov): Part of the U.S. Small Business Administration, this government office opened in 1979 by executive order. Their mission is to help women entrepreneurs overcome social and financial barriers.