Insights from the National Women’s Business Council on the Future of Women-Owned Businesses  

There are over 11 million women-owned businesses in the United States: 38.2% of all privately held businesses, to be exact, and they are expanding at a rate of 1,200 new firms every day.  This impressive growth is great news for female founders and small business owners. But according to the National Women’s Business Council (NWBC), an advocate and advisory council for women-owned businesses, it’s not just women launching small businesses that’s important; it’s also the long-term sustainability of those businesses, a task that hinges upon female entrepreneurs obtaining ongoing advice, support and financial backing to allow their  businesses to blossom and prosper.

Enter the National Women’s Business Council. The NWBC amplifies the voices of women in business across the United States. Through a series of quarterly meetings with women and local governments—this year in Detroit, Austin, Atlanta and Washington, D.C.—they identify the barriers to the success of women-owned businesses, research issues affecting women business owners, and offer advice on ways to overcome these challenges. The fifteen-member group, a non-partisan federal advisory council created in 1988 to provide advice and counsel to the president, Congress, and the U.S. Small Business Administration on women-owned business topics, is comprised of eight female business owners, six representatives from a collection of national women’s business organizations, and a presidentially-appointed chairperson.

Three council members, Carla Harris, NWBC Chair, Kimberly Blackwell and Sherry Deutschmann, shared their professional insights and spoke about some of the biggest challenges faced by female business owners.

Meet Three NWBC Council Members

Carla Harris, the Chair of the National Women’s Business Council, was appointed by President Obama. In her “day job,” she is Vice Chairman of Wealth Management and Senior Client Advisor at Morgan Stanley. She’s well known as a global investment professional and was named by Fortune magazine as one of the 50 Most Powerful Black Executives in Corporate America.

Of her tenure at Morgan Stanley, which began after Harris graduated from Harvard Business School, she says that she “never imagined I would be here almost 30 years.” Harris calls her career “intrapreneurial,” explaining that instead of building a business from scratch as an entrepreneur, she helped build and expand at Morgan Stanley. She also noted of her longevity at the company that there has always been “something new to do” there, allowing her to continually learn and grow.

Harris shared her advice on the latter, saying that the key is finding mentors, male or female, choose “people who can speak the truth to you, put up the mirror and help you see what you are doing.” Bottom line: While everyone needs “rah rah” sessions periodically, it’s important to have advisors whom you can trust to share career guidance and unvarnished input on professional development.

Sherry Stewart Deutschmann is the CEO and Founder of LetterLogic, a company with $40 million in annual sales that creates and mails healthcare paperwork such as patient/HIPAA statements. Deutschmann is still a bit surprised that she was asked to join NWBC. “I’m not the typical entrepreneur; I don’t have a college education. I’m a seat-of-my-pants, common-sense person!” With a nod to her bootstrapping background, she noted “It’s important for women to realize that if I can do it, anybody can.”

Long before LetterLogic, Deutschmann left North Carolina for Nashville, post-divorce, with a three-year-old daughter and only a couple hundred dollars in her pocket. Seeking a large enough income to support herself and her daughter, she went into sales. At first she sold cars, and then transitioned into sales in the healthcare industry. When Deutschmann approached her boss in the healthcare job, offering to help him operate the business more efficiently, he patted her on the hand and said, “You don’t know anything about business, just go sell another account.”

“He was right, I didn’t — but I thought, ‘I can do it better than you guys,’” she notes.  And pretty soon, she did sell other accounts; then, influenced by the book, Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success, created her own company, Nashville-based LetterLogic (where, incidentally, that former boss became a client). It was founded specifically with the aim of giving everyone a stake in her company’s success, and worker benefits there are are eye-catching.

Now her mission is to prove to the world that this is a good business model: the idea that if you take care of the employees, the bottom line will take care of itself. As indeed it has: above and beyond its multi-million dollar sales and satisfied staff, the company also has no debt.

Kimberly Blackwell, founder and CEO of Progressive Marketing and Management (PMM), a branding/promotional products business, started her company from a 600 sq. ft. one-bedroom apartment as a twentysomething who “didn’t know much,” she said. Her original goal was to earn additional income on the side as a consultant. Today, she manages a team that scales up to nearly 40 people with 25 full-time consultants, plus additional episodic employees.

It was precisely Blackwell’s experience operating her business in the beginning as “a side hustle to my main hustle” that now allows her to relate to women trying to decide what kind of business they want. She notes that women can launch a successful business on the side without leaving a full-time role as an employee. And not every business owner is seeking a million dollar business; some people just want a lifestyle business that adapts to their desire for travel or family.

One important aspect of her journey? “Looking back, I was totally unaware of the resources available!” Organizations like NWBC could have helped her expand earlier in her career, she says. And she noted that it’s essential that women share their knowledge to help other women get there faster.

Five Priorities for NWBC to Support Women-Owned Businesses  

1. Access to Capital

All three women name access to capital as one of the biggest challenges to women-owned businesses.

When Deutschmann started LetterLogic, no one would loan her money for equipment, and leasing companies didn’t take her seriously, because her production facility was her basement and meetings were conducted in her living room. Solution? Deutschmann used her retirement savings and paid for refurbished equipment with cash.

She surmises that another reason why women do not scale their businesses faster could be their aversion to debt. That aversion sometimes stems from a lack of understanding, so the GROW Her Business platform (see below), Deutschmann notes, explains the differences in types of capital available, such as angel funding, venture capital and crowdsourcing.

Blackwell, too, is excited about the different ways that women can bring capital into their businesses. Crowdfunding, friends and family, plus Kickstarter “have become great points of capital infusion.” The number of competitions available for businesses to obtain prize/seed money is exciting as well, she said, because these are avenues previously unavailable to women entrepreneurs. Even more help: the NWBC has prepared a downloadable report to explain barriers and solutions re: women-owned businesses obtaining capital.

Harris also noted that the NWBC is promoting legislation to encourage alternate capital sources like crowdfunding or peer-to-peer funding. The organization has also recommended tax incentives for corporations to encourage investing in women-owned businesses.

2. Resources for Growth

When and how should you expand your business? According to NWBC’s most recent survey, in 2012, 89.4 percent of women-owned businesses have only one employee, the owner. But, as Deutschmann notes, “The best way you can impact your community, and our nation, is via larger businesses,” and advises women owners to learn to delegate responsibility early.  This frees them up to think bigger and spend less time working in the business and more time working on building the business.

Finding employees can be scary; as Deutschmann said, “I’ve made as many bad hiring decisions than I’ve made good.” But sometimes, she explained, you have to back off and trust the person to do their job. “They won’t do it the way you’ll do it, but they’ll probably do it better.” Blackwell has managed the growth of her own company by hiring freelance employees to assist during peak times to meet client needs. The practice allows her “to tap into great expertise and talent by using a solopreneur” while managing her overhead.

Harris reported that during quarterly meetings, the council has learned of local communities and state governments that are promoting the growth of women’s businesses. That’s exciting, since one of NWBC’s goals is to encourage government agencies to help support, sustain and expand women-owned businesses. Some cities, including Atlanta, have created positions, such as a Chief Equity Officer, whose primary role is to increase opportunities to do business with the city. Harris added that the southeastern states have been especially successful in creating climates conducive to women in business.

She further explained that on the federal level, government plays a huge role in helping these businesses grow: the goal of the NWBC and government was for the latter to award at least 5% of federal contracts to women-owned businesses. The government reached that benchmark, but, as Harris said, these contracts have a “huge multiplier effect” in the economy, so NWBC is committed to pushing for an even larger share of contracts to women’s businesses.

3. Support to Scale

One of the biggest untapped opportunities for women-owned businesses is to be a supplier to large corporations. Too often, women are unaware of these opportunities and they lack one of two things: the connections/access to bid, and the ability to scale to guarantee performance of those contracts.

Blackwell has experienced that at PMM.  When trying to obtain new business in the private sector, she was told, “You do offer a great professional service, but I don’t know that you’re ready to do business with a Fortune 50 global organization.” In other words, she needed to have greater access to adequate resources to meet the potential demand, but scaling too quickly just based on one wished-for contract is unlikely at best, and risky at worst.

However, while it may be impossible for a woman to scale her business overnight to meet the requirements of one lucrative contract, she can (eventually) make it happen through partnerships and joint ventures. That same company can then approach the Fortune 50 company and say, “We have formed partnerships with businesses A, B and C to meet x, y, z needs for this business.” Then, as Blackwell said, “That 40-person firm has then become a 300-person firm, and now the Fortune 50 company may be ready to do business with us.”

4. Access to Information

All of this insight and hard work, however, means nothing if crucial information and resources aren’t easily accessible for women, so the NWBC spent fiscal 2015 creating a searchable, online platform called  GROW Her Business, simplifying access to valuable information to go from start-up to scale-up.

Blackwell said that, speaking from experience, that journey from it’s-just-a-dream to profit-making business is full of challenges that change at each stage: start-up capital issues soon evolve into questions on changes in tax status, while recruitment issues morph into retention issues. So she’s thrilled that the new platform offers something for every phase, with scale-up programs, partnership opportunities, lending programs, and even ongoing local and regional events and resources all listed.

5. Getting the Word Out

To further the cause for women-owned businesses, Harris, Blackwell and Deutschmann encourage women to participate. As Blackwell said, “This is not a spectator sport.” The more women who actively support women-owned businesses and reach down to help the next woman up, the faster we create a culture shift.

Interested women may participate in quarterly virtual public meetings during which they can listen to discussions of issues affecting women-owned businesses and participate in a Q & A. Additionally, women business owners can share information on the GROW Her Business platform, including suggesting resources for women in their geographic area.  Get involved!