Subscribe to Blog ContentMargaret Heffernan's How She Does It shows that successful women entrepreneurs have one thing in common: money isn't the main driver for running their business. Many do it for the passion. However, this doesn't mean they shun spreadsheets and ignore the numbers. They do the opposite -- women owners know their numbers as well as any other executive.
The fact that money isn't everything is one of the many factors shared by successful women entrepreneurs. According to Heffernan, women own or control 40% of American business AND their businesses grew twice as fast as other American companies did.
Yet, venture capitalists often overlook women-owned or controlled businesses. The 75% of women who manage to receive financing from a VC are those who have previously owned a successful business. But know that this represents 75% of who actually receive VC funding. Most don't.
Heffernan says "Nearly half of VC-funded companies fail, whether counted by numbers or dollars invested." The fact remains that women-controlled business two as likely to stay in business.
They also value profits more than revenue. To be clear, Investopedia defines profits as "A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity." Companies calculate profits like this:
Profit = Total Revenue - Total Expenses
The definition of revenue according to Investopedia is "Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold."
Of course, everyone wants to make a profit. But what these women do with their profits differ from many companies. They put it right back into the company instead of their own wallets. In explaining the importance of profits, Heffernan writes, "They fund innovation, they buy time, and they make a company sustainable."
Women-controlled companies treat profits like many use working capital. They use it to add a new building, make improvements to their products, and create new business units to triple revenue. One woman put a hiring freeze in place to give her company time to move handwritten orders into computers and to get the new system online.
And another thing these businesses have in common -- they value their breaks and vacation time. One owner takes a month off in the summer, another works four days a week in the summer, and another closes the company for the week of Fourth of July. Ideas don't come to people who work themselves to the bone. Our brains need rest or else we decrease the blood flow to our brains.
Women-owned businesses don't measure success in terms of money. They define success based on growth, building a strong company culture, gaining credibility, creating sustainability, and providing more benefits to employees.
Tom Peters regularly talks about 10 key points that businesses better pay attention to when planning their customers' experience:
10 UNASSAILABLE REASONS WOMEN RULE
- Women make [all] the financial decisions.
- Women control [all] the wealth.
- Women [substantially] outlive men.
- Women start most of the new businesses.
- Women’s work force participation rates have soared worldwide.
- Women are closing in on “same pay for same job.”
- Women are penetrating senior ranks rapidly [even if the pace is slow for the corner office per se].
- Women’s leadership strengths are exceptionally well aligned with new organizational effectiveness imperatives.
- Women are better salespersons than men.
- Women buy [almost] everything—commercial as well as consumer goods.
- So what exactly is the point of men?
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