As women define what having it all means to them, many are choosing entrepreneurship as the path that works for them. According to American Express OPEN’s State of Women-Owned Businesses Report, there are more than 8.3 million women-owned businesses in the United States, representing approximately $1.3 trillion in revenue and employing almost 7.7 million people. The growth of these businesses has outpaced all but the largest publicly traded companies. The number of women-owned businesses increased 54 percent between 1997 and 2012, a time when the number of total businesses in the United States increased by only 37 percent. And women CEOs aren’t just excelling in stereotypical women-friendly industries; in the construction industry, for example, 13 percent of women-owned firms are generating more than $500,000 per year.
Another report, this one from the Guardian Life Small Business Research Institute, projects that much of the country’s future job growth will be generated by women-owned small businesses. The report states that by 2018 female business owners will be responsible for creating more than five million new jobs, more than half of the jobs all small business are expected to generate.
Are Women-Led Businesses Transformational?
Interestingly, the report predicts the rise in women-owned businesses will transform the workplace because women business owners “create their own businesses for a variety of reasons, but the most common theme is their dissatisfaction with the corporate track.”
For many women, that is certainly the case. As one entrepreneur said, “Middle corporate America absolutely destroys. It’s full of the Willy Lomans of the world,” a reference to the character from Death of a Salesman.
Barb Heffner certainly tried to change the dynamic for women when she started her firm. “I think a lot of women run their own businesses to call the shots,” says Heffner. Heffner started the business when her son was six, and by the time he was twelve she wanted more time at home. She let her business partners know she was not going to take on any more clients. “You’re going to make a little less salary, if you’re not carrying as much revenue, but there’s flexibility. But it is a buck-stops-here issue. I had an uncle who ran a kitchen cabinet business. He said, ‘Never run your own business.’ There are a lot of tradeoffs. The thing I was able to do, when my son was twelve, and I’m incredibly grateful to my partners, I started taking two months off in the summer. They knew if there was some big thing that came up I’d be there, but for the most part, I was able to get the time. I did the summer hiatus for my last seven years at the firm, having varying levels of responsibility from year to year with varying levels of success.” Barb says some summers she spent more time online working than she had planned.
Barb got to work early and left the office at five. As working from home became more acceptable to clients, she took advantage of the flexibility. And like so many working mothers, she was back online after her son went to bed. “The key to making all of this work is marrying someone really supportive,” she adds. “Not everyone is that lucky.”
Understanding that point, Barb worked hard to make her firm a place where women could flourish. “As female managers, we have to give women some latitude out of sheer compassion. After my son was in high school and more independent, I tried to make it easier on the women we employed. I’d say to them, ‘I mean it, really. What can I do to help you?’ You have to persuade that employee that you want to help. I had this wonderful colleague. She had no kids, she was just compassionate, and when my son was sick, she’d say, ‘What can I take off your plate? You need to go home.’”
Barb says the women who helped her along the way knew she would do the same for them. “I’d say, ‘Go. Call me from the car, tell me what you need to get done.’”
The Camaraderie of the Working Sisterhood
Juli, a divorced mother of two, confirms that Barb created a positive environment; she worked for Barb for many years, including through her divorce. “We separated when my youngest was ten months old. I was in the throes of my first big professional promotion. I knew I really had to make a run at this financially, because I wasn’t going to have as much financial support from my husband. Luckily, I had a good support system of family, friends, and neighbors. I knew there was a strong camaraderie of the working mother sisterhood.
“Mentorships are really important too. I was [there] not because I loved the agency work all the time or the clients but because Barb was so great and my colleagues were so supportive—I could race out to a 3:00 p.m. doctor’s appointment. When Elliot was born, I was working four tens. I had one day off, usually Fridays.
“I’m really grateful for that. Ten years ago there wasn’t quite the same work-from-home flexibility, but I started working Wednesdays from home. It was a huge relief to have one day to not rush in the morning.”
Business Ownership As a Path to Flexibility
While some women start companies to build a new culture, others are simply seeking a more manageable work–life fit. Nadia McKay is a mother and former corporate type turned entrepreneur. She is the president of Mom Corps Boston, a professional staffing company that specializes in flexible workplace solutions. Nadia tells me that after she had her first child, she realized the career path she was on was no longer what she wanted. “It’s not how I viewed being a mother. I was lucky to have a mentor–sponsor who architected a new role for me. It was a great job that suited my personal strengths. I did it for six years with four different bosses.”
Nadia eventually negotiated a four-day-a-week schedule, with one day working from home. “At this point I had two young boys. The job was great on paper but I was still working fifty-five hours a week and getting paid 80 percent.”
Then Nadia experienced her perfect storm. “It was the first day of kindergarten. My camera broke. I got a call from work there would be layoffs. At the end of the day my nanny quit. I went from fearing for my job to my husband and I looking at each other and asking, is this what we wanted. I wasn’t the mother I wanted to be. I wasn’t the worker I wanted to be. I wasn’t the wife I wanted to be.
“I took a huge leap of faith—I was the primary breadwinner—and met with a financial planner. We went through a painful exercise but I figured out I could take a couple of years and go back part time, and so I raised my hand for a package.”
Nadia’s plan was to take at least a year and a half off, but after six months she got a call from a woman and it changed her plan.
“She told me about Mom Corps and it just resonated,” Nadia says. “I had to go do it. It was hard because I really wanted to do this but I also wanted to take time off.” So Nadia started out working ten hours a week sourcing candidates. “In the end, I bought a franchise and never looked back. It’s been phenomenal. I’m working as hard as I ever have but I have the flexibility to do it on my own terms.”
She says she works the same number of hours she did at her corporate job but she is able to take her children to school and her mother to appointments. “That one shift in having the flex has made the total difference. I’m doing better financially. I’m there when [the kids] get home from school. I definitely have long days, no doubt about it.”
Even as her own boss, Nadia struggles to manage all parts of her life. “Sometimes I get super, super busy and hire a babysitter.” She cooks dinner every night and works while her husband cleans up, and she has cut out television and reading.
One of the things Nadia definitely does not miss about corporate America is what I call forced fun, those after-work events designed to build team and culture. For many working mothers, these events are just another obligation, one more thing they need to balance, one more night away from their families. “I’d get dinged on performance reviews for not going to team birthday parties,” says Nadia. “I had an infant at home.”
Pursuing a Passion As CEO
Work–life balance was not a key motivator for Kyra, who founded two businesses. Passion was. Kyra and her husband co-own an architectural business. “When our children were young we decided that in order to have a more flexible schedule, we would open our own architecture design firm,” she tells me. “We were both trained as architects but I leaned more toward interior design, which lends itself to a short attention span. It gave me the time I wanted with my children and allowed me to do something I love. I really enjoy working with people and the gratification of seeing a completed project.”
Soon Kyra was looking for a way to get more involved with her community. As an avid runner, she helped organize a road race intended to support a local charity that supports women and girls. A few years into the race she started selling hats and T-shirts emblazoned with the words “Women Run,” and realized the idea was too powerful to keep for just one road race. She now designs activewear and lifestyle gear for women who are busy running their lives, and donates a portion of the sales to charities that support women and girls.
“Women Run is growing and so is my interior design business,” Kyra says. “I love design; I always felt like I could do more and help more people with my design skills and I am making that a reality.”
Kyra is clear that she wants Women Run to inspire others and to make a profit. “I was raised with a very supportive family that instilled in me a great deal of self-esteem. I have daughters and I want them to feel the same self-confidence. Originally the model of the business was going to be nonprofit but I realized it needed to have a double bottom line, helping me as well as helping others. Women tend to lean toward the nonprofit world and volunteer work, which is very important, but more and more women are starting to ask for what they want, for the job they want and deserve and the salary they want and deserve. Women Run is a for-profit that has a nonprofit component—it’s purchasing with a purpose.”
Managing the new venture, the architectural firm, and her family is a challenge for Kyra. “We used to have a housekeeper, which was fantastic. But I took that money for the new business. I’ve had to let go. With my first child I thought I was Martha Stewart. Friday nights I was home cleaning, and that’s not what I want to do. I want to socialize. And my kids won’t die. And then every once in while I pull a Mommie Dearest moment and scream at everyone.”
Like Kyra, Elizabeth, who was raised by very traditional parents, is as focused on her family situation as she is her business. Elizabeth co-owns a branding firm in Manhattan and has fifteen employees. “I’ve always been more of the aggressive career-focused person,” she says. “I’m very lucky that I have a very evolved husband who is very nurturing.” The couple has a toddler and her husband has an adult son. “I really wanted to have a child when his son was turning eighteen. When our daughter was born [my husband] was working for a corporate law firm marketing department.”
Elizabeth says that, as their daughter started to outgrow the nanny, her husband was becoming disenchanted with work and wanted to freelance, so he quit his full-time gig. “He’s a very natural father and caregiver, and I love it because I feel like one of the parents is home. House wise, all I do is laundry. He does a lot of the cooking; he’s a better cook. We have someone who cleans every two weeks.”
Elizabeth says she and her husband frequently discuss their family arrangement. “I check in and make sure he’s happy with it.”
Whether women are starting their own companies to make money, find work–life balance and flexibility, or pursue a personal passion, they are inevitably growing the working sisterhood Barb mentioned. And that sisterhood is going to yield more options and new opportunities for even more women.
Where’s the Funding for Women?
While we’re seeing a significant rise in woman-owned businesses, women still face several obstacles to creating and sustaining their own companies, and managing their family life is only one of them. One of the major challenges is a lack of access to funding. Women make up less than 10 percent of venture capitalists at the top firms, according to a report titled Gatekeepers of Venture Growth: The Role and Participation of Women in the Venture Capital Industry. The Diana Project, an organization that raises awareness of women business owners, produced the report. The report also reveals that women entrepreneurs receive just 4 to 9 percent of all venture funds in the United States.
The lack of women in the venture business is part of the problem. People do business with people who look, walk, and talk like them, and so the mostly white, male investors tend to fund white, male entrepreneurs. The gender bias showed up in a very visible way when, in April 2011, angel investor Paige Craig published an article in Business Insider titled, “VC CONFESSION: I Have Doubts Once I Think of Women Founders Having Kids and Being Distracted from Work.” In the piece he shared a concern he had about a woman who had pitched him for start-up money: “A pregnant founder/CEO is going to fail her company,” he wrote. “I’m thinking how in the hell is this founder going to lead a team, build a company and change the world for these businesses carrying a kid around for the next few months and then caring for the kids after. I can’t say I personally know anything about it but birthing & raising kids seems like the toughest job around. And now I have a founder who has to be a CEO and a mother.”
Craig says he shared his thoughts publicly because he recognized how much talent women represented and wanted to raise awareness of women in the workplace. Jessica Jackley, the entrepreneur in question and cofounder of ProFounder, wrote in a response, “I’ve never heard someone ask the same of a Founder/CEO/Dad, worrying about a slightly different dirty little thought: ‘An expectant father/CEO will fail his company.’ The idea that mothers are the de facto ‘foundation parents’ to a new baby (or two) perpetuates the stereotypes and structures that make it more difficult for anyone, male or female, to balance work and family in the first place.”
Ultimately, Craig decided to invest in Jackley and ProFounder.
Lifting the Veil on Female Entrepreneurs
In order to balance the gender gap in funding, we need to balance the gender gap in the venture capital industry. Despite a business climate that seems stacked against them, women need to ask for funding more frequently than they may have in the past. Funders need to recognize inherent biases built into the process and work to overcome them, and the media should seek to promote women founders more prominently. We are so much more likely to hear about Jack Dorsey, founder of Twitter, or Andrew Mason, founder of Groupon, than we are to hear about Lisa Stone, Jory Des Jardins, and Elisa Camahort Page, cofounders of BlogHer, or Rashmi Sinha, founder of SlideShare.
We can support the creation of more female entrepreneurs by encouraging women to pursue careers in the STEM—science, technology, engineering, and math—industries too. Despite the fact that women represent almost half of the workforce, they represent less than 25 percent of STEM workers, according to the Census Bureau’s American Community Survey. Not only do jobs in these industries tend to have higher than average salaries, technology and engineering backgrounds are in high demand in the start-up community. I went to a lecture given by Sheryl Sandberg, Facebook’s chief operating officer and author of Lean In: Women, Work and the Will to Lead, and she shared advice for parents of daughters. She said to enroll our girls in tech camp and buy them iPads to encourage their interest in technology-related careers.