The Center for Women’s Business Research reports that 10.1 million firms are owned by women and one in five firms with revenue of $1 million or more is woman-owned.
Women are starting businesses at a rapid rate, and many have targeted a goal of $1 million in revenue. Marsha Firestone, Ph.D., president and founder of Women Presidents’ Organization, states that only 3 percent of all women-owned businesses generate $1 million plus in annual revenues. The good news is that the million plus firms are growing faster than the smaller firms.
There are many challenges in growing sales to a million, but over the years I have determined five important components to help in this process:
The business model needs to support large growth. A small catering business can only grow in the region. A small business producing and selling a sewn product is limited in size without employees. The expansion of the service or the product needs to be possible beyond the use of an owner’s time.
Women entrepreneurs need to have a passion for what they do. It is hard work and if there is no passion it is easy to decide that now is not the right time, or it interferes with doing something else. With passion the hard work seems worthwhile.
Being the best at what you do is essential. It provides the substance upon which the business is built. Pet rocks are a fad. Women owners want to build a solid company that has longevity and can be sold in the future.
There needs to be a market for the product or service. Those customers need to be ready to spend dollars to buy what you offer. And they need to be willing to spend a higher amount because women owners tend to deliver very high quality services.
Owners need to have a business background or be willing to take the classes and get the help needed to build a business. For example many services could be provided within a corporation and done quite well. But if you are going to do that work independently then you need to wrap a business around the service.
Looking at these five components, scalable is top on the list. To get to the million in revenue requires a way to replicate each sale. Providing a service by yourself or producing a product without employees can only be grown to the size that you can handle alone. With added growth you will run out of time at the end of the day.
Traditional ways to scale a business involve hiring employees to deliver services or manufacture products. Acquisition will provide fast growth. Adding new services/products or growing in new geographic areas are other traditional ways. Special ways to scale a business include offering a business opportunity, franchise, dealer/distributor, licensing and others.
New ways to grow a scalable business can be very exciting and also appealing to many women owners who choose to grow without employees. These include Internet companies such as member sites, affiliate sales, training programs or a blog with high traffic and sponsors. Sometimes a business is a match for training and certification services, private label, original characters or strategic alliances. I see more and more women starting a product design, marketing and sales company. They outsource manufacturing and warehousing.
Building a million-dollar business is difficult, but extremely worthwhile. Picture you are building an organization that is scalable, fits your passion, you are really good at it, customers are ready to buy, and you have learned to wrap a business around it. This great business can be sold for retirement or passed to a new generation.
Doing difficult things is worth the effort. You will find yourself in a small category of people, working on difficult goals that the others didn’t even try. You will work really hard to accomplish your goals because they are important and significant. If this sounds like you, I encourage you to go for it!
Norma J. Rist CEO Consulting, Inc. is a company that provides strategic growth and profitability solutions. She has a program to help women owners build million-dollar businesses in 24 months. Norma can be reached at email@example.com.