Sex And The Entrepreneur

Is gender really that important when it comes to leading a small business?

by Nicole D. Smith

June 13, 2008

M en and women are different. They always have been, and always will be. Men like tools. Women like shoes. Men can never get enough of Indiana Jones. Women are crazy for Carrie and her Sex and the City pals. And according to Elizabeth Gordon, founder and CEO of Flourishing Business, a management-consulting firm for entrepreneurs, when it comes to the methods of running a business, there's no exception to this presumed rule of nature.

"Women tend to have a much smaller vision," Gordon says, reflecting back on her 10 years of providing management consulting for a Fortune 500 company. "Most male clients are talking to investors, getting outside funding, and making plans to sell their companies so they could take it big; men want to take it national or take it global. [Often times] women clients are just trying to make a living."

Kathy Harris, senior vice president and partner of Noro-Moseley Partners, agrees. "If it appears that [women] have a smaller vision, it may be that they are looking at it from a narrower viewpoint of how to fund their businesses," she says. "For example, they might only try to grow with bank debt, an SBA loan (loan programs for small businesses) or something that's more conventional versus thinking about private equity."

  With an estimated 7.7 million women-owned firms in the U.S. (female-business enterprises generate $1.1 trillion in sales), Gordon sees the potential for these businesses to have the same profitable successes as those headed up by a man. In her latest woman-targeted entrepreneurial book, The Chic Entrepreneur, Gordon says she knows what strengths and weaknesses women possess and need to have a successful, independently run business.


And having been an entrepreneur herself for more than three years, Gordon believes that before all else, women have to rid themselves of several major weaknesses, including an unwillingness to aggressively talk about money. "[Women] tend to be more hesitant about the financial side of the business," says Gordon. "I've heard way too many women say, ‘I don't talk numbers. That just confuses me.' ... You cannot go into business with that kind of [perspective]."

  Harris says she detects the same hesitation when women come to Noro-Moseley Partners and discuss possibilities for venture capital with her company. "I think [women] overall may be more conservative in the way they want to grow their businesses," she says. "Entrepreneurs tend to be risk takers first or they wouldn't be putting everything on the line. And sometimes that's a concept that harder for women to grasp."


Statistics suggest that both Gordon and Harris' assessment could be true. Three percent all of all women-owned firms have revenues of $1 million or more versus six percent of all men-owned businesses.

"[Women] have to invest time to learn how to read financial statements, what numbers really mean and how to make them work," she says. "Financials are the language of business, so women need to get comfortable with the financial piece."

Gordon emphatically says women shouldn't be bashful about asking for money when there's a solid idea coupled with a solid business plan. "[Women] don't tend to get outside funding. They try to grow organically. [This will cause] you to grow at a much slower rate. If you have a plan, a big vision and outside funding, you will grow your business in a shorter time period."

Another Achilles' heel Gordon distinguishes for women is the tendency to want to be involved in all aspects of their businesses, and not outsourcing as much as they should. In fact, 81 percent of women-owned firms do not have employees. "Women run the household.  ... [And when it comes to our business], we are still trying to do everything," says Gordon. "We don't value our time as much as men do. Women need to concentrate on the bigger picture. They should be out there selling, meeting people and not typing up a letter."

  But there also are advantages to being a woman in business for herself. Women are naturally relationship builders, Gordon says, and women tend to connect to people on a personal level. Studies show women owners who plan to sell their companies are more concerned than their male counterparts about the buyer's identity, personality and background (72 percent of women ask about these topics versus 39 percent of men). They are more concerned about what happens to the employees after the sale.


Even when handling money, more than two-thirds of women-business owners choose financial products and services based on their relationship and experience with a lender. "Women really want to understand what's going on in the minds of their customers," says Gordon. "And that's the essence of a good salesperson."
 
In addition, Harris stresses that being a woman can actually help you stand out among a group of men – something she says can work to your advantage when it's time to network for your business. After all, she says, the real networking takes place after hours. "I think that women can take advantage of [that fact that there's so few of us] by not being shy, and making sure they meet everybody in the room."

  With women representing more than one third of all people involved in entrepreneurial activity, and making 80 percent all of household buying decisions, Gordon says the Manolo Blahnik's in the business world are here to stay. She believes that a woman is naturally ready for the business arena and likens a woman running her business to wearing a pair of high heels, stressing it's fine to have a different management style than men.


"If you think about what high heels do for you, they make you look better. They make you feel more powerful and make you look better in the eyes of others. And that's what you want to do with your business," says Gordon. "You want to make your business more attractive to other people, take it up and show it off. Women having that sense of style gives us a natural marketing edge [to] build a real, profitable business."