Women-Owned Businesses — Working To Close The Gender Gap

Business ladyWe have all heard the names of some of the women executives on Fortune’s 500 list, as some of them are at the helm of companies whose products or services, such as Mondelez, GM, IBM and Yahoo!, we have used at least once or use regularly. They are, however, just the tip of an iceberg of female entrepreneurship. It may come as a surprise, but as of last year, there were around 8.6 million businesses owned by women in the US, employing 7.8 million people and making a total contribution to the economy of $1.3 trillion, according to figures released in the “2013 State of Women-Owned Businesses” report, commissioned by American Express OPEN. An exciting highlight of the report is the growth trend for female-owned businesses, which has been stronger than the average for the country over the last 16 years. What’s even more encouraging is the fact that, apart from large public companies, predominantly women-owned private businesses were the only ones hiring more during the period of the financial crisis. So, it looks like women are well suited for doing business successfully in various industries, and here are 10 blooming companies that made up the top 10 fastest-growing women-led businesses for 2013, according to the Women Presidents’ Organization’s (WPO) sixth annual ranking of the 50 fastest-growing female-owned or led businesses in North America, based on revenue growth.

First on this list is Happy Family, a New York-based company that makes packaged organic meals and snacks for babies through to adults. Founded and currently headed by chief executive Shazi Visram, Happy Family posted revenues of $62.3 million for 2012. At the heart of the company’s philosophy is organic nutrition but it also boasts a firm eco-friendly attitude, using containers from partially recycled materials and making them 100% recyclable whenever possible, and using fresh produce from family farms dedicated to organic farming. Resource sustainability and healthy eating is the future and Happy Family is making the best of it, it seems.

Second from the top in the fastest-growing women-led businesses ranking comes Strategic Communications, based in Louisville, Kentucky, and headed by Kathy Mills. The firm, which was set up in 1994, provides tech solutions for both the private sector and government agencies, and booked gross sales of $42 million for 2012, a whopping 80% increase from two years earlier. Strategic Communications’ personnel tripled in the same period, which granted it the second place in the fastest-growing business ranking. In the same year, Strategic Communications was ranked seventh on the Tech 200 list of technology startups with the highest growth in revenue between 2009 and 2011, compiled by information services provider Lead411.

Next comes BrightStar, a medical personnel staffing firm which was founded in 2002 in Gurnee, Illinois. With chief executive and co-founder Shelly Sun at the helm, BrightStar grossed $212 million in revenues for 2012. The company now has more than 250 locations across the United States and provides home care and childcare services as well as medical staffing for healthcare establishments. In view of forecasts that ambulatory health care employment will expand by 45.4% until 2022, family care employment will grow by 54.3%, and homecare employment will expand by 59.7% in the same period (Business Insider, 2013), it’s safe to say that BrightStar has a very good chance of flourishing even more in future.

The fourth entry on the top 10 list is also doing business in the field of healthcare but with a focus on information technology. Intellect Resources is based in North Carolina and reported revenues of $30 million for 2012, a stunning increase from $1.5 million for 2010. Led by Tiffany Crenshaw, who founded the company in 1999 after an unpleasant experience with aggressive recruiters, the firm provides recruitment, hiring and consulting services for the healthcare IT industry. It’s safe to say that Intellect Resources’ development parallels and reflects the increased demand for flexible IT and recruitment solutions in the healthcare sector, in view of its forecast growth (see above).

Completing the top five on the list is another consulting services provider, Cenergy International Services, based in Houston, Texas. The firm was founded by its current CEO June Ressler and specializes in consulting for the oil and gas industry — another sector of the economy that has been growing in the past few years. Cenergy offers services in a range of areas, from safety and inspection to logistics, and its staff works around the globe. Ressler is a member of the National Petroleum Council, an advisory body to the U.S. President on matters related to energy. For 2012, Cenergy booked close to $250 million in gross sales.

The top 10 list is completed by another five women-founded and led companies coming from a variety of industries. At number six is Rose International, a Montana-based IT consulting firm run by Sue Bhatia, which booked sales of $360 million for 2012, a 50% increase from 2010. Next comes Boost Technologies from Ohio, led by Anita Emoff, which specializes in employee wellness, recognition and awarding services. The firm grossed revenues of $17 million in 2012, from below $1 million two years earlier. Eighth is Suite K Value Added Services, based in new Jersey and led by founder Kathleen Croddick. Suite K works in a niche more traditionally associated with women: fragrances and cosmetics. It booked $13 million in revenue for 2012, a whopping 150% increase from 2010. Second to last is Lanmark Technology, another IT sector company, which provides IT and administrative support to both the government and private sector. Led by Lani Hey — who was recently included in Fortune’s 40 under 40 list alongside Mark Zuckerberg and Marissa Mayer — Virginia-based Lanmark Technology reported gross sales of $35 million for 2012. The top ten is completed by Artech Information Systems, based in New Jersey and run by Ranjini Poddar. The largest woman-owned IT recruitment company in the US (WPO) booked gross revenues of almost $350 million for 2012.

It is evident from this list that women can succeed in fields not typically associated with the gender and, what’s more, they can make it big in areas that have been traditionally male territory, such as the oil and gas industry, and IT. Be that as it may, a new study from Cornell University has suggested that there are a number of industries where women-led enterprises have better chances of long-term survival compared to sector players led by men. The researchers outlined four industry areas where their findings revealed consistently better survival chances for women-owned companies: educational services and dance studios, apparel, gifts and, perhaps surprisingly, alcohol sales and service. This last industry sector includes eateries and alcohol-serving establishments, which were until now considered a typical male-dominated area of business.

At the same time, according to the “2013 State of Women-Owned Businesses” report, although the process of diversification into a variety of industries continues for women-led enterprises, statistically speaking the health care and social assistance sector is dominated by such companies, which constitute 53% of the total number of enterprises there. In the US business sector as a whole, women-owned enterprises account for 29% of the total. In the educational services sector, women-led firms account for 45% of the overall, and in the administrative services and waste management area they constitute 44% of the overall. At the other end of the scale are the construction industry, where women-owned companies represent just 2% of the total, transport and warehousing services, where they account for 11%, and finance and insurance, where just 20% of companies are led by women.

These “women-friendly” sectors, by the way, have been seeing significant growth in women-owned businesses over the past 11 years to 2013. In educational services the growth has been 113% in the period, while administration and waste services have seen growth of 58% in the number of women-led companies. In healthcare and social assistance the growth has been 45%.

These figures seem to suggest that female entrepreneurship is thriving across industries and it is also reflecting the broader growth trends in certain industries such as health care and IT. Yet, there are some deep-rooted challenges that women entrepreneurs face, including the balance between work and family life, and the fear of failure, writes Nicole Fallon in an article for BusinessNewsDaily. One of these challenges is that female business leaders find themselves forced to act like men in order to avoid being mistreated only on the basis of their gender. At the same time, some gender-specific traits such as enhanced emotionality and nurturing tendencies can get in the way of business success. As women get more emotionally attached to their work, they may find themselves unable to make difficult decision when the need arises, says Delia Passi, chief executive of WomenCertified, the company that founded the Women’s Choice Award. Fear of failure is another stumbling block which can hold women back and it is only through the acceptance of the possibility of failure that they would be able to go forward, Passi explains. Balancing between work and family is a major challenge for many women but especially so for entrepreneurs. Still, there are ways to do it, starting with ignoring petty problems both at work and at home, advises Hilary Genga, chief executive of a swimwear company. Finally, female business leaders frequently find it hard to get support from their peers. The reason is simple enough: there are just not that many female entrepreneurs and the ones that are there could experience insecurity from the lack of fellow support, much like female students in the fields of science, tech, engineering and math. With that said, however, it must be noted that the right kind of encouragement could benefit both aspiring female business leaders and girls with a STEM degree; part of this right kind of encouragement is the fact that a number of the fastest-growing women-led businesses on WPO’s list work are in the tech industry. This provides for a growing number of role models for those who are at the start of their career path and a good example for those who are considering setting up their own business.

 

Sources:

1. Brooks, Chad. “5 Industries Where Women-Owned Businesses Survive Longer.” BusinessNewsDaily, February 2014. http://smallbusiness.foxbusiness.com/entrepreneurs/2014/02/18/5-industries-where-women-owned-businesses-survive-longer/

2. “The 2013 State of Women-Owned Businesses Report”. American Express OPEN, March 2013. http://www.womenable.com/userfiles/downloads/2013_State_of_Women-Owned_Businesses_Report_FINAL.pdf

3. “Fifty Thriving Women Entrepreneurs Recognized in Dallas for Their Texas-Sized Growth.” Business Wire, May 2013. http://www.businesswire.com/news/home/20130502005163/en#.UwYD1CfXuHs

4.Nisen, Max. “Ten American Industries That Are Going To Boom In The Next Decade.” Business Insider, December 2013. http://www.businessinsider.com/booming-industries-for-the-next-decade-2013-12

5. Fallon, Nicole. “5 Challenges Women Entrepreneurs Face (and How to Overcome Them).” BusinessNewsDaily, October 2013. http://www.businessnewsdaily.com/5268-women-entrepreneur-challenges.html

6. Goudreau, Jenna. “Leaning In: The 10 Fastest-Growing Women-Owned Businesses.” May 2013. http://www.entrepreneur.com/article/226564