By: Cindy Bates
Women entrepreneurs face no shortage of challenges when it comes to starting a business but perhaps none are more important, or daunting, than the "Big C's." Capital and credit.
Cultural expectations have, to a certain extent, limited many women's ability to pursue entrepreneurial ventures. What many have come to realize is, that while many women historically faced an uphill battle in their entrepreneurial endeavors, the challenges often fostered new strengths and determination that proved integral to business success.
For example, restricted access to credit led women to start businesses on shoestring budgets or on credit, building up their financial savvy and leading them to find efficient, economical ways to fulfill business needs. Social norms that designated business as an arena exclusively for men, motivated women to form networks and alliances, such as the Business and Professional Women's Clubs, and the National Association of Women Business Owners, which are now critical sources of support for women entrepreneurs.
Of course women have come a long way when it comes to accessing the needed funding to start their businesses -- in fact, as late as the 1950s, banks typically didn't lend to women, and men typically didn't want to do business with them. A strong example is Bette Nesmith, who signed orders as "B. Nesmith" so her male customers wouldn't realize they were ordering from a woman-owned company.
Today, women entrepreneurs own the majority of an estimated 10 million U.S. businesses, or 36 percent of all U.S. businesses, according to the Small Business Administration (SBA). These businesses account for nearly $1.4 trillion in revenues and employ nearly 7.9 million people in the U.S.
While there are still challenges when it comes to capital and credit, success is entirely possible with the right approach. Below are four unique tips for securing financial backing:
Find a financial mentor -- Modern mentors don't have to act in an official capacity. A mentor can be a friend with significant financial expertise or perhaps a fellow SMB owner who has found success in another area.
Know what you need -- Market research can help you determine how much money you need to get your company off the ground and how long it would take before it became profitable. It's important not to underestimate the time or capital needed but it's just as critical to not let a lack of funding derail what could be a lucrative business. Remember, Sara Blakely took $5,000 in savings and transformed it into a $500 million dollar-a-year company called Spanx.
Get involved with local influencer organizations - The SBA is one great example but there are plenty of others, including ASBDC and SCORE. Members often have access to unique networking events and the insight of other entrepreneurs who have faced similar challenges and can help you determine the best funding route for your business, whether it's venture capital, grants, loans or a combination.
Enter contests -- This can be a great exercise for building brand awareness even if you don't win. The submission process allows you to view your business through the eyes of a judge and ask questions you might not otherwise ask. The Painted Zebra, recent runner-up in the Microsoft Small Business Video Contest, gained significant recognition in addition to their $10,000 prize. During National Small Business Week, I'll be participating in the InnovateHER event where entrepreneurs will present their business ideas and be awarded prize money for the best and most innovative products and services that empower the lives of women and their families.
If your business is in need of capital, the SBA is a tremendous resource for women. Its recently announced Leveraging Information and Networks to Access Capital (LINC) tool is a simple, yet fundamental way to secure funding. Described as a "blind matching service similar to 'The Voice,'" but without the drama of buzzers and spinning chairs, LINC matches entrepreneurs with prospective SBA lenders based on business needs. Once you complete the online form, your business information is sent to potential SBA lenders who will contact you within 48 hours should there be a match. Applicants also are provided information on local SBA Resource Partners that can provide free business consulting and low-cost training options.
As we celebrate National Small Business Week -- a time when we recognize the critical economic contributions of America's entrepreneurs and small business owners -- let's make it possible for more women to access the capital needed to ignite ideas into full-fledged businesses.
Cindy Bates is the vice president of the U.S. Small- and Mid-Sized Business (SMB) Organization at Microsoft. She has been with Microsoft for 15 years and is a recognized thought leader in the SMB space. Cindy and her team serve millions of SMBs in the U.S., helping them start, grow and thrive by utilizing today's powerful and affordable technologies. Follow her on Twitter @Cindy_Bates.