The number of women-owned firms is growing more rapidly than the number of U.S. businesses overall -- an important point to consider in a slow moving economy aching for growth. According to the U.S. Census Bureau's most recent data, there were 7.8 million women-owned firms in the United States in 2007. Those firms generated revenues of $1.2 billion and employed 7.6 million workers. Are those firms important? You bet they are! With an increasing number of women pursuing entrepreneurial careers, it is important to gain a better understanding of the factors that will help them succeed. This isn't a matter of equity. It's not a feminist thing. Understanding and catering to these factors is just good business.
Three types of "capital" play an essential role in the launch and development of women-owned firms: financial capital (funding), human capital (education and experience), and social capital (key contacts and networks). As a business community, we have already learned a lot about the effects of financial and human capital, but we know considerably less about the role of social capital in helping women entrepreneurs to achieve their goals.
The task of every entrepreneur is to mobilize and acquire the resources and capabilities that she needs to make her firm successful. She may have great product development skills, but lack marketing expertise. She may have a company with the potential for dramatic growth, but lack systems and controls to ensure that the fast moving train does not go off the tracks. These are exemplary opportunities for her to use social capital networks and contacts who can help her secure the tools that she needs to succeed.
Social capital is carefully built and cultivated over time, and it is something to which women entrepreneurs need to pay careful attention. A social capital network can include classmates, professors, previous employers and co-workers, family, friends, and associates that you meet through clubs, organizations, or civic events. The goal is to identify key players who can provide access to resources or provide valued advice early on, and develop relationships with them. Don't wait until you actually need something; start now!
Why is social capital so important for women? Your social capital consists of networks and contacts that can help you secure information, expertise, opportunities, and needed resources such as financial capital. Traditionally, women entrepreneurs have not been a part of many important "old boys" networks in the world of business, and it is only recently that they have begun to penetrate those networks while also building their own. Thus, women are still playing "catch-up" on the social capital front.
We'd like to leave you with a few tips for building your social capital:
- Honestly assess your personal and firm resources and capabilities to identify gaps. Those gaps are your road map for a networking strategy.
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