The number of women choosing to start their own businesses is increasing constantly. Last year in the U.S., there were nearly 9.1 million businesses owned by women, according to the 2014 State of Women-Owned Businesses Report, up from about 8.6 million in 2013. Furthermore, these businesses employed about 7.9 million employees (other than the business owners) and generated about $1.4 trillion in revenues.
So how can women aspiring to continue these trends give themselves the best chance to succeed? Here are some considerations:
Decide What Makes Sense for You
You’ve no doubt heard the saying “work to live, don’t live to work,” but this can be hard, especially for people trying to get a business off the ground. For many entrepreneurs, there is always something to be done. It’s important, however, to choose a business model that allows you to have a personal life. Studies show this is generally more important for female entrepreneurs than for male.
Also, “success” is a subjective word, and everyone has different ideas about what it looks like. Before starting a business, you should decide what it would take for you to consider your business successful. Just make sure you’re realistic about it. Trying to become a millionaire within a year probably isn’t going to happen, which leads to my next point.
Don’t Do It for the Money
Yes, most people are allured by the prospect of emulating the successes of Bill Gates or Steve Jobs, but how realistic is that, really? In truth, those two anomalies couldn’t have known how successful they would become, but they were inventive, passionate, intelligent and, yes, maybe somewhat lucky in some ways.
For many fledgling businesses, money trickles in slowly at first, so entrepreneurs expecting a big payday right off the bat are probably setting themselves up for disappointment.
Identify an Unsatisfied Need
This is true for anyone starting a business. Constantly survey the markets that are relevant to the business you’re starting and take note of what’s being done and what isn’t. Try to identify an unmet need that you think you can address given your skillset.
This is often much easier said than done, but many successful businesses are not completely novel ideas. Sometimes all it takes is a new spin on an already existing idea. Take Facebook, for example. If you see a good idea but think you can do it even better, then take it and run with it. But you should also ask yourself if this idea is something you want to run with, because if it’s not, you should probably keep trying to think of something that will get you out of bed everyday.
It’s usually also a good idea to look at businesses that had a good idea but still failed (or are failing) and try to identify what mistakes they made. This will help you avoid making the same mistakes.
Be Smart About Financing
There are different ways to finance businesses: through an angel investor, venture capitalist, an investment bank, a personal friend or family member, a bank loan, etc. Securing capital from any of these is sometimes a tall order, especially for women, a recent study from the Harvard School of Business shows.
“Investors prefer pitches presented by a male entrepreneur compared with pitches by a female entrepreneur, even when the content of the pitch is the same,” the study says.
Despite often having difficulty convincing venture capitalists, female entrepreneurs (or any entrepreneurs) should be cautious when taking out bank loans. Banks won’t forgive your debt in the event your business goes south, and they really won’t care about the fate of the business the way an investor would. Furthermore, taking out a loan is singlehandedly assuming all the risk involved with the business, and that’s never advisable. It’s far better to spread the risk out over multiple stakeholders so you’ll have people rooting on your success.
In addition, many hugely successful businesses have been started with very little capital, including Apple and Hewlett-Packard. In fact, doing a lot with a little is arguably what being entrepreneurial is all about, especially in your company’s early stages.
Female entrepreneurs can also consider resources like Women’s Business Centers, which exist all over the country to assist female entrepreneurs financially and professionally. Also, community development financial institutions, which focus on improving economic opportunities in underserved communities, are an option.
Don’t Let Paperwork Stand in Your Way
It’s sad when a great idea doesn’t come to fruition because the necessary formalities were too daunting. Usually the bureaucracy isn’t as complicated as people think.
Normally, registering with just one government office is enough to start a sole proprietorship or a partnership. Starting a simple corporation or limited liability company usually only takes a little more work. In other words, you should devote your energy toward coming up with a good idea for a business and putting that idea into action, not toward worrying about dealing with the government.
Constantly be on the lookout for people who could present opportunities for your business and develop relationships with them. Let them know about your business without blowing hot air in hopes they will recommend you to someone in their circle.
Don’t Try to Do Too Much
Even established companies shoot themselves in the foot when they bite off more than they can chew. When you try to do everything, how can you do anything well? Focus on a specific goal, and do that one thing really well before you consider branching out.
Don’t Hesitate to Ask for Help
Everyone needs help sometimes, and it’s not a sign of weakness to admit it. Surround yourself with as many good, capable people as you can and defer to them as much as you need to. No one’s good at everything, and it’s important to recognize your weaknesses and find people who can make up for them.
It turns out most of the above points are relevant to both male and female entrepreneurs, and, though they won’t guarantee success, they will almost always help your chances.