Seven Tips for Women Entrepreneurs
Start-up tips for female business owners.
More women than ever before are grabbing the reins and starting their own businesses. The number of women-owned small businesses is growing approximately twice as quickly as the national average for all start-ups. Despite some long-held and inaccurate stereotypes of women tending towards makeup sales or Beanie Baby businesses, in truth there's no such thing as a typical "woman-owned business."
Women are starting businesses of every type and size and in every industry -- from construction to technology to professional services, and from one-person consulting firms to Fortune 500 companies. The reasons women are jumping into the world of small business are as varied as the women themselves.
Some women entrepreneurs come from the corporate executive world and are simply ready to take a crack at running things themselves and putting their own ideas into action. Others have faced layoffs from a downsizing economy or are re-entering the workforce after taking time off to raise children. Still other women are pursing long-held dreams of running arts- or crafts-based businesses.
For entrepreneurs of all stripes -- women and men included -- the pre-start-up phase is typically characterized by a flood of questions about what exactly it takes to make it in business. Are there different answers to these questions for men versus women? Not really. Every business needs to be based on a solid idea, aimed at a profitable market or niche, have solid systems in place, and market itself effectively. And, of course, the legal and bureaucratic rules facing women entrepreneurs are exactly the same as those facing men.
But as many women business owners will tell you, the road to success for women often involves its own unique set of hazards. Surveys of women business owners show that women's business concerns tend to skew towards issues such as finding work-life balance, start-up (or expansion) financing, and marketing. The following tips address some of the issues and concerns that are most commonly faced by women entrepreneurs.
1. Start a business that works for you and fits with your personal life. There are no rules as to what a "real" business looks like. For some businesspeople, success might mean an international operation with hundreds of employees and annual revenues in the tens of millions. For others, a small consulting firm or artisan business that pays a healthy salary and allows generous personal freedom might be considered the pinnacle of success. The key is to take the time early in the planning process to consider this question and decide for yourself what your ideal vision is for your business and your personal life.
Remember also that small businesses can be quite profitable, particularly if they target an untapped (or undertapped) niche. It's almost always possible to find profitable niche markets if you look carefully.
2. Don't sweat the bureaucracy. A lot of would-be entrepreneurs, women and men alike, find themselves stuck on the verge of taking the leap into starting a business, but confused about how to tackle the legal rules of getting started. This hang-up is always grounded more in fear than reality; the truth is that clearing the bureaucratic hurdles isn't usually a big deal.
You can usually start a sole proprietorship (the legal term for a one-owner business) or a partnership (a business with more than one owner) by registering with just one government office. And for business owners who want protection from personal liability for business debts -- often referred to by the legal jargon "limited liability" -- the simplest corporations or limited liability companies (LLCs) require only a couple more registration tasks to complete. In other words, once you have your business idea developed to a certain degree, all you need to do is visit a few government offices, fill out some forms, and pay some fees -- and suddenly your idea will have become an actual, legitimate business.
Of course, there's a lot more to launching a successful small business than dealing with bureaucratic requirements. For starters, you'll need to have a sound business idea, and you'll need to be able to develop good management skills to guide it to success. This is where you should put your mental energy and good ideas; don't waste precious brain cells worrying about the legal hurdles.
3. For businesses with moderate to significant overhead, it is crucial to start the business with adequate funds. Starting a business without enough money to ride out the early lean days (described as "undercapitalization") is the most common reason that businesses fail. Undercapitalization is less of an issue with small service-based businesses that don't have many fixed expenses. But businesses with overhead such as rent, salaries for employees, utility bills, inventory, equipment, insurance, or other fixed costs absolutely need to plan carefully and pull together enough funding to support the fledgling business as it works up to speed.
Also, though it's important to start your business with enough capital, that doesn't mean that every business needs piles and piles of money to get off the ground. Plenty of mega-successful businesses were started on a shoestring: Apple Computer started in a garage; Hewlett-Packard started in the dining room of the Packard home; the list goes on and on. Generally speaking, a business that can find creative, thrifty ways to provide its product or service -- especially in its early days -- will typically find more success than a business that adopts a "spend more money" approach.
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