In mid May 2010, Sharon Hadary published a well-researched and thoughtful piece in the Wall Street Journal, “Why Are Women-Owned Firms Smaller Than Men-Owned Ones? “. In this provocative article, Ms. Hadary digs to understand the “why” behind a sobering statistic: While the number of women-owned businesses are still being created at twice the rate of men, the size of women-owned businesses (in revenues) are on average only 27% that of men-owned enterprises.
Thankfully Ms. Hadary does not fall back on easy answers but looks at a more complete set of causal factors, both external and internal to female-run firms. Externally, she still finds access to capital (or limited access to bank credit and investors), access to markets (or contracts with big partners, whether government or corporations) and access to networks (or personal connections with leaders and influencers) as key limiters to women-owned firm growth.
But as the first and most critical barrier to success, this article points to a factor that is firmly in the control of any entrepreneur – the setting of high, yet realistic, goals. Success research on small businesses has found that having goals (and plans to achieve them) are the greatest predictors of success, even over factors such as number of years in business or industry. (It is no accident that high-valued entrepreneurial programs — like SCORE — always start with a workshop on business planning.) Yet women are less likely than men to set aggressive goals for their businesses. Why?
Maybe this difference in goal setting can be traced back to the origins, or the “why” one decides to plunge into the uncertain abyss of entrepreneurship. In her article, Ms. Hadary points to research that women tend to start businesses as a way to balance work and family demands, while men in general, become entrepreneurs as a way to be the “boss” and grow their businesses as large as possible. Business planning calls for SMART (Specific, Measurable, Achievable, Relevant and Timely) goals. Yet most life-balance goals such as “being there” for kids, caring for aging parents and even community volunteering responsibilities cannot be neatly measured with SMART metrics. And then there is that troublesome problem of planning when the woman-owner’s time is messily divided between business and personal “shareholders”.
But this article does raise a very real gap that can, and should, be narrowed. Rather than citing all these factors as excuses, women-owned businesses should embrace their own brand of goal setting:
Your Next Best Three Steps℠:
1) Schedule your time among all your “shareholders”. Jackie Kelly from Clearing House Now Organizers struck a cord when she stated, “Your to-do’s are a set of intentions. They only become commitments when we make time for them.” Realistically schedule time for both your family/personal commitments as well as your work hours. You may find that you only have 20 hours per week to devote to your business, but this then allows you to set your goals accordingly.
2) Create aggressive SMART goals, but with realistic Assumptions. Business goals, to be effective, should be SMART but good business planning always documents underlying assumptions regarding such externals as competition, the economy, supplier pricing, etc. and then contingency plans when these critical factors do not behave as planned. Include here assumptions about your family and life situation. When one of these assumptions falls down (such as a medical crisis with an aging parent), you then have a plan whereby you can adjust your goals and/or adjust the operations of your firm.
3) Join or form a women-owned business advisory group. You are more likely to feel accountable and focused if you state your goals to an objective, yet supportive advisory team. Personally I belong to many valuable groups where we share business leads, sales calls etc.; but it is within my Women’s Entrepreneur Group that I am able to present all my goals and assumptions. Here I know I can safely get both the tough questions (such as “ why is your pricing so low?”), as well as the supportive answers (such as “where to go for summer childcare options”). Make sure this group is filled with committed, smart female entrepreneurs – who also share like-minded goals.
How do you set goals among your different “shareholders”? Share in the Comments section below.