Women-owned businesses have grown from four million to 11 million across the U.S over the past 30 years, and now account for 39 percent of all companies.1
If you’re preparing to join this growing community of business owners, the following are resources you may be able to leverage to give your new business an edge.
Seek funding options
In the planning stage of a business, funding should come first. “I think your top priority is securing your funding and shoring up your finances before you launch,” says Susie Roh, senior vice president, market leader, for U.S. Bank Private Wealth Management. “You really need to know that you have those pieces squared away, so you can focus on your product or your service and your new business adventure.”
Develop a support system of advisors, mentors and other women business owners who can help play a role in how your run your business.
When it comes to finding those funding opportunities there are several paths you could follow, including:
- Women business owner groups: There are various organizations dedicated to helping women business owners, such as:
- Women Business Centers: These centers are sponsored by the U.S. Small Business Administration and have various locations across the country.
- Private grants: This option requires some research, but organizations such as the Amber Grant Foundation and the Eileen Fisher Women-Owned Business Grant offer national programs for women entrepreneurs.
- Business programs: The Female Founders Alliance is a network for women business owners that provides fundraising opportunities and other programs to support female business owners.
- Angel investors: In a study from SCORE, an organization that provides mentorship for entrepreneurs, only 11 percent of women entrepreneurs used equity raised from investors to fund their business2. “Angel investors can provide industry knowledge and may have insights to help your business,” Roh says. “However, it’s important to remember that angel investors may seek to own a piece of your business as part of their investment.”
- Accelerator funds: These funds may be particularly beneficial because they can provide funding, mentorship, access to industry connections and educational opportunities to give your business a running start. Accelerator funds are selective and have an application process, so it’s important to do your research and choose one that will work best for your business. Once you’ve chosen the right fit, you’ll need to demonstrate that your business is worth the investment. Present a strong business plan, emphasize the potential and knowledge of your team and be ready to defend your idea.
- Industry-specific grants: Finding grants targeted toward businesses in your chosen industry is another option. Research any associations or other organizations that support your industry, as some may have grant programs. State and local governments might also offer grants to new small businesses. In addition, the U.S. Small Business Administration has a number of grants with varying criteria that your business might meet, including some grants specifically for women-owned businesses.
- Traditional lending options: These include loans or lines of credit from a financial institution. However, the availability of those options may depend on which stage you are at in the business lifecycle.
- Friends and family: Roh says this is a path some beginning entrepreneurs tend to default to when seeking funding. While trying this path may be helpful, she advises pursuing this as a last resort and to establish clear parameters when borrowing from loved ones.
Since finding the right funding resources is key in starting – and supporting – your business, it may be helpful to seek advice to find the right options for you.
Consult professional resources
A team of trusted advisors is valuable at every point in the business lifecycle. Whether you’re just starting your business and need help creating a plan, or your business is growing and you need help meeting demand, the right advisors can help you.
Use consultations with professionals as an opportunity to protect not only your business but yourself as well. “When it comes to finances many new entrepreneurs make the mistake of thinking they need to choose between having their personal finances survive and stay on track or keeping their business afloat. And many choose the business over the personal,” Roh says. But this isn’t necessary. She recommends using professional advice to help find a balance between your finances, including a legal advisor and a CPA to advise on the business financials.
Grow your network
Develop a support system of advisors, mentors and other women business owners who can help play a role in how you run your business.
Successful women entrepreneurs with different professional backgrounds may be able to offer guidance on business ownership, regardless of their industry, and the challenges that come with it. Roh recommends attending networking events such as Startup Week and working with your bank to find resources.
Roh also recommends looking at organizations that provide sponsorship for women entrepreneurs. When searching for sponsorships it’s important to distinguish between a mentor and a sponsor. Although both are valuable, they serve different purposes:
- A sponsor provides financial funding and influence in exchange for something from you. Look for sponsors who can make further connections for you, such as introducing you to new clients or investors. Identify what you can offer so you can communicate it to potential sponsors.
- A mentor is someone who guides you and provides advice based on their personal experiences dealing with similar situations. Seeking out mentors is equally important as obtaining the financial backing of a sponsor. In fact, entrepreneurs with a mentor are five times more likely to actually launch their business than those without, and 80 percent of businesses with a mentor last past the first year compared to 75 percent of those without2.