Women now own nearly 13 million — or 42 percent — of all businesses in the U.S.
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. 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: 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 business.2 While angel investors can provide industry knowledge and may have insights to help your business, it’s important to remember that they 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: Beginning entrepreneurs may want to default to this path when seeking funding. However, you may want to consider pursuing this as a last resort, and then 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 to help find a balance between your personal and business finances, including a legal advisor and a CPA to advise on the business financials.
Develop a support system of advisors, mentors and other women business owners who can help play a role in how you run your business.
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. Networking events such as Startup Week can be a great way to find connections.
You may also want to look for 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 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 without.2