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As a bank founded on the entrepreneurial spirit, women business owners are a group that City National Bank is especially passionate about supporting. Breaking down the barriers that limit women's ability to prosper as independent business owners is critical to our collective economic future. That's why we undertook a research initiative to better understand the experiences of women entrepreneurs.
This article is adapted from a portion of that report. Download the complete report or read more articles based on it here.
Every business starts with an idea, whether it's a product not currently available in the marketplace, a passion project that the business owner wants to turn into a viable business or a new or improved service that the entrepreneur can provide. The drive to turn these ideas into successful companies is strong. One survey from Digital.com found that 43% of the Americans it surveyed planned to start a business within one year.
Women face particularly difficult challenges when starting a new business. They often lack confidence in their abilities, and even their family and friends might amplify their doubts. Yet, when women overcome their challenges, owning a business introduces a feeling of confidence and control that is hard to find while working for someone else.
What Happens During the Inception Stage of a Business?
During the inception stage, business owners begin to translate their ideas into reality by mapping out the resources, support and partners they will need to succeed.
It's a scary but exhilarating time. Entrepreneurs are saying goodbye to a regular paycheck, benefits and the collegial support of co-workers. However, they're trading all these comforts for an exciting new phase of their career.
Understanding Why People Start New Businesses
Women start businesses for all kinds of reasons, from escaping unsatisfactory work situations, to pursuing a passion, to making more money than they can in the corporate setting. Many women business owners cite flexibility and control over their own schedules as primary motivators. Yet entrepreneurship is demanding; many entrepreneurs find that they have less free time than they did while working, not more.
Flexibility is especially important for women business owners. Many of them start their own business to spend more time with their children. For Melanie, the head of a retail services company who we interviewed, motherhood was what set her on the path toward ownership.
“In my previous job, there was very little flexibility. That lack of flexibility really became apparent when I had a child," she said.
Still, not all women who start businesses are looking for greater work-life balance. Some of them feel limited creatively and professionally in a corporate setting. Poor leadership can make them feel unappreciated and undervalued. Their manager may not listen to their ideas, or they may see little opportunity for advancement. However, people who push through toward success find business ownership can build confidence and rekindle their passion for their careers.
“When I left and I started my own business, I had no idea what I was doing," said Sheila, the founder of a custom packaging firm. “When my corporate employer didn't want to pay me what I was worth, and they were getting rich off my efforts, I said, 'I can do this on my own.'"
City National's research showed that women who pushed through owning a business and found success rekindled their passion for their careers.
“I was pregnant and leaving an abusive relationship with the baby's father and also finishing my degree," said Chun, the owner of a pet care industry company. "I thought, 'What else do I love?' I really love animals. I thought, I can absolutely make this a real business."
The Uncertainty of Starting a Business
Starting a business on the right foot requires entrepreneurs to figure out every aspect of their new company.
Considerations for a new business owner include:
- Creating products and services.
- Marketing their new company.
- Securing financing.
- Planning for growth.
- Hiring and managing staff.
First-time business owners often lack confidence in their abilities to run their companies—and with good reason. They have often never done many of these things before. Even if a woman has experience with starting a successful company, there's no guarantee that starting a new one will have the same results.
There's also a personal aspect to starting a business: Friends and family may not always be supportive, amplifying women business owners' doubts.
“One of the trends I see in women business owners is a lack of confidence," said Amanda, a venture capitalist. “People talk about imposter syndrome as if it's something you should individually overcome, but it's a product of systemic institutional development."
Build a Network
During the inception stage, entrepreneurs can build their confidence through networking and educational opportunities. Women business owners thrive when they can connect with fellow entrepreneurs on shared issues.
Find a Mentor
Mentorship between women at the beginning stages of business ownership can be especially beneficial.
Finding a mentor who is further along in the entrepreneurial process can be especially important; they can recommend strategies that worked for them, provide guidance about tools and resources and, often most important, provide reassurance that if business ownership worked for them, it can work for others, too.
Further Education
In addition to informal networking and information sharing, structured education can be helpful as well. Seminars about fundamental business concepts like how to write a business plan, how to seek financing and what you need to know when you hire employees can provide added confidence as owners take on the challenges of starting a company.
For many women, these steps can help them overcome any confidence issues that they may have experienced in the earliest stages of their business idea.
Taking the First Step Towards Success
The inception stage is a challenging time emotionally for women founders. A common shared experience among them is a sense of dissatisfaction with their current employment and a strong desire to do more for themselves, both personally and professionally. It can also be a terrifying time, considering whether they're ready to take that leap.
Starting a business is a challenging experience for everyone. However, it has been a source of incredible empowerment and pride for many women who have managed to succeed.
During the inception stage, future founders may have little more than a great idea, and a desire to make it work as a business. For many women business owners, overcoming that first step and deciding to turn that idea into a real business is a hurdle they can't pass, but for others who decide to take that leap, the journey is just beginning.
What's next? The Planning Stage.
Download the full report, From Inception to Succession: The Six Stages of Women's Business Ownership, here.
The Stages of Business Growth
This article is for general information and education only. It is provided as a courtesy to the clients and friends of City National Bank (City National). City National does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of City National. Please cite source when quoting.
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