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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.
Turning an idea into a business takes extensive planning. In this stage of entrepreneurship, women business owners lay the foundation for turning their dreams into a reality.
Key aspects of a solid business foundation include:
- Writing a business plan.
- Lining up clients.
- Networking with suppliers.
- Finding mentors.
- Assessing financial needs.
While each task when starting a business is different, they all have one thing in common: They're essential to do as early in the process as possible.
For instance Regina, the founder of a New York-based jewelry wholesaler who we interviewed, remembered how much time startup preparations took.
“In the year I started my business, I started setting up bank accounts and a credit card, filing the paperwork for my LLC, organizing shipping and reaching out to clients," she said. "I had taken a month off after leaving my job and then spent two months to get it all in line. Then when I was ready, I came back prepared and correct."
The planning process enables entrepreneurs to shape their businesses so that they offer the flexibility, balance and fulfillment they may have been lacking in their previous work. These business owners share a common mindset characterized by creative problem-solving, compassion, and a determination to do and be better for themselves, their families, customers and employees.
Developing New Skills for a New Business
Many business owners interviewed for the report acknowledged their unique challenges as women. Like many entrepreneurs at this stage, most required more business knowledge when they started this process. They also needed more peers or mentors to rely on to determine how their business would operate. Many of the women expressed a desire for more support when they were in this stage.
For instance when Priyanka, founder of a healthcare services business, began taking steps to start her business, she faced opposition from her family, who wanted her to remain a practicing physician. They asked what she knew about technology, getting financing or running a company. Despite these pressures, she pushed on, developing the skills she needed to succeed.
Many business owners learn as they go. Chun, who founded a New York-based pet grooming and daycare business, said she studied similar companies to develop a business model. “Once I decided what I wanted to do, I launched into market research. I just started researching who's out there, who's doing this, what are the rules," she explained.
Finding the Right Resources to Start a Company
Women business owners might need more resources in the planning stage than at any other moment. Industry information, financial education and network connections may be available but hard to find.
This means that successful women entrepreneurs often take a do-it-yourself approach to build their businesses. But how do they do it?
Women business owners often turn to LinkedIn and Facebook groups for business advice and support, our research showed. However, these platforms often fall short. They may not provide the industry-specific information that would help new business owners structure their companies. Similarly, business owners frequently find that industry associations don't always offer all the information and networking opportunities they promise.
Amanda, a venture capitalist, said that business owners can find what they need, but it may take some digging.
“What I've found is that there's actually an abundance of resources: It's almost like too many resources. The issue is it's hard to figure out what is the right resource for you."
With the prevalence of information available online, the challenge of not just finding information but verifying it and ensuring that it's coming from a credible source adds a new layer to the equation, especially for those who are new to owning and running a business.
However for Jo, the head of a New York-based property management company, the plethora of information on the internet has helped her grow as a business owner.
“I really looked for resources, but now with the internet, everything is so much easier. Google is my best friend," she said. “I Google everything or look on YouTube if I don't know how to do something. I just take more time on the internet and look for what I need."
Accessing Financing
The planning phase is where the financial work truly begins — scouring the internet and social networks, doing independent research and talking to peers. Business owners at the planning stage have had to work hard to access the resources they need to start their businesses on the right foot.
Even the smallest, newest businesses require a sound financial foundation. First-time entrepreneurs often find financial matters incredibly challenging. These business owners may not be familiar with all the financing tools available to them, and they do not always have solid contacts with bankers or other financial providers. As a result, many early-stage business owners use their own funds to start their companies rather than borrow.
Reasons women business owners make this financial decision include:
- A strong desire to make it on their own without relying on a financial institution.
- Worries about owing money if their business wasn't successful.
- Thinking it would be easier to rebuild savings than to repay a loan.
- Distrust of banks to be understanding and reliable.
- The lack of a financial relationship contact.
Many founders make financial sacrifices to get their businesses off the ground – whether it be self-funding, dipping into savings or taking out personal loans. Finding access to the right financial resources at this stage is crucial – something the industry must confront if it genuinely wishes to support the growth of the next generation of business owners.
The work, research and planning that happens at this stage truly set the tone for the future success of the business. With proper planning early on, women business owners can continue to grow their companies on top of a solid, and sustainable, foundation.
What's next? The Startup 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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