Time to Raise a Ruckus

As I write this, the US House Small Business Committee is convening a “foregone conclusion” hearing focusing on the duplication of entrepreneurial development services at the SBA. Why is it a foregone conclusion? They’ve already sent in their Views and Estimates letter to the House Budget Committee – not only saying that there is duplication of business development services but recommending the elimination of funding for the nation’s 110 women’s business centers (WBCs) in FY2012. And they’ve denied any women’s business center leader or the Association of Women’s Business Centers the opportunity to testify in defense of the program at this hearing. We’ve tried, and sent in letters and research findings refuting their contention, to no avail.

Yes, the economy is still sputtering. Yes, the budget deficit is a serious issue that must be addressed. And, yes, there is most certainly some duplication of services in the economic development efforts of the federal government (as mentioned in the recent GAO report). But do we really think, at the very time we want to get small businesses booming again, that this is the time to cut programs that provide direct support to business creation and job growth? And do we really think that a “one size fits all” approach to business development will work when business trends in general are moving toward “mass customization” and the “mass market of one“?

We can’t sit idly by and allow budget-cutting fervor to outweigh the need for a variety of approaches to economic development assistance. Here’s why Chairman Graves is wrong:

  • WBCs have a proven track record of results: In an analysis of WBC program outcomes conducted by the National Women’s Business Council (see this link for a research summary), it was found that the federal investment in WBCs yielded a 14: return on investment in terms of business revenues added to the economy.
  • The services provided by WBCs are not duplicative: This same study found that there was no difference in program outcomes of WBCs based on their proximity to an SDBC – the clients they serve and support provided are different and number of firms launched or businesses created are the same. Thus, they are not duplicative.
  • WBCs differ from SBDCs and SCORE in some very important ways: 1) WBCs provide longer-term, more relational support, whereas SBDCs and SCORE are more likely to provide one-time, transactional support;
    2) WBCs provide a variety of services (counseling, training, peer groups, mentoring), whereas SBDCs and SCORE are more likely to provide 1 solution to their clients; and
    3) given that the are locally-designed and embedded within local economic development groups, WBC support is more customized and tailored to the needs of a particular community, whereas SBDCs and SCORE are more likely to look similar regardless of location.

And here’s where Congressman Graves and the GAO are right:

  • Women business owners are “the largest growing class of small business owners in the country.” (Views and Estimates letter, p. 9) Quite true, so why, then, eliminate one of only three line-itemed programs for women business owners in the entire Federal budget?
  • “Without quality data on program outcomes, these agencies lack key information that could help them better manage their programs. ” (GAO report, p. 45). Absolutely right, we need better information on outcomes and impact. We are confident that if there were better information, the value of WBCs would be clearer. An invaluable program is definitely being hampered by incomplete data.

What can you do? Write to your members of Congress – especially if they are a member of either the House or Senate Small Business committees, and tell them that the women’s business center program has been invaluable for women’s enterprise creation, and that this is no time to eliminate a program that has a proven economic benefit. All the ammunition you need is contained in the points above (plus your own personal story).

Fellow womenablers, it’s time to raise a ruckus. And here’s one more piece of ammunition: The Performance, Progress and Promise of Women’s Business Centers in the United States, published by Womenable in 2006.

“Between the great things we cannot do
and the small things we will not do,
the danger is that we shall do nothing.”
~ Adolph Monod

~ Julie R. Weeks, President and CEO of Womenable and author of the Womenabler blog, is also the Chair of the Board of the Association of Women’s Business Centers

Growing into New Markets: The Power of Procurement

After a decades-long battle, a Women-Owned Small Business Federal Contract Program is now in place at the US Small Business Administration. Truth be told, the 10-year fight to get the law calling for this program implemented was just the tip of the iceberg. Way back when women business owners and their organizations (NAWBO and AWED (now defunct) chief among them) fought for the passage of the Women’s Business Ownership Act of 1988, they tried to get language inserted referring to access to government contracting programs, but were told that it would sink the entire bill if it were to be inserted – so it was left out.

In the mid 1990’s, then, a 5% goal was established, requesting but not requiring federal agencies to target at least 5% of their spending with women-owned small businesses. Well, as we womenablers know, that goal has never been reached on a government-wide basis – due in large part to the “big kahuna” status of Defense Department spending. In actuality, as of fiscal year 2008 year, 14 federal agencies spent more than 5% with women-owned firms. (Read more about it in this fact sheet from the National Women’s Business Council.) Kudos to them!

And kudos to everyone who kept the pressure on, especially during the stonewalling years of the Bush Administration, to see the day come – February 4, 2011 – when the program was finally put in place. It’s still early days, as they say, but hundreds of women business owners and other womenablers gathered on March 2 to raise a glass to the program’s success. Thanks, WIPP, for throwing the party!

Anyway, we’re writing today in the wake of these positive developments to share some information that was gathered – by Womenable for American Express OPEN’s Victory in Procurement for Small Business initiative – to better understand how women and men small business owners are faring in the federal procurement marketplace. There are three reports publicly available that have come from this research:

What do these reports show – especially about women business owners? Here are some key findings:

  • It takes time and money to get into the federal procurement marketplace – 20 months of trying for the first contract win and an average $86,000 annual investment – but it took women business owners no longer, and a somewhat lower annual investment, to be successful;
  • Once they have become active federal contractors, women match their peers with respect to their business’ size and the total value of the contracts they’ve won to date;
  • However, both women and minority business owners are much more likely to be left at the starting gate. While 28% of active contractors are women and 24% are firms owned by persons of color (close to the national average among all firms), fully 39% of inactive contractors (defined as firms that are registered on CCR but that have either never performed or are not currently performing on a federal contract) are women and 48% are minorities.

We hope you’ll take a few minutes and read through one or all of these reports – and take advantage of the programs that are out there to help you break into the federal procurement marketplace, including:

The Most Womenabling Research Studies of 2010

In tandem with our list of the top ten womenabling news and events of the year – highlighted in the previous blogpost – we’d now like to share our list of the most noteworthy womenabling research reports of 2010. Here they are, listed in alphabetical order by report title.

You might notice that there are 11 rather than a “top ten,” but we couldn’t decide which one to take out. And we might even have had 12 if we’d only seen a GEM women’s entrepreneurship report this year …

Take a look at these important studies, and save them in your womenabling reference files. Happy New Year!

The Most Womenabling News of 2010

In our year-end e-newsletter, rather than summarizing the latest womenabling news and providing womenablers everywhere with insights to educate, enlighten and empower your efforts, we’re ending the year by compiling what we feel are the most interesting and relevant activities that have taken place in the field of women’s enterprise development in 2010. Repeated here, and in no particular order, are what we see as the ten most noteworthy trends and events of the year:

  1. The establishment of UN Women: It’s been talked about and touted for a number of years, and this year it finally happened: the merging of heretofore disparate UN activities for and about women into one “super agency” for women: the “UN Entity for Gender Equality and the Empowerment of Women,”  otherwise known as UN Women. This entity will oversee efforts formerly under the purview of the UN’s Division for the Advancement of Women (DAW), International Research and Training Institute for the Advancement of Women (INSTRAW), Office of the Special Adviser on Gender Issues and the Advancement of Women (OSAGI), and the UN Development Fund for Women (UNIFEM). Heading the new combined entity is former Chilean president Michelle Bachelet. What do you need to know about the new agency and how you can engage with it? Read this.
  2. Expansion of women’s empowerment measurements: Where does women’s economic empowerment stand? Some of the most well-known measurements of women’s empowerment include the World Economic Forum’s Global Gender Gap reports, the UN’s GDI and GEM measurements, and the OECD’s Gender, Institutions and Development Data Base. However, all of these include several other measures (including health, education and political participation) as well as economic empowerment and, with respect to the latter, focus on women as workers rather than business owners. There are the Global Entrepreneurship Monitor’s reports on women and entrepreneurship but, sadly, one has not been published since 2007. This year, though, saw the addition of two new kids on the block, and both of these indicators focus entirely on economic empowerment, and specifically on entrepreneurship. They are the Economist Intelligence Unit’s Women’s Economic Opportunity Index, and a new GenderCLIR methodology for BEE assessment from USAID/Booz Allen Hamilton.
  3. A picture’s worth a thousand words: The International Museum of Women launched a powerful online exhibition this year, Economica: Women and the Global Economy. One project within the exhibition is Picturing Power & Potential, a juried photo exhibit which proves the adage and is well worth a look. Bookmark and return to the site as they add to it in the coming year.
  4. Recognition of “The Female Factor” in some media circles, but …: The International Herald Tribune has written a number of compelling articles about women’s empowerment issues this year as a part of their series, “The Female Factor.” And Canada’s Globe and Mail launched a national conversation about Women in Power during Women’s History Month in Canada (October). Despite this nice coverage, however, a recent study, Who Makes the News? The Global Media Monitoring Report 2010, finds that women’s voices and stories – especially about economic issues – are still largely untold in the news media.
  5. Second interval review for MDGs: In 2000, at the United Nations Millennium Summit, 189 world leaders planted an ambitious flag in the ground, agreeing on eight Millennium Development Goals aimed at eliminating world poverty by 2015. (Our favorite: #3, gender equity.) A “second interval” review of the progress being made on meeting those goals was held this year, including the publication of an MDG report and the convening of an MDG summit. The bottom line? Progress is indeed being made, but in many cases is uneven, affecting some populations and not others. Here’s a report card showing some of the details. While this review shows that much remains to be done to meet the 2015 deadline, “It is not in the stars to hold our destiny, but in ourselves.” (William Shakespeare)
  6. Progress stalled for WED in UK: Last year, in our year-end top trends E-newsletter, we noted the implosion of Prowess – the UK’s key advocacy organization for women’s economic empowerment. Well, things have gone from bad to worse in the UK for women’s enterprise development with the election of a   Conservative/Liberal Democrat coalition government. As  feared/expected, one of the new government’s first acts was declaring  that Business Link and Regional Development Agencies would be phased  out, in favor of Local Enterprise Partnerships. It remains to be seen how this will impact focused/tailored business support services such as the women’s business centre pilot programme, but our guess is that it won’t be positive.
  7. A new ED and Chair for NWBC: Another issue we followed with interest last year (though it did not make our top ten list) was stalled activity at the National Women’s Business Council in the wake of the 2008 US presidential election. Well, things are starting to move once again, with the hiring of a new executive director, Dana Lewis, and the appointment of a new chair, Donna James. Filling Council seats and revving up Council activities should commence in 2011. Women’s business advocates in the US are relieved.
  8. Quinquennial census of women-owned firms in the US: Say what you will about the growing hegemony of political and economic power worldwide, the United States still rocks when it comes to measuring the number and economic power of women-owned businesses. The  2007 quinquennial economic census of women-owned firms was published this year. Womenable summarizes the key trends for you in this blogpost.
  9. Progress in procurement: Doing business with the US government is getting easier for women-owned businesses. Finally, after a ten-year wait, a women-owned business procurement program is finally going to be launched by the SBA early next year. Not content to wait for this to happen, late in 2008 Women Impacting Public Policy, with the support of American Express OPEN, launched a “Give Me 5%” initiative (which refers to the gov’t-wide spending goal for women-owned firms) to educate women business owners on how to do business with the federal government. Where do things stand with respect to meeting that 5% goal? Federal spending with women-owned firms stands at 3.7% as of FY2009, up from 2.4% a decade earlier but still well short of the goal.
  10. Making market connections: There are two new initiatives poised to help women business owners globally make significant market connections with another important customer: large corporations. First is WEConnect International, an organization that was founded in 2009 but started to get its sea legs this year with the launch of WEConnect Europe and an event in London this October. WEConnect’s goal is to make it easier for large corporations to find women-owned business suppliers and for women-owned firms to learn how to do business with large corporations. And speaking of large corporations, one of them – Coca-Cola (ranked 404 on Fortune’s Global 500 largest companies) – announced a “reach for the stars” goal at this year’s Clinton Global Initiative conference. Coke’s “5 by 20” project aims to draw 5 million women into its Micro Distribution Center program in Africa and elsewhere by the year 2020.

Trends Among Women-Owned Enterprises in the US: Insights from New Census Data

Back in July, the US Census Bureau published preliminary estimates of the number and overall growth of women-owned enterprises as of 2007 at a national level. At that time, we learned that:

  • There are 7.8 million majority women-owned firms in the US, accounting for 29% of all businesses in the country,
  • These enterprises employ 7.6 million workers, contributing 6% of the jobs in the country, and
  • These firms generate $1.2 trillion in revenues, accounting for 4% of all business receipts nationally.

Just yesterday, however, the Census Bureau released the final numbers, along with more detailed figures at the state and local level, as well as by industry and size level of the firm. What does this new information show? While there is still a lot of data for Womenable and other womenablers to sift through (and sift we shall), we thought that all of you would be interested in our key first impressions and take-aways from this recent announcement. We have three initial impressions to share with you.

FIRST, women-owned firms are still growing – but that growth lies in partnership. As of 2007, as noted above, the number of majority women-owned firms stands at 7.8 million, accounting for 29% of all businesses. That number represents a 20% increase since the 2002 census, about equal to the 18% seen among all firms. However, lest you think that is a retreat from the “women-owned firms are growing at twice the national average” mantra of the past decade, the Census has improved the way it is tallying equally-owned firms. Those firms grew in number from 2.7 million to 4.6 million, a 71% increase. So, if one were to look at “women- and equally-owned” firm growth over the past five years (which I personally do not like to do, as it becomes synonymous with “women-owned firms” and thus confuses the statistical picture and international comparisons), growth among that population stands at 35%, which is nearly twice the 18% national rate. There is also hidden women-led firm growth in the “unclassifiable by gender” category – which grew in number by 63% over the past five years. While these firms represent only 3% of US firms, they account for 64% of revenues and 52% of all employment. It is in this area that we need more research and dissection – to parse out and tally the impact of plurality women-owned firms (which we like to think of as women-led – and which would include women-founded firms with equity partners or venture capital investments) and women-led social enterprises (which are of increasing interest but have not yet been looked at separately in Census data).

SECOND, we now can see where women-owned firms are faring best in terms of industry and geography. From a geographic perspective, taking a look at what states are host to the greatest share of women-owned firms, we can see that the share of women-owned firms by state ranges from a low of 22.1% in South Dakota to a high of 34.5% in the District of Columbia. There are three states in which the share of women-owned firms is 31% or greater: Maryland (32.6%), New Mexico (31.7%), and Hawaii (31%). It seems that it pays to be close to the Nation’s Capital – confirmation, perhaps, of the importance of the implementation of the Women-Owned Small Business Procurement Program by the US Small Business Administration, which will be unveiled next February.

In terms of industry, the publication of the 2007 census now allows, for the first time, a multi-year analysis of growth by gender and industry using the new North American Industry Classification System (NAICS codes). Implemented for the first time in the 2002 Census (preventing us, unfortunately, from taking a longer view of growth by industry), we can now see what the “hot industries” for women-owned firms are, and they are:

  • Administrative services (think personnel/temp agencies, travel agencies, investigative services, janitorial or landscaping services, and trade show organizers): this sector represents 10% of women-owned firms and has grown (in number of firms) by 38% over the past five years,
  • Educational services (including business/secretarial and computer training providers, language schools, and exam preparation/tutoring), which is home to 4% of all women-owned firms, growing in number by 44% since 2002,
  • Arts/Entertainment/Recreation Services (including performing arts agents, companies and artists, golf courses, marinas and ski facilities, and amusement parks): 5% of women-owned firms, up 30% over the past five years, and
  • Construction firms, representing 3% of all women-owned businesses, an increase of 33% since 2002.

THIRD, and perhaps most importantly, women-owned firms have not gained ANY significant economic ground over the past five years. (It should be noted that these data do not include our most recent recessionary period.) In 2002, 2% of all women-owned firms employed 50 or more workers. That share is unchanged today. And, while the total number of million-dollar women-owned firms has grown by 21% over the past five years (from 117,069 to 141,893), compared to a 9% increase among men-owned firms – these firms still only comprise a 2% share of women-owned firms, unchanged from the share seen in the 2002 Census. Perhaps most importantly, when compared to men-owned firms, women-owned firms still lag behind: 4% of men-owned firms employ 50 or more workers, and 6% generate $1 million or more in revenue. While we take exception to the gloom-and-doom interpretation of the US Women’s Chamber of Commerce report, Women’s Businesses Struggle for Market Share (we have not lost “market share” but neither have we gained any), we strongly feel that what is needed – by public policy makers, women’s business organizations, educators and other stakeholders – is a concerted and better coordinated effort to get women business owners to set their growth goals higher. In the US (unlike in many other countries), getting women to start businesses is not the challenge; it is getting women business owners to “think bigger” and to grow their firms to the next level. These new data confirm what Womenable has known for quite some time – that the “sweet spot” for women’s enterprise development in the next decade or more will be the “missing middle.” That is why organizations like WEConnect International, Count Me In’s Make Mine a Million $ Business initiative, and WIPP’s Give Me 5% program are so critically important.

If you’re curious to learn more about the new Census data, you might want to visit these links:

  • The Census Bureau’s news release highlighting key statistics, in English and in Spanish,
  • The web page containing links to key tables and charts pertaining to women-owned businesses, and
  • The American Fact Finder summary page of key web-based data tables from the Survey of Business Owners (SBO).

Finally, mark your womenabling calendars for June 2011 – that’s when the Census Bureau will release their summary SBO data, which will contain information on the number and economic contributions of firms owned by women of color. We’ll be waiting for that important news, and will share the results when they are available.