Focus on Finance
The number of small businesses owned by women is on the rise-and these businesses are thriving. Between 1997 and 2004, the Center for Women's Business Research estimates the number of privately held, majority women-owned firms in Illinois increased by 25.4 percent, employment grew by 40.7 percent, and sales increased by 36.2 percent.
The center also reported growth in women-owned businesses has outpaced that of other firms. Since 1997, the center estimated women-owned firms have grown at nearly twice the rate of all firms nationally (17 percent versus 9 percent), and these women are finding significant improvements in accessing capital. As more women are venturing from the limits of the workplace-whether to home-based businesses or their own shop-they find securing capital is the most important first step.
For most new business owners, capital must be secured to support the business-and the owner-for at least two years. This could mean just several thousand dollars for purchasing a state-of-the-art computer system and a second phone line for an at-home, side business. But for others, starting a small business means finding the necessary funding resources.
Here are some places to start when thinking about capital for a new small business:
- Credit Cards. Corporate accounts through banks and other institutions may offer lower annual percentage rates (APRs) that allow business owners to keep interest rates down. Beware of interest accumulating quickly if the balance isn't paid. Interest rates can also change quickly, so check the fine print on every statement, and keep your purchases within your budget.
- Investors. Investors can be a blessing or a burden. Those known as "angel" investors tend to help with start-up costs and generally leave you alone to run the day-to-day operations, though they usually invest in chains or what they consider "sure" things. Those known as "venture capitalists" generally offer a more constant flow of money at more of a gamble, but work hard to protect investments with a more hands-on approach. Be wary of borrowing from friends and family members without a signed contract. Many family feuds have started with a failed business venture.
- Loans. Plug the phrase "women business loans" into any Internet search engine, and you'll find a plethora of sites that seem willing to throw money your way. In business, however, anything that seems too good to be true usually is. Look for well-established lending organizations that can help find additional money from programs such as the U.S. Small Business Administration (SBA). The SBA offers numerous financing programs to assist small businesses; you can learn more by visiting their Web site at www.sba.gov.
Your business is an extension of you. It's a personal investment of your time, efforts, and dreams, so make sure you feel comfortable with the people who'll be part of that dream. Any financial institution you work with should ask the right questions to truly understand you and your business, listen to your concerns, and then offer solutions for your particular situation. You should feel that the financial organization or institution you work with has a vested interest in your success. TPW