BY Rajitha Swaminathan Vice President, Program Strategy & Member Experience for Grameen America

Sep 17th 2021

Sustainable BusinessEntrepreneurship

4 Insights for Women-Owned Businesses of All Sizes

Sep 17th 2021

I’ve advised CEOs on corporate strategy, worked with women business owners on improving their operations, and helped women entrepreneurs get microbusinesses up and running.

Through all these experiences, I’ve realized a simple truth: There are certain things women business leaders need, regardless of the size of their operations. Whether expanding a manufacturing business from LA to Taiwan or moving from a home kitchen to a first commercial space, success for women in business requires: knowledge, networks, financing, and growth capital.

Here’s one small—we could even call it “micro”—example. The owner of a popular traditional Mexican food business in Los Angeles had outgrown her home kitchen and moved into a rented restaurant space. But repaying loans from family and friends meant really struggling to pay the rent and buy supplies. Seeking a solution, she turned to our nonprofit microfinance organization, Grameen America.

Grameen America provided the owner with a more manageable microloan that went toward purchasing a freezer and chairs for her restaurant. In addition to financing, though, Grameen America connected her with the knowledge and networks she needed to grow. She has since repaired her roof, hired staff, bumped up her credit score, and received invaluable support from fellow Grameen America members.

Her experience may not seem relevant to a larger company with, say, $2 million in sales and dozens of employees. But no matter how complex their organizations may be, women in business often share challenges unrelated to the size of their enterprise.

Sometimes the solutions to the challenges facing women business owners are even easier to see on a smaller scale. Here are four insights from the microfinance world that I’ve found apply to women-owned businesses of every size.

1. Knowledge Helps Overcome Structural Inequities

Many women who enter the Grameen America program arrive with a wealth of ambition and wisdom but a deficit of financial knowledge. This mirrors, sadly, the corporate world. Consider that after 140 years, the Wharton School this summer finally had its first entering class that was majority women. Without an MBA, many women are held down in the corporate ranks. Knowledge is power in the Fortune 500 world and in the world of startups.

To level the playing field at the microbusiness level, every Grameen America member undergoes five consecutive days of group training. Members get to know our program and some financial basics, like budgeting and managing cash flow.

Women throughout the business world face structural inequities that aren’t easily dismantled. But one way that individual women break through barriers is by being undeniable experts in what they do, pursuing career-long educational and continuous improvement opportunities. Women in microbusinesses may come to us, but women in larger companies can seek out opportunities from organizations such as the Nasdaq Entrepreneurial Center, the National Association of Women Business Owners, and Ladies Who Launch.

2. Networks Can Open Doors

Networking can be crucial to opening doors, but research suggests that women often don’t reap the same rewards from networks as men. That means they often miss out on mentorship, professional growth opportunities, new collaborations, and even new customers.

For women business owners who have found business networking groups less accessible and less effective than they had hoped, connecting with supportive communities created for and by women, like Professional BusinessWomen of California, can be valuable and empowering.

It’s never too early to begin making those connections. Grameen America addresses the networking challenge for women by building upon the social networks that already exist. Each member comes into the program as part of a group of five entrepreneurial women from the same community. Their kids go to the same schools. They shop at the same markets. The Grameen America experience shows how a small cohort of like-minded women business owners can build into a supportive entrepreneurial network.

3. Access to Credit is Essential

For Shirley, a Grameen America member in Fresno, Calif., who owns a gourmet snack company, the best part of the program has been the opportunity to build and improve her credit. She invested the most recent of three Grameen America loans in wholesale ingredients and packaging for her food business. The funding has helped her get her products into five retail locations and begin a pilot selling them in the convenience stores of Hilton Hotels.

Shirley’s story is an example of how access to affordable, manageable loans can help women business owners succeed. Unfortunately, women have sometimes encountered gender bias—including from banks—when attempting to secure financing for their businesses. That kind of experience prompted one woman in the construction industry, with a larger business than Shirley’s, to get her company certified as a woman-owned business so she could tap into more growth opportunities.

Some women hesitate to seek business financing because they think they need to prove themselves by going it alone. But the strategic pursuit of financing is no sign of weakness. In fact, few businesses can grow without it.

Grameen America’s microlending program is designed to address some of the barriers to more equitable financing for women entrepreneurs. A typical starting loan is $1,000 or $2,000, repaid in small weekly installments over six months. Every woman business owner should feel empowered to pursue strategic financing, including on a much larger scale.

4. Growth Capital is Your Ticket to the Next Level

Startups often seek venture capital when they are ready to grow, but women-owned businesses get a dismally small share of these funds. In 2020, a mere 2.3 percent of VC funding went to startups led by women, according to Crunchbase. One way women can overcome that access barrier is to start building a relationship with a lender.

Grameen America members gain access to growth capital by becoming eligible for larger loans as they successfully pay off smaller ones. We have women who have been with us several years, who started out with a $1,000 loan and now receive $12,000 or $13,000 every six months. For a larger business, a comparable scenario might be graduating from a $100,000 loan to borrowing $1.3 million to acquire your cross-town competitors or going from a $500,000 line of credit to a $7 million series A round of venture funding.

Proving the creditworthiness and sustainability of their businesses bit by bit is a good strategy for all women business owners to become better positioned to acquire growth capital. Whether Grameen America, a commercial bank, a VC fund, or a public offering is the ideal financing source for a business, the need for capital rarely ends.

The pandemic has been especially hard on women, even more so for women of color, and many who own businesses have struggled to keep them afloat. But as we build back, there are resources that can help.

Women-owned businesses, large and small, face many of the same challenges, just on different scales. When women business owners teach and learn from each other, we can all support each other’s growth.

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