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Women Demonstrate They Have What It Takes to Build Million Dollar Firms

Submitted by: AT&T Inc.

Categories: Human Resources & Diversity

Posted: Feb 02, 2004 – 11:00 PM EST

 

Feb. 02 /CSRwire/ - WASHINGTON, DC - Women are demonstrating their business savvy and financial sophistication by building substantial and growing businesses that generate one million dollars or more in annual revenues. According to a new study, The Leading Edge: Women-Owned Million Dollar Firms, conducted by the Center for Women's Business Research and underwritten by AT&T and KeyBank, women-owned businesses that generate a million dollars or more in revenue distinguish themselves through their use of multiple funding sources, sophisticated financial management practices, and utilization of technology.

The study specifically explores the characteristics, experiences and business practices of women-owned firms with $1 million or more in revenues and compares them to women-owned businesses that have not reached the million-dollar revenue mark.

"This study confirms that women can and do play in the big leagues. The vast majority (73.0%) of these $1 million firms are owned and operated by the founder and many (14.5%) achieved that level of success in five years or less," said Myra M. Hart, Chair, Center for Women's Business Research and Professor, Harvard Business School. "These businesses contribute significantly to our economy in terms of revenues and employment. Most are on their way to becoming even bigger with more than half (55.3%) reporting sales growth over the past three years, in spite of the economic downturn."

"Women-owned businesses with $1 million plus in revenues make greater use of sophisticated financial strategies than do smaller women-owned firms," said Maria Coyne, senior vice president, Women-Owned Business Initiatives, KeyBank. "These leading edge businesses typically are different from other women-owned businesses in that they use a greater number of funding sources (4 sources vs. 3 sources) and vendor credit (59.9% vs. 33.6%). In addition, they are more likely to utilize a greater array of financial products available to them, including commercial business loans or lines of credit (56.3% vs. 30.9%), and business credit cards (75.3% vs. 53.3%). At KeyBank, we are committed to helping women business owners make the most effective use of these funding sources, and the financial tools and products that support business growth."

Women owners of million dollar firms are also more likely than owners of smaller women-owned firms to use a variety of "bootstrapping" strategies to reduce the need for outside capital including negotiating better terms for their accounts payable (49.7% vs. 30.3%), speeding up customer payments (48.7% vs. 26.3%), and leasing equipment (32.7% vs. 17.1%).

Their financial sophistication extends to financial reporting. They are more likely than the smaller women-owned businesses to produce financial reports such as balance sheets, income statements, cash statements, sales forecasts, and break-even analyses. They also produce many of these documents more frequently.

The sophistication women owners of million dollar firms exhibit when they address financial issues is also evident when they address technology issues. "In technology, these leading edge women business owners are setting the pace for all other businesses," said Don Herring, who leads the AT&T mid-sized markets division. "They are more likely than the women owners of smaller businesses to say that the Internet and e-commerce play an important role in their businesses growth strategy (57.7% of women owners of $1 million firms vs. 31.2% of other women owners.) Furthermore, more than half (56.0%) of the women-owned $1 million firms use their Web site for e-commerce."

"AT&T is dedicated to helping all firms realize the benefits of these vital business resources."

Other factors which distinguish the $1 million women-owned businesses from smaller women-owned businesses:

  • More likely to use formal advisors such as accountants (40.7% vs. 28.9%), lawyers (15.7% vs. 6.6%), and boards of directors (13.3% vs. 4.6%), and less likely to use informal financial advisors such as family or friends (21.7% vs. 35.5%);

  • More likely to belong to formal business organizations (81.3% vs. 60.5%);

  • Less likely to be in the service sector (26.9% vs. 51.0%) and more likely to be in wholesale trade (17.0% vs. 3.8%), construction (13.4% vs. 3.3%), and manufacturing (12.3 vs. 4.8%);

  • More likely to have a customer set that includes corporations, other businesses and government contracts at the local, state and federal level. About one-third (33.7%) of the women business owners of $1 million businesses indicate that large corporations are a part of their primary market compared to 11.8% of other women business owners. Seventeen percent (16.7%) of the women-owned $1 million firms report that state or local government is their primary market compared to only 4.6% among other women business owners. Fifteen percent (14.7%) of women business owners of $1 million businesses report that the federal government is part of their primary customer base compared to just 3.3% of other women business owners; and

  • Nearly 2.5 times as likely as other women-owned businesses to be certified as a woman-owned business.

    "There is no single 'formula' for reaching and surpassing the $1 million revenue mark, but the experiences of these women who have already done so provides guidance to the next generation of up and coming women entrepreneurs," said Hart.

    The report, The Leading Edge: Women-Owned Million Dollar Firms is available for $90. (Discounts are available for Center corporate partners and NAWBO members.) For further information, contact: Center for Women's Business Research, 1411 K Street, NW, Suite 1350, Washington, DC 20005-3407 Phone: 202-638-3060, ext. 10
    Email: info@womensbusinessresearch.org, Web site: www.womensbusinessresearch.org.

    ###
    Center for Women's Business Research

    The Center for Women's Business Research is the premier source of knowledge about women business owners and their enterprises worldwide. The Center's mission is to unleash the economic potential of women entrepreneurs by conducting research, sharing information and increasing knowledge about this fast-growing sector of the economy.

    Since 1989, the Center for Women's Business Research has "painted the picture" of the women-owned business landscape by providing original research documenting the economic and social contributions of women-owned firms. This knowledge transforms entrepreneurial opportunities for women worldwide and is changing the face of the global business environment. The Center shares its knowledge with policy makers, financial institutions, corporate leaders, government agencies and the media through research reports, press releases, newsletter publications, seminars, speaking engagements and worldwide on the Internet at www.womensbusinessresearch.org.

    AT&T

    For more than 125 years, AT&T (NYSE "T") has been known for unparalleled quality and reliability in communications. Backed by the research and development capabilities of AT&T Labs, the company is a global leader in local, long distance, Internet and transaction-based voice and data services.

    KeyBank

    Cleveland-based KeyCorp is one of the nation's largest bank-based financial services companies, with assets of approximately $84 billion. Key companies provide investment management, retail and commercial banking, consumer finance, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. The company's businesses deliver their products and services through KeyCenters and offices; a network of nearly 2,200 ATMs; telephone banking centers (1.800.KEY2YOU); and a Web site, www.Key.com, that provides account access and financial products 24 hours a day.

    For more information, please contact:
    Valerie Hasselbach
    AT&T
    +1-908-234-8072

  • For more information, please contact:

    Amy Wease Center for Women's Business Research
    Phone: +1-202-638-3060, x12
    Jennifer Raynor KeyBank
    Phone: +1-216-689-5273

     

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