Choices to make: a woman in business or a woman-owned business? As an entrepreneur, who happens to be a woman, she has some unique decision-making to do as she enters the business world. She has to decide, somewhere along the way, if she wants to restrict the majority of ownership of her business to women or if she wants to ‘share’ the ownership with her male spouse/partner. From a legal perspective, advantages given to woman-owned businesses are typically restricted to enterprises with at least 51 percent ownership by women. From a practical and strategic perspective, she needs to choose whether to make ‘women-owned’ an essential element of her business operation and her marketing of products or services. From an emotional perspective, she must decide whether she is making a statement for herself as a woman and/or for women in general.
Or does she become a business owner by putting her name to a business while her husband, brother, father, (or hired ‘Controller’) etc. runs the business, and she (the woman of the ‘Women Owned Business’), works approximately 13 hours per week behind a closed door in her office while sending emails to all of her friends, PTA contacts, book group contacts, etc. only becoming involved in order to insure that her personal weekly income maintains a steady amount or bringing into the office her partner/spouse when there is a situation that she feels is too trying to deal with (which, unfortunately, is most situations)?
I should give credit where credit is due: when forced to work, most women who have agreed to have a ‘Women Owned Business’ for their husbands/partners/brothers/sons do, work, that is; when the bottom line is affected enough to impact the weekly monies taken from the business….I would like to both quantify and qualify this….this scenario notated in the above paragraph has only been observed by me a few times or observed by other professionals that I know a few times; mostly, the woman is dedicated to grow the business for her own benefit as well as the benefit of those working with and for her. In fact, in most instances, I’ve had the privilege of working with women from a ‘Women Owned Business’ who have their respective partner/spouse work for them and they direct the flow and growth of the business. This is what I truly classify as a ‘Women Owned Business’; not a business that was formed as a ‘Women Owned Business’ in name only and the ‘Woman’ owner has the ‘men’ in her life make most of the decisions, especially the tough ones: fire/terminate/let-go an unwanted employee, reprimand the employees when she is too timid to do so, protect her from dealing with adversities in times of stress and basically deal with any unpleasantness that is inevitably associated with a small business, especially the financial ones.
Women are a growing force in the business world, but if they own a company, they may still struggle to obtain bank loans. A ‘Women Owned Business’ may have millions of dollars in sales but have been rejected for Lines of Credit for very small amounts of money, even with a 20 year old company. Companies that do not have receivables, do not own real estate seem and have a past history with abuse of trust fund taxes seem to be the hardest hit. Women business owners have long been at a disadvantage in getting loans. Some states actually required husbands or other male relatives to co-sign loans until the practice was outlawed by the Women’s Business Ownership Act of 1988. I remember when I sold my first home after I married, in the State of New Jersey in 1986, I was required to have my husband sign the transaction documents when the house was sold even though we had only been married a few months and I had purchased the home 5 years prior when I was single. I still resent that!!!
At one time I believed that a woman from a ‘Women Owned Business’ would have an easier time in today’s political climate to get a loan but it is not the case; especially those who have a poor credit rating from personal expenditures, have poor history with credit/payments for the business and have tax liens filed either personally or against the woman as the business owner, or simply have any type of negativity on a credit report. It is much harder to obtain a loan for a woman with poor to mediocre credit as a business owner than it is for a male business owner to obtain the same type of loan.
Another issue that women business owners have to deal with when requesting bank loans, financing, etc. is presentation. In many instances the woman has no idea of what comprises the numbers in the financial statements that are being delivered to the bank/credit facility with which they are dealing. They do not take the time to become involved in the preparation of the paperwork; they don’t have the proper documents, financial statements, etc. and they are unable to answer the questions properly. Many women are unable to explain in detail why they need the money and for what they will use the money. The problems may stem from a lack of confidence that would encourage them be aggressive about their companies from a marketing or financial perspective. Individual bankers may be uncomfortable lending money to a woman business owner when the banker does not understand the intent or scope of the business in question. A woman business owner needs to get the point across to the bank that they are a good bet and the bank will get their money back in the future.
A woman owning a business should seek and obtain legitimate advice from an accountant, attorney or other expert prior to seeking financial assistance from any lending institution. A woman business owner needs to recognize that their personal credit score is tantamount in the money lending/borrowing process and spending time to correct and alleviate any prior or existing negative credit issues will enhance the woman business owner’s ability to obtain financial funding in the future.
I applaud all legitimate women business owners and I will support the methods taken to maintain the status. Remember, a business does not need to be profitable to obtain the certification or designation, however, it should be respectable and honest.