In 2004, Mississippi ranked 47th in the nation in the percentage of women-owned businesses. But the gap isn’t that great when you look at the national average, 26%, compared to Mississippi at 23%, says Marianne Hill, senior economist for the Institutions of Higher Learning.
Hill said the number of women-owned businesses in the state increased between 2000 and 2002, but progress then stalled.
“The percentage of women business owners was really growing rapidly there for a while, but a lot of things have been slowing down lately,” Hill said.
While owning your own business might be the dream of many women, the reality is that it isn’t especially well paying. Women who are self-employed earn less on average that those who aren’t.
“Women who work full-time year around for themselves have the lowest median earnings of all full-time workers,” Hill said. “Studies show self-employed women tend to be older, married, have no young children, and are likely to be covered by another person’s health insurance. Self-employed women are more likely to work part time, and often will combine this work with another kind of job. Oftentimes they might be independent contractors, which means don’t get health care and other fringe benefits.”
Some of the most successful women who go into business for themselves get experience at the management level of a similar business before striking out on their own. But even with experience, getting a loan can be difficult. Hill said women sometimes don’t have the collateral needed to get loans.
With any business, lack of capital can be a problem, said Donna Sims, president of Bank Plus, Madison/Ridgeland.
“Often it is hard to chisel out what belongs to the woman and what belongs to the household,” Sims said. “A lot of times we have issues there. If it is a business woman and she is married, there’s always the difficulty distinguishing what assets are available to inject into the business. From time to time over the years talking to women about loan opportunities, they want this to be their thing. They don’t want to mix married assets into it. Sometimes we have some issues there in trying to determine what is actually available to inject into the business.”
Sims said they definitely have seen more women going into business, which she finds very refreshing. “They bring a different level of energy to the table,” Sims said. “They seem to be somewhat more passionate towards the business. Women have a big drive to succeed, and typically do.”
Sims recommends cultivating a good relationship with your banker. Communication is critical. The worst thing a business owner can do is put off communicating with her banker.
“Open lines of communication are important,” Sims said. “It is always good to have your banker into your business to see first hand how the operation goes. The banker needs to go on site and see what the business person does everyday.”
In order to protect the investment, small business owners should be adequately insured. Some overlook the need for insurance. Perhaps they rent from someone else, and don’t realize that a fire or other calamity that wipes out their inventory could leave them heavily in debt.
“They think it won’t happen to them,” said Robbie Bratcher Cross, owner of The Insurance Mart Inc. in Jackson. “If capital is limited to start the business, they will cut out what isn’t necessary. But insurance is a very necessary thing because of the uncertainty of things happening in the world. They need insurance for inventory, and now liability is a very important part of insurance. If someone walks into your premises, they can slip and fall and sue you.”
Many people borrow money to go into business. Or else they invest their life savings. Cross said that if that investment isn’t protected by insurance, “you could certainly go very deep in the hole. Most banks do require you to furnish insurance. But if you invest your lifetime savings and don’t have insurance, you could lose everything. No matter what type of business, you need coverage for what you have invested.”
Cross advises even people who have businesses in their own home to consider insurance. There is business insurance available for the home.
Adele Lyons, executive director of the Gulf Coast Business Technology Center, said she is seeing more women start small service businesses they can grow from their home while doing other things with their lives such as raising a family.
“There are more women starting that way than jumping into a traditional form of business getting an office or retail space,” Lyons said. “Especially here at the incubator, we see a lot of people who have started as home-based business and are ready to move to more a professional basis. Home can be a lot of distraction. It can be a great place, a way of keeping costs down, but you want to make sure people can also keep focused on business.”
Doing the details
Being detail oriented helps women, particularly when developing business plans. “Women just seem to be a lot more specific, a lot more detailed and more nervous about taking on a new task,” Lyons said. “They may also be more hesitant to move forward. It can be good to be cautious, but not so cautious that you don’t follow up on a business venture that may be a good idea for you.”
Janita R. Stewart, district director of the U.S. Small Business Administration (SBA) in Mississippi, said women have unique strength they bring to business.
“Women are generally inquisitive and persistent,” Stewart said. “They tend to see things through from the beginning to the end. Those are some of the strengths women instinctively bring to the table. That can definitely be useful in terms of starting or expanding their business. Being results oriented can only serve to enhance their capabilities to be successful in their own businesses.”
She said the pitfalls for women going into business are the same as for anyone, with failure to plan being one of the most common reasons for business failure.
“Do the research that needs to be done first before delving off into the business,” Stewart advises. “Develop a solid plan about where you need to go, and the steps needed to get there. Seek advice and counsel of people in the know such as people in the SBA and the Service Corps of Retired Executives. There are also helpful programs available through the Mississippi Development Authority.”
For free online information, Stewart recommends the Women’s Business Center Web site http://www.onlinewbc.gov/.
Contact MBJ contributing writer Becky Gillette at email@example.com.
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