Business Boom or Bust?

June 6, 2011
Business Boom or Bust?
“I left my corporate job to start my own company, which was a lifelong dream,” says Alison Newton, a product development consultant. “I quickly realized our economy just wasn’t making the turn around as quickly as everyone had thought.”

Newton ended up closing her business – and she’s not alone. Nearly 70 percent of new businesses are still around in their second year, but nearly half are gone by year five.

Women-owned firms seem particularly hard hit, says Babson College Professor of Entrepreneurship and Center for Women’s Business Research board member Patricia G. Greene. But don’t tell her these women have “failed.”

“Women close their businesses for lots of different reasons, for instance: the kids are going to school and they want to do something different,” says Greene. “The misuse of failure stats puts a damper on the whole situation.”

So, why do women’s businesses go under? Greene says a lack of capital gets blamed too often. “It’s usually a lack of fit between what the woman brings to it, what she knows and what she actually likes doing.” In other words, the opportunity, resources and the woman’s leadership may not be enough if they aren’t paired with a solid business model, capital, passion and support.

What do women owners need to know?

“Reach out and get help early,” says Greene. “Use all the resources that are out there.” Organizations like Woman Owned and publications like Inc. (as well as PINK, of course!) provide timely, concrete tips to take you from opening up shop to hitting that million-dollar mark that only 1.8 percent of women-owned firms reach.

Bonus PINK Link: Ready to try your hand at ownership? Here’s how to quit your day job.

By Cynthia Good 

“Life is a great big canvas, and you should
throw all the paint on it you can.” Danny Kaye