In 2005, when she launched Make Mine a Million $ Business, Nell Merlino set an ambitious goal: getting 1 million women-owned companies to $1 million in annual revenue by 2010. Merlino, president of Count-Me-In for Women's Economic Independence and the creative force behind Take Our Daughters to Work Day, admits that goal was overly ambitious. But she says she hasn't given up on advocating for women-owned businesses. She spoke to Smart Answers columnist Karen E. Klein recently; edited excerpts of their conversation follow.
Karen E. Klein: When I spoke with one of your program's backers in 2006, you hoped to have 1 million women entrepreneurs over the $1 million barrier by this year. What happened?
Nell Merlino: We didn't make it! We have 38 that have cumulatively crossed that barrier and we've lost very few women off that list. But we've also raised $10 million and helped women generate $100 million in revenue and create 6,000 jobs.
Between 1997 and 2006, businesses that were fully or majority women-owned grew at nearly twice the rate of all U.S. firms, but the numbers haven't budged much since then. There are still just over 10 million women-owned companies in the U.S., generating around $1.9 trillion in annual sales. What happened?
The 2008-2009 recession slowed a lot of people down. For a lot of women, their top goal over the last couple of years was just to survive. Fortunately a lot of them got through it and did better than they expected.
What is Make Mine a Million doing now?
We do regional events all the time that attract many participants. And in 2009 we did a $100,000 online competition that 1,500 women entered. The top 54 companies grew 59 percent in 2009 over 2008 and increased their employment on average by 113 percent.
What made those 54 particularly successful?
We looked at that and it turned out they did everything that we recommended. They came to at least half of our webinars, they did 15-minute telephone speed-coaching sessions, and they got business coaches as we suggested. They were looking for guidance and they took it.
The woman who won the competition, who runs a technology security business, grew from $500,000 to $1.5 million in annual revenue and hired nine new people. She used to think that the way to grow was to put more of her time into the business. Her breakthrough was to hire someone full-time to help her get new contracts.
Is hiring a stumbling block for women business owners in general?
We did a survey of women-owned companies doing from $150,000 to $700,000 in revenue and 87 percent said they want to grow. But 54 percent believed they could grow without hiring anybody else.
Why the reluctance?
We've found that many women are afraid to hire. There's a fear that you won't be able to meet payroll and you'll have people relying on you. There's a fear that if you cede control, you don't know how others will manage your brand.
Most women have to manage family and business, so they believe that if they keep their businesses small, they can handle it all. But the opposite is true! If your company gets bigger, you can break off large pieces and hand them off, letting go of the day-to-day work yourself. Creating new products and selling are usually the strong suit for women entrepreneurs. They should do more of that.
Only about 20 percent of U.S. companies with $1 million or more in revenue are women-owned. And 6 percent of male-owned firms are at $1 million compared with 3 percent of all women-owned firms. What is holding women entrepreneurs back?
Not knowing enough about their finances and where their company stands financially. And not enough big thinking. For instance, the cupcake business is really big now. Do you want a retail shop, or do you want to figure out how to sell to Starbucks (SBUX)? The ones who do best are those who figure out how to sell to as many customers as they can find. Women coming out of corporate jobs know they need to find corporate customers, but the others do not.
How has the lack of credit affected women business owners in the last couple of years?
Access to capital and credit for women sucks worse than it ever has. All of the things the [Obama] Administration has done have been helpful, like the 90 percent guaranteed loans. And some women have done well with community banks, which have a lot of women employees and not just gray-haired white men. They are the ray of light at the moment. But the bigger banks have really shut down on small business.
Are you still optimistic about women in business?
I'm always cautiously optimistic. I keep seeing it. We've learned that it costs about $6,000 to $8,000 to move a woman-owned business to $1 million. That's for the coaching, the webinars, and those things, not the funding. But it's really not much! By 2045 I'd like to have a million women-owned businesses at $1 million. I'm going to do it! I may be dead, but it's going to happen.