Coutts Woman

The power game

‘The land of opportunity’.  At long last, America has begun delivering on that promise for women entrepreneurs.  Today, research reveals that women are setting up privately-held businesses twice as fast as men in the US.  And as well as being far more likely to stay in business, these companies are creating jobs at twice the rate of all firms and growing profits faster than them.

These are some facts that Heffernan, a five-time CEO, uncovered while writing her first book, The Naked Truth: A modern woman’s manifesto about working and what really matters.  Back then, she was doing interviews for a chapter on women who left traditional corporations to set up their own businesses and found the interviewees ‘incredibly inspiring’.

“Then, I came across this extraordinary data during my research for that chapter showing the enormous explosion in women-owned businesses across the states.  It revealed that women entrepreneurs were suddenly responsible for half of privately held companies,” she said.  “This has never happened before.  It is the biggest business story of our age, and I thought it was amazing that nobody was writing about it!”

So Heffernan did.  She interviewed over 100 women running new businesses, old ones, big ones and tiny ones spread right across each of the major industrial sectors in the US.  And she published her findings in her second book, How she does it: How women entrepreneurs are changing the rules of business success. 

“Writing the book allowed me to peek at a lot of truly exceptional businesses run by truly exception women.  This is not just baking cookies.  It’s a very big deal.  Women are running businesses, running them well and confident about what it is they want from other companies they do business with.”

One of the most interesting things, Heffernan points out, is the trickle affect this growing market segment is having on mainstream business in the US.  Big accounting and law firms for example, are now under pressure to have female partners in order to win business from these women-owned businesses.  “If firms don’t have female partners, they don’t tend to get their business.  So traditional corporations now have a choice to either capture some business by adapting to it or lose out completely.”

A new phenomenon?

Although women-owned businesses have been on the up in the US for some time now, it was information gathered by the American congress on gender-owned companies that boosted awareness of just how successful women entrepreneurs have become.

“That data was incredibly important because until they had it, no body thought there was a single woman who had a company worth more than a million dollars,” she says.  Instead, the data revealed just how economically important women entrepreneurs are to American prosperity.

That was also the point when people started taking women seriously and federal dollars began being spent on women in business, says Heffernan.  “The information confirmed that women have incredible economic power and, because they are business leaders, they’re also starting to have tremendous political power.”

“If US law firms don’t have female partners they tend not to get business from female-led companies”

Now, Heffernan is turning her sights to the UK, and asking the Treasury to gather similar gender data here via company tax returns on women-owned businesses.  “Because no body collects that data in the UK, we have no idea how many women-owned businesses there are in this country.  And that allows stereotypes to trivialise women’s businesses.  We collect ethnic data on businesses that enables people to get help and visibility, but not on women’s businesses.  It’s the one simple thing that makes the biggest difference.”

What difference has the information made directly to women in the US? One difference, according to Heffernan, was making them feel less isolated.  Until the research was revealed, many women had no concept of how dynamic a field women entrepreneurship is. 

“The nature of entrepreneurs is to work hard.  They are very busy people without time to socialise and often feel quite isolated.  Women even more so because, on the whole, their mothers weren’t running companies, nor are many of their school friends.  So, talking to these women and spreading their success stories really changes other women’s ideas of what they can do.”

The research also helped break down the mental image women had of a ‘normal’ entrepreneur.  Their imagined them as 24 year old pre-adolescent boys with acne.  “My interviews confirmed that there is no stereotypical entrepreneur.  One woman I interviewed started her company at 16, the oldest started hers in her 80s.  It’s fantastic!” Heffernan laughs. 

Though age and industry may vary, Heffernan found some strong common characteristics amongst them. “I found women become entrepreneurs because they have a desperate sense that they have something to prove.  They want to prove how good they are.  To do that, they just need a lot of drive and stamina.  And women have stamina by the boatload,” she insists.

Future impact?

With the growth in women entrepreneurship looking set to continue in the US – and hopefully in the UK, with the help of some data - there will be a dramatic impact on ‘traditional’ business models, according to Heffernan.  A new style of leadership, for example, looks set to be the initial outcome.

In her research, she discovered that women-run businesses are great places for men to work.  “The men working in them are seeing how different things can be done, and they love it!  With the new style of father looking to spend more time with their children, they are desperate for different leadership styles and ways of working. 

“And while none of this stuff is ever linear - we will see progress and backlashes - I definitely think the norms are changing.  And the accepted notions of leadership are becoming very very much more female as a result,” concludes Heffernan.

How She Does It: How women entrepreneurs are changing the rules of business success by Margaret Heffernan is published by Penguin.