More women than ever before are starting up businesses, currently at a rate faster than men. Technically this should be celebrated. Sadly, however, according to research just over half of these women are failing to make themselves an income, which kind of takes the fun out of the party.
When I asked Naomi Simson, the Founding Director of RedBalloon, what could explain this, she said it was impossible to say. She didn’t want to paint all of those women with the same brush but she did acknowledge it is a lot of people whose livelihood is on the line.
Rather than focusing on what women might be doing wrong as entrepreneurs, let’s focus on the things they could do doing right.
1. Know your purpose, customers and market
Naomi Simson didn’t just create a new product when she launched RedBalloon; she created a new market. She was able to do this because she had a clear sense of purpose and knew what her business was about.
“When you have a clear sense of purpose, you know what you stand for and your values, and you surround yourself with people all towards that purpose then more likely than not you are going to be successful,” said Simson. She believes it is also fundamental to listen to your customers and deliver products or services they want and need. She said you should also know the opportunity within in your market.
2. Keep your overheads low and know your business model
When you are first starting out it is easy to want to look the part and spend a lot of money doing so. But this doesn’t necessarily set you up for success. When Simson first started RedBalloon what she looked at all the time was her business’s overheads. “Every single dollar was spent on customer acquisition, marketing and promotion,” said Simson. “I worked from a low cost base, meaning I was using second hand computers and working from home.”
Simson also believes to be successful you need to have a really clear understanding of your business model. “Understanding how money flows through the business is really, really important.”
3. Get your business off the ground… then grow
Abbie Widin, author, speaker and business coach at One Extra Zero, is so passionate about helping women entrepreneurs make more money from their businesses she interviewed a lot of women who had built seven-figure businesses from scratch and then wrote a book about it – Catapult: A Woman’s Guide to Building a 7-Figure Business.
From her research, Widin found there were a couple of different stages to building a successful business. “The very first [stage] is just getting yourself up and off the ground with enough income to keep the lights on… [focus] on what activities are going to generate income.” Widin advises that businesswomen should be spending 90 % of their time on income producing activities from the very beginning. This means doing actual client work, or working to find more clients.
She also said while it is important to have a little bit of a plan, at the same time you need to get out there and let the market tell you what’s valuable and what’s not. “Getting your first 10 clients through the door is really the most critical thing you can do in the early phase.”
4. Develop the characteristics needed for success
Interviewing so many women who had built seven-figure businesses taught Widin a thing or two about the common characteristics shared by successful female entrepreneurs. Here are the top four characteristics, according to Widin:
– You need to be courageous and willing to make mistakes.
– You need to have a bias towards learning because every success that you want is probably outside of your comfort zone. And you need to be able to learn what you need to do differently to get to that place.
– You need to be client focused.
– You need to be tenacious – have a strong connection with the vision you want your business to be and you need to go out there and get it.
5. Charge what you are worth
The money side of any business is critical but makes some entrepreneurs uncomfortable. Widin explained that some women don’t like setting fees, talking about fees, raising fees or asking people for money. Andrea Kerekes, Founder and CEO of Access PR, a Sydney-based PR agency with strategic alliances in New York and London, also thinks the money side of business can be a downfall for women.
“I think women in particular, and I did it too, undervalue themselves in charging what they are worth,” said Kerekes. “In the beginning you do things at a lower rate to get runs on the board but there comes a point where you really have to start charging what other people charge and not be afraid to do that.”
And what else is needed to build an empire? An entrepreneurial spirit that never dies. “RedBalloon is a fabulous gift, it is a great brand, but it is only great if people keep buying RedBalloon vouchers,” said Simson. “So I’m not finished [promoting RedBalloon] yet… I still feel I’m in the start-up phase even though we’ve delivered 2.5 million experiences now.”