Why I Am Optimistic About Women in Business
A survey by the Women Presidents' Organization shows that companies owned and run by women tend to be cost-effective and successful - thus setting an encouraging example for example for younger women coming out of college
By Dr. Marsha Firestone
Founder, Women Presidents’ Organization
With all the uncertainty in the business world right now, I look with satisfaction on one bright spot: the success of entrepreneurial women. Even as the Dow is sinking, women entrepreneurs are growing their businesses and taking compensation right up there with the Inc. 500 executives.
Just as important, women business owners are proving to younger women coming out of college that owning their own businesses is the fast track to success.
I have facts to back me up. The Women Presidents’ Organization, a nonprofit group of women presidents who have guided their businesses to annual sales of at least $1 million, commissioned Strategic Surveys International of New York to ask WPO members across the country about their companies and how they pay themselves.
In keeping with the WPO’s mission to be a creative resource for women entrepreneurs and draw attention to their achievements, this survey was the first to focus solely on women who own and run their own companies and who gross millions of dollars million annually. The survey drew 174 respondents, or 52 percent of the national membership. (WPO membership has since grown, and the respondents would now reflect 38 percent of the total membership.)
SSI found that in 2000 the median compensation for WPO members was $216,000. This compares to $215,000 for CEOs of the Inc. 500, 93 percent of whom are male.
The survey also found that the women-owned businesses experienced revenue growth in 2001 despite the economic downturn, with average pre-tax revenues of $9.9 million versus $9.8 million in 2000. During the same period, however, women presidents cut their average bonus compensation almost in half, to $44,267 from $92,993.
Overall the survey showed that entrepreneurship is the great equalizer for women in the economy. No other avenue in business gives you the opportunity to level the playing field and to pay yourself what you are really worth to the company. It is the one place where I see women coming out on equal terms with men. And what’s particularly encouraging is that the success of these women is having a direct impact on the plans of younger women coming out of college. I saw another recent survey that said more than half of business-oriented women graduating from college had a goal of one day owning their own business.
To me it’s no surprise that WPO members, who are among the most successful businesswomen in the country, are far more likely to own their companies than do male executives who earn the same amount of money. Of the respondents to the SSI survey, 41 percent were the sole owners of the companies. Of Inc. 500 CEOs, only 24 percent were sole owners. The median equity stake of women in the SSI survey was 84 percent; the Inc. 500 CEOs was 51 percent. Only 16 percent of WPO members owned less than half of their companies, compared to 35 percent of Inc. 500 CEOs.
Why do women business owners have more at stake than their male counterparts? The survey shows that nearly all of the women (84 percent) started the businesses themselves. In general, also, the women are older and more experienced than their Inc. 500 counterparts. Their median age was 48, compared to 41 for the Inc. 500; median years in business was 17 versus 8; median number of employees, 15 versus 64. More than half of WPO member companies (58 percent) are in business and professional services; 11 percent are in manufacturing.
Thus the profile of the survey’s average business owner shows an experienced, service-oriented businesswoman in the prime of her career, who is leading a relatively small team of employees toward sustained growth in a down economy, and who, even while paying herself the same as her counterpart CEO in the Inc. 500, will voluntarily slash her bonus for the overall health of her company.
That’s the kind of business person, in my opinion, this country could use a lot more of. If present the trend continues, and if younger women pick up on the success of WPO members around the country, I’m confident that entrepreneurship will become an ever more popular choice for women everywhere, because, as this survey shows, it is indeed the great equalizer for women.
Dr. Marsha Firestone is founder and president of the Women Presidents' Organization for women whose businesses annually gross over two million dollars. The Women Presidents' Organization is currently operating 80 chapters nationwide and in Canada. Dr. Firestone was previously Vice President of Women Incorporated and of Training and Counseling at the American Woman's Economic Development Corporation (AWED). Prior to her involvement in women's economic development, she oversaw all operations and established educational direction as president of a for-profit educational institution. Her career also includes positions as National Executive Director of the Women's American ORT, a volunteer organization with a membership of over 150,000; a full-time faculty member of the American Management Association Competency-Based Management Development Program; and a faculty member at the City University of New York and Adelphi University.
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