Women Entrepreneurs and Growth Capital

From Money Matters
by Molly Tschida Brennan, in NAWBO's Entrepreneurship Trilogy

 

As you begin to think about growing your company, remember there's no right or wrong path to follow. Each business has unique characteristics and goals, meaning no two will approach growth in exactly the same way. And there are nearly as many ways to grow a business as there are businesses themselves. Maybe you're looking to penetrate a new market, for example, or add a new product or service, or buy a new facility. It could be you're expanding overseas, or thinking about acquiring a competitor's business. Or possibly you've landed a big client and simply need working capital to fulfill the contract. Or maybe you aren't sure what your plans are, but think your business has the potential for more.

Indeed, the only commonality among growing companies is the reality that growth doesn't happen on its own. Business owners make a conscious decision to stretch a little farther, demand a little more, and push a little harder. It's a challenging endeavor--for both the company and its owner--and to do it right requires careful planning and preparation. Poorly planned growth can wreak havoc, or worse.

So before you start down the road to growth, you need to make sure you're prepared. You need to anticipate the challenges growth will present, and know how you'll respond to them. First and foremost, that means understanding the financial tools that can help you achieve your goals. In the following chapters, we tell the stories of women entrepreneurs who used different financing mechanisms to fund their growth. By sharing their experiences, along with advice and insight from some of the country's foremost experts on business finance, we hope to de-mystify financing options, and help you determine what source of capital is best suited to your needs. It's important to note that this book is not an exhaustive guide to financing growth, but rather the next lesson in your ongoing education. The aim is to give you the tools and knowledge necessary to analyze your own capital needs and financing options. Read on to for your first lesson in positioning your business for growth.

Case Study

Lopez Garcia Group
, Dallas, Texas 

Wendy Lopez,  Founder and CEO
Year launched: 1988

The male-dominated engineering industry is not typically thought of as fertile or even hospitable land for women entrepreneurs. But Wendy Lopez is not someone who is easily discouraged, nor readily pigeonholed. And so this woman of Hispanic origin, the child of parents with grade-school educations, decided in her teens that engineering was her career of choice and entrepreneurship her vehicle to success. Today, as CEO of the Dallas-based LopezGarcia Group, Lopez oversees a multidisciplinary engineering and environmental-planning firm with nearly 200 employees spread among nine offices in three states. Her company has been recognized as one of the fastest-growing engineering firms in the country, and as one of Dallas-Forth Worth's leading growth companies.

It's a long way from the one-woman engineering shop she opened in 1988, yet Lopez is neither surprised nor impressed by her own success. She has a relaxed nature and an easy confidence about her, and is matter-of-fact about the steps it took to get the LopezGarcia Group where it is today. Those steps included landing more and bigger clients, using her women- and minority-owned business status to access government contracts, acquiring another firm, and, finally, merging with a competitor. While the methods varied, her willingness to grow her company and her openness to business opportunities was constant, even when it meant treading into the unfamiliar waters of business finance. "I knew engineering," she says, "but a lot of this business stuff I was learning on the fly."

But Lopez proved a star student. In 2004, she was named the NAWBO Woman Business Owner of the Year, and was honored as a "Rising Star" by the Business Women's Network. Previously, her company was recognized as Employer of the Year by the Women's Transportation Seminar, and was cited as one of the top 50 women-owned firms in the Dallas-Forth Worth area.

Her start, however, was much more modest, and not nearly so high profile. After receiving her undergraduate and graduate degrees from the University of Louisiana, Lopez landed a job with a Dallas engineering firm. After only a few years, the company decided to close its Dallas offices, and Lopez had to decide if she would move with the firm to Fort Worth. It was the nudge she had been waiting for, and the decision was easy. "I had always thought I would own my own business someday," she says, "and so I said to myself, 'You're almost 30. Now's the time to do it.'"

And with that, Wendy Lopez & Associates was born. Of course, the "& Associates" was more for show than anything else, because for more than 18 months it was just Lopez--no associates, no employees, and nobody to share the task of starting and growing a business. Eager to generate revenue, but aware that her company wasn't large enough or well-known enough to land major contracts of its own, she decided she would focus on the plentiful subcontracting work doled out by the area's larger engineering firms. (These "prime" contractors receive contracts directly from municipal and government clients, then subcontract a good portion of the work to smaller firms.) Lopez also knew that, as a minority and woman business owner, she could qualify for contracts targeted to those owner groups. So she spent her days making connections and marketing herself to larger engineering firms, and her nights working to complete the jobs she landed.