15 Aug 2012
By Tannette Johnson-Elie
Women-owned businesses have battled back from the economic fallout by cutting business costs, targeting the right customers and working harder. Now, experts believe there are key lessons to be learned from these recession-tested entrepreneurs.
Many of today’s women-owned businesses are led by entrepreneurs, who despite limited choices available to them, managed to weather the great recession and come out of it stronger, new research shows.
And, their resiliency provides valuable lessons on economic recovery for today’s small business owners. What’s more, the tenacity of these women business owners should provide help for the ailing economy.
That’s the findings of a recently released survey by Chase Card Services, a division of JPMorgan Chase Co., the National Federation of Independent Business (NFIB) and the Center for Women’s Business Research. The Small Business: Lessons of the Recession survey provides one of the first in-depth looks at how women small business owners fared during the recent recession.
“The strong survival skills of the woman business owner really kick in when the going gets tough,” says Charisse Witherspoon, president of the Chicago chapter of the National Association of Women Business Owners (NAWBO.
The survey found that 45 percent of women-owned businesses concentrated primarily on cutting business costs, while 31 percent sought to increase sales. Women business owners surveyed indicated that regardless of which strategies they employed, their real volume sales remain lower than when the recession started in 2007.
In a recession, sales automatically will go down, so as a business owner, you have to reduce costs at a greater rate than you revenue is decreasing. Essentially, this is universal to any business as most companies have to cut costs in a recession.
“We see women-owned businesses tightening up, working more and harder and definitely targeting even more strategically their market,” said Wendy K. Baumann, president and chief visionary officer (CVO) of the Wisconsin Women’s Business Initiative Corp. (WWBIC).
Consider Susie Falk. She is the owner and president of The Falk Group Public Relations, a full-service public relations firm based in Milwaukee with an office in Wheaton, Illinois.
Falk launched her business in 2008, and ran into financial difficulties after she used up her line of credit. Realizing the severity of the 2009 recession, she reduced her overhead, and eliminated two full-time positions. In addition, Falk downsized her office space and negotiated a favorable lease arrangement.
“I dramatically cut back on printing. We resigned unprofitable accounts,” she said. “We developed our own public relations program that helped promote the agency to new audiences and potential clients.”
The resiliency of women business owners such as Falk could provide the answer to job growth and economic recovery, says Baumann, of the women’s business center in Wisconsin.
“Women are more likely to start up a new business than to buy an existing business, so that’s good for the nation in terms of startups and job creation,” Baumann said.
Women entrepreneurs now are starting to hire again, the study revealed. Nearly half of women-owned businesses are now increasing staff (45 percent of those surveyed), compared to their worst quarters during the recession when 36 percent of women small-business owners reduced their payrolls.
Despite having to make tough choices to deal with the recession, nearly 60 percent of women entrepreneurs are confident in their business decisions, the survey said.
The ability of women entrepreneurs to recover from the recession shows they are resourceful and able to succeed, despite the odds.
“After four years of a recession, I now feel empowered and strong, less naïve,” said Falk. “I look forward to continuing to grow the business.”