16 Aug 2012
By Heidi Staseson
Recently, in my small-business research I’ve come across an interesting phenomenon: women who shy away from the fact they’re bringing in a buck…or four.
For the most part, I’ve noticed it with respect to women whose businesses involve a community-spirited enterprise. If, the company mission, for example, is more altruistically aligned, the business owner wants to ensure her integrity’s intact with stakeholders.
But, according to experts I’ve interviewed, even some for-profit female business owners tend to hush and blush rather than shake their money-making magic—as if it’s “no big deal” or embarrassing for them to be seen as public profiteers even though their male counterparts seems to toot their horns with dedication.
To punctuate this recurring theme, some female business owners decry the use of catchy adjectives published to describe their profit-raising prowess. They feel that pointing to profit will make stakeholders wince; that it unwittingly implies the community-spirited enterprise will be overshadowed by the “bringing-home-the-bacon” effect more than goodwill.
I want to better understand this modest mentality. If one’s new enterprise is clearly a market-savvy frontrunner for success, why would one want to downplay that cachet—especially if it’s also clear she’s a giver?
Not only can she now more easily afford to donate to her charities, but as a plus she can also buy that that longed-for luxury item, she can do big and fun things with her family and friends or, she can even shop at Winners like always.
Why feel nervous or concerned that a reader/stakeholder might perceive your hardworking, honest and entrepreneurial efforts to be anything less than laudable?
I asked a few business owners, both men and women, new and seasoned, to tell me, using unabashed adjectives, their thoughts on profit and where money fits into their entrepreneurial endeavours. I asked them precisely what some might find so abhorrent about having the nose for money, the financial fortitude, the Midas Touch, the Ca-Ching! factor?
“Classic entrepreneurs know that passion and profits go hand-in-hand in building and sustaining a successful business,” says Karin Abarbanel, Montclair, N.J.-based co-author of Birthing the Elephant, a start-up action guide for women.
While passion may fuel a start-up, she says, it’s the profits which keep it “going and growing as passion deepens and evolves.” However, Abarbanel says just as many women entrepreneurs under-price their products and services, relative to their male competitors.
“They also often underplay their profit-generating abilities,” she notes.
But, she explains, if passion and profits go hand-in-hand, so do profits and altruism. “You can’t give back unless you have something to give. Successful women entrepreneurs need to embrace this as fully as men do.”
Whether an owner heralds her rewards from the rooftops depends on the type of industry she’s in, says Matt Hill, president and CEO of Los Angeles-based Webxu, a roll-up of companies in the customer acquisition, social media and mobile space.
For example, Hill says if her business supports a “community-for-a-cause” such as veganism, the mere mention of raking in the dough might not be the best way to describe the company’s profit ability. If you’re a true vegan and a true naturalist, he adds, then trumpeting your turnover will likely bring on embarrassment or shame to your stakeholders because it poses a conflict situation.
Hill, 38, is well aware he’s playing for the capitalist cause—though he playfully calls himself ‘business boy’—a profiteer at that. And he sees no shame in someone exalting her riches from pitching healthy or vegan products to consumers, although he acknowledges she’s taking a risk if her buyers expect her to walk the “granola” talk.
“My goal, as a CEO of public companies, is to create shareholder value,” says Hill.
“I’d still say I eat hotdogs even though I know shouldn’t!” says Hill. “But I understand that if you are a true vegan and you truly, truly feel passionate about that, you probably would feel badly—it would feel unnatural to profit off of [that culture],” he adds.
“You’d be seen as an outsider because the general perception would be: ‘they’re just trying to capitalize on [us],’” he explains. “And if you’re not profiting and you’re creating a better living environment, a green or greater health-related business, then it’s more like ‘this person’s a real contributor to our cause.’ ”
On the other hand, Hill points to some of the large and successful health-food grocery chains such as Whole Foods or Wild Oats: “They were not launched by Donald Trump-type people; they were launched by people who really had a passion for community awareness and eating healthy products and all of that,” he says.
While some of these health-conscious companies are true profit-raising champions, selling more oat than gloat, some are also current hot media topics subject to chastisement by grassroots groups that question their actual altruism.
Nevertheless, Whole Foods is an example of a company that’s profited from its commitment to providing quality health food to consumers—and its success didn’t come overnight.
“They’re definitely doing something right. I don’t care what anybody says,” remarks Pauline Duncan Bonneau, Q.C., who runs a high-profile family law practice in Regina.
“They’re profits are great—they’re one of the few American companies that are increasing both their revenues and their earnings per share. And the major shareholders of that company are contributing in a huge way to the wellbeing of their staff and to the community—to help people eat better, to enjoy their shopping experience and to have staff that seem incredibly happy and service-oriented.”
No shame in the profit game
Through the years as a business journalist, I’ve interviewed some inspiring and inventive folks and this much I’ve learned: being an entrepreneur is about having passion for your product to the point you want to nurture it and grow it and feed it AND yourself exceedingly well.
That stands if you’re a man or a woman; entrepreneurs want to make money. True start-ups reap profits—it just gets in the owner’s blood. And many of them do a lot of different things with the money they make—from putting it back into the business to building homes for the less fortunate to building extra playhouses for themselves and their families.
Certainly, making money from your business shouldn’t—and doesn’t—negate the fact you can be simultaneously altruistic, a do-gooder of do-gooders. Besides, stakeholders like to eat well all the same.
The passion and oomph that got you to this point clearly outshines the money itself.
“I make no bones about the fact that I make a good living doing what I do,” asserts Duncan Bonneau.
“I’ve worked hard to create value for people so that they want to pay me. My services should be one of the best investments they ever make and I should be able to make money because I’ve figured out how to provide excellent legal services to people,” she says, adding that her clients understand the value they’re getting through her counsel and if they don’t feel that way then they should find a different advocate.
Duncan Bonneau, also known as Regina’s ‘Love Lawyer,’ sees being a female business owner as nothing but a bonus because she can market and promote herself differently from her male colleagues. But she understands that some people, particularly some women, are squeamish when it comes to defending their dividends.
“People really grapple with how they should feel about money and what they should do with money,” she says, noting that some women view money synonymously with greed, corruption or other negative stereotypes.
“Women struggle with that a lot more because we’re always supposed to be ‘nice,’” says Duncan Bonneau.
“And the perception out there has been that nice people shouldn’t have a lot of money and it’s always the ruthless ones [that have it]—that are typically male—who don’t have many emotions; or they’re not kind and caring people etc.
“But that’s not a true stereotype,” she posits, pointing to Warren Buffet and his gargantuan gifting of $40-billion US to the Bill and Melinda Gates Foundation.
Duncan Bonneau adds that impressive business efforts, whether you’re male or female, ought to be recognized by the owners themselves. “[Owning a business] is very stressful and takes a lot of creativity,” she explains.
“To be successful in business requires a huge sacrifice. So if someone benefits from it, why shouldn’t his or her efforts be rewarded? I don’t understand why that’s a concept that’s so distasteful to people.”
Praising Profits: Small Business Entrepreneurs share their thoughts:
Bob Diener, president and co-founder, getaroom.com, Miami, Fla.
“Business is all about making money—that’s why you’re in it. After making a profit, you can give back by helping charities in your community or donating a portion of proceeds toward a charity. I’m a strong follower of the biblical principal of giving 10 per cent of your profits to charity. But that’s after you have made the profit.
If you’re a charity it’s different but you’re in a business to make money; that’s what it’s all about. Now, how you share it with your partners and so forth, that’s different. But the overall business should be [clearing a] profit. If you’re a for-profit enterprise, that’s what you should be doing.”
John Milne, president Breakwell & Company (a communications services startup), Toronto
“One should never be embarrassed by success. Identifying your goals—and then charting a path to achieving them—is key to the success of any business.
Altruistic goals should be mapped out separately from the financial objectives of an undertaking. In most cases, they will require two distinct sets of tactics.
Financial success enables the achievement of one’s personal or altruistic goals. This may seem simplistic or “just plain obvious,” but it’s often overlooked.”
Brandon Cornthwaite, business developer, Samson Controls; new business owner: DJNV (a music production/DeeJaying company), Calgary
“You go into business because you’re passionate about what you’re doing and you want to make money with that passion. You definitely do it for making a profit.
And I work during the day to make a profit as well! My goal, at the end of the day, is to make money for not only myself but for the company I represent. And then I use the extra money to give back to my community through volunteering and other organizations that I belong to. It goes to both [my] corporate responsibilities in my community, through charities and so forth—to be able to give a little bit extra where I haven’t been able to give in the past.
And it’s about improving my lifestyle as well. The ultimate goal is to have my money working for me instead of me working for money—to make the extra cash so that down the road I can spend time with my kids and travel and own real estate in warm locations around the world—so I don’t have to spend all my life in -40 degrees in the winter time!”
Matt Hill, president, WEBXU, Los Angeles
“Before you have the profits, it’s a more mysterious, ‘it-will-come’ type of thing. People buy into the mystery of your business value on a higher-multiple basis. They say “this company’s not even making a profit but they’re doing such a bang-up job—they’ve raised this money and they have the space and this thing could be worth $150 million.”
But once you become a profitable company —which is a great thing—you’re no longer are an exciting, sexy, sizzling story of mega-bazillion-dollar ‘company-to-be.’ Now you’re among all the other zillions of profitable companies that are judged based on the multiples.”
As soon as they produce a profit everyone looks at the numbers and revenue and they say “well they only did $5 million profit last year that means probably they’re only going to be a $75 million company—not a $150 million company.
This is why a lot of companies run into problems because they try to sell the dream when they’re [actually] living a dream—they don’t have any profit—they have a great business plan, they’re building things and they look great, they have millions of users on their website—but they’re not making any money.
They raise money from venture capital groups that come in and say, for instance, ‘yes, we think you are worth $1 trillion,’ and then invest based on that value. After trying to take the company public, the public market says, ‘It’s great that you’re this awesome, sizzling, Pandora-Facebook-Zynga type of machine—but how much money do you make? Are you profitable?’
And when the public company says ‘yeah, we’re worth $5 million,’ the market responds: ‘well you’re not worth $150 million; you’re actually worth $75 million based on that $5 million.’ And that’s generous!”