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The Stages of Business Growth: Startup
As a bank founded on the entrepreneurial spirit, women business owners are a group that City National Bank is especially passionate about supporting. Breaking down the barriers that limit women's ability to prosper as independent business owners is critical to our collective economic future. That's why we undertook a research initiative to better understand the experiences of women entrepreneurs.
This article is adapted from a portion of that report. Download the complete report or read more articles based on it here.
When a business owner has made the decision to turn their business into reality and undergoes the rigorous planning needed to start a business, the pieces are in place to officially launch. This is called the startup stage.
Traditional childhood experiences taught many women to be quiet observers rather than active participants. That changes when a woman starts a business.
During the startup phase, women business owners must learn to advocate for themselves, their companies and employees. This is an opportunity for them to stand up for their beliefs and decide who they want to be as managers, colleagues and friends. Often, these women want to be an example and serve as better bosses than the ones they've had in the past.
“One thing that owning a business has taught me is that you have to have a voice, and you have to be heard. If you do not ask, you do not get," said Lisa, the founder of a New York-based toy retailer that we interviewed.
Women business owners do this while also handling the many details and challenges of running a company. They make sure they have inventory, fine-tune business strategies and put their ideas into action, while also dealing with the financial stresses of starting a new company.
But even at these early, exhausting stages, successful women business owners tend to take a longer view, putting in place a culture and support system for themselves and their employees.
“Work-life balance is important to me. I want to give the same experience to the employees as well," said Nancy, the leader of a multi-million-dollar agricultural technology firm. "I think that comes from the values of being a woman."
Knowing What You Know & Don't Know
Women entrepreneurs at this stage start to understand their strengths. They know what they're good at and where they need additional help.
New skills a business owner may need to be open to learn about include:
- Payroll systems.
- Lead generation.
- Career planning.
- Making the most out of referrals.
“Many entrepreneurs already feel comfortable with marketing and feel comfortable with product and product development, but they have a lot of gaps on the legal side and the financial side in particular," said Amanda, a venture capitalist who invests in early-stage companies.
Surviving the Lean Years
The startup phase also tests business owners' perseverance, since many companies don't turn a profit for several years after the launch. Many business owners live off personal funds and loans during this period. Some look for ways to save money, like working from a relative's or parent's home. At this stage, typically any profits go right back into the business.
However, many new business owners could make better use of their revenues during this phase with the help of someone to advise them on cash management strategies. Access to quality business advice continues to be one of the most significant barriers facing women business owners. Finding those resources is a crucial part of the future success of a business.
This is also the stage where many companies start looking for outside investment. A reliable network of peers and mentors is vital through this process. For women, entering this typically male-dominated landscape can be intimidating.
These women must prove themselves to people who doubt their business because of their gender. A reliable network of peers and mentors is vital through this process.
An Emotional Rollercoaster
The startup phase is full of ups and downs. Business owners often find themselves swinging wildly from confidence to self-doubt. Those who financially support family members may feel especially anxious as they face setbacks, wondering if they were selfish to choose entrepreneurship over a steady paycheck.
For this reason, it's important to develop a support system of key employees, suppliers and fellow business owners. They can serve as a sounding board and a reality check on the progress of a new company. But while most business owners face obstacles, growing a company can be its own reward.
Unfortunately, the startup stage is where many business journeys end. The harsh realities of the business world can often prove too much, even for the best ideas. At a financially challenging time, it's common for women business owners to begin to doubt themselves at this stage.
“Starting the business was surreal. I didn't really have any support. I didn't have anyone to say, 'Is this normal? Should I do this?'" said Jamila, the owner of a furniture restoration company. “I just refused to be stopped."
Those who see success at this stage were able to find a way to work through that doubt, our research showed – whether it was finding their grooves as business owners, leaning on a network of mentors and partners, or just plain perseverance.
The startup stage is where a lot of realities start to set in for women business owners. As they look to kickstart their business, increase revenues, hire new employees and market themselves publicly, they will undoubtedly come up against new obstacles, and situations they've never faced before.
However, despite obstacles, a well-planned business founded on solid ideas and principles can survive — especially with a dedicated and passionate owner behind it.
What's next? The Growth Stage.
Download the full report, From Inception to Succession: The Six Stages of Women's Business Ownership, here.
The Stages of Business Growth
This article is for general information and education only. It is provided as a courtesy to the clients and friends of City National Bank (City National). City National does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of City National. Please cite source when quoting.