There are fascinating statistics in the 2016 State of Women-Owned Business Report from
• Women are starting 1,072 new businesses per day;
• Women-owned businesses generate $1.6 trillion in revenues;
• The number of women-owned firms has grown at five times the national average (45% versus 9%);
• Since 2007, 79% of new businesses have been started by women of color.
Having transitioned from employee to entrepreneur in 2007, I’m excited by the growth in entrepreneurship among women. I’m excited by the growth prospects of my own businesses and humbled by how much I’ve had to learn (and still am learning) along the way. Here are five a-ha moments I wish I knew when I started:
Cash is king (queen, jack and spades).
Revenue goals take longer than you think, and start-up costs are higher than you budget. Clients can be slow to pay. Pricing is easily underestimated. For all these reasons, when you’re new, cash flow is much more important than revenues and even profits. When cash is coming in, your business lives to fight another day. You can figure out how to increase revenues, rein in costs, and widen profit margins. If you run out of cash, even if your business is on the right track, you may run out of time to cure your problems.
Key lesson: Stay on top of collections, insist on payment up front and keep a reserve.
Marketing is not sales.
A memorable name, catchy tagline, beautiful packaging, captivating logo and other marketing tools are important but only start the sales process. Networking at events and even meeting people one-on-one are critical to building a pipeline but still only start the sales funnel. Sales is presenting your offering to people who are willing, able and ready to buy. Everything else leading to, even contributing to, that sales meeting happening, is marketing not sales. You want to emphasize sales over marketing. You can’t be afraid to talk money, ask for the business, and get a firm commitment from your prospective customers. Track your time, and delineate marketing versus sales to ensure you’re not overweighting one over the other.
Key lesson: Make sure you’re actively selling, not just marketing and then never finalizing deals.
Publicity is not sales.
Media mentions can draw a lot of prospects into your sales funnel. A new business can gain instant credibility with the right press attention. However, like marketing, publicity gets the sales process started but may not be enough to close the actual sale. My main business is as a consultant/ coach, so I’m in the professional services business, and it takes prospects time to get to know me and trust me. One media mention, regardless how prestigious, will rarely do it.
Key lesson: Good publicity may feel good, but you still need to follow up over time and finalize the sale.
Doing the work is not even half the battle.
Marketing and publicity are still worth focusing on because you have to keep prospects coming in. Sales is its own activity and critical, as I’ve mentioned. In addition, you need to stay on top of collections (see point 1 on the importance of cash!) and make sure you’re on top of any regulatory or tax filings your business requires. I haven’t even gotten to actually doing the work that you’re selling. (If it’s a product that you sell, and you’re not making firsthand, you still need to source it from somewhere.) When you’re running a business, there’s the work related to running the business and the work that the business offers to the market. Many times, especially when you’re starting, running the business takes more time, effort and energy than fulfilling the market orders.
Key lesson: Plan your time, effort and energy and set your pricing to account for all this additional work.
Real-time experimentation in the market trumps the experts.
I’ve gained a lot from planning and from entrepreneurship training, but real-time market feedback – what your actual customers are actually willing to pay for – is where the most valuable lessons come, and projections are often wrong. Therefore, you want to get in your market quickly. If you’re thinking about offering a particular type of program, offer a pilot test to existing customers. If you’re thinking of a new feature for product, create a prototype and pre-sell it. Try to get buy-in from your target customers before spending a lot of time developing something or agonizing over whether to launch.
Key lesson: Launch quickly and course-correct along the way.
There are many more lessons, of course, with a-ha moments occurring almost daily. That’s part of the fun and also much of the anxiety – there is always more to learn, always so much to do. I thought I would be used to the hustle of selling by now. (It’s still a challenge.) The mix of services I initially offered is different than where we focus now (and I have to remind myself to experiment over agonize). Who knows what the next years will bring, but based on the growth of women-owned businesses, I’ll have plenty of company on the journey!
