Stepping Out

Lois Silverman says there are a lot of misconceptions - some might call them myths - about businesses run by women.

For starters, there's the notion that most of these businesses were started by the women's husbands and fathers, said Silverman, founder and chairwoman of the Commonwealth Institute, the Boston-based non-profit group that provides assistance to women entrepreneurs and CEOs. Then there's the perception that these are all service businesses, ranging from staffing companies to advertising agencies.

And then there's the widely held belief that most women start their own businesses because they hit a glass ceiling in the corporate world and become frustrated with the progress of their careers - or lack thereof.

These attitudes, though mostly off the mark, have been allowed to thrive because until lately, there was little known about women business owners and CEOs, said Nan Langowitz, faculty director for the Center for Women's Leadership at Babson College.

"It's a very understudied population to say the least," said Langowitz, who, along with Silverman, authored what is considered the first comprehensive analysis of woman-run businesses in Massachusetts.

And their research, which identified the top 100 woman-led companies in the state based on total revenues, may serve to dispel many of those myths, said Silverman. She told BusinessWest that women are starting businesses not because they're frustrated, necessarily, but because they have the same desire for achievement and independence that men do.

In short, women are starting their own businesses because they have the confidence and, increasingly, the wherewithal to do so, said Dianne Fuller Doherty, director of the Mass. Small Business Development Center's Western Mass. office. "Women today have grown up watching other women run their own businesses," she said. "It wasn't like that a generation ago."

And while service companies do make up nearly 22% of woman-led businesses, a surprising 19% of the ventures are in the high-technology field, while 14% are in construction. And fewer than 25% of the businesses now run by women are considered family businesses passed on to them in some form.

The study reinforces trends that women are starting new businesses at a higher rate than men, said Nangowitz, and it shows that women still face a good number of challenges, including a lack of female mentors and, in some cases, limited access to capital.

BusinessWest looks this month at the landmark study and the broader subject of women making the transition from employee to employer.

The Latest Word

Kitty Axelson-Berry says she didn't wake up one day and decide that she wanted to start her own company. But over a period of time after she left her job as managing editor of the Valley Advocate, she came to the conclusion that she simply didn't want to work for someone else anymore.

"I just didn't feel enthusiastic about going back into the work environment," she said. "I did apply for a few jobs, but my heart wasn't in it. When I kept asking myself, 'what's next?' I decided I would find a way to work for myself."

And she did, creating an industry as much as she did a business.

She eventually hit on a concept that would blend her writing and editing talents with a passion for history. Her business, Amherst-based Modern Memoirs, which she started in 1994, creates personal histories of individuals. For rates ranging up to $35,000, she will create a detailed history of a person or family.

Getting the business to turn a profit has been a struggle, but Axelson-Berry has succeeded in part because she has helped create interest in her concept and grow it as an industry. She founded the Association of Personal Historians, which now has a membership of well over 200, and has worked hard to earn press for this profession in outlets ranging from The Wall Street Journal to The Today Show.

She's learned most lessons about running a business the hard way, but has relied on groups that offer help to small business owners, particularly the SBDC.

Axelson-Berry's story is similar to that of many women business owners and CEOs, said Doherty, who told BusinessWest that a blend of desire, confidence, and even technology is allowing more women to go into business for themselves.

"It's a combination of a number of factors," she said of the reasons why more women are becoming business owners. "In a way, it's part of a natural progression. Women needed the desire, the skills, and the confidence to know they could do it. They now have all these things, so they're taking that next step."

Silverman concurred, adding that among the ingredients, desire and confidence are perhaps the most critical, not only in the decision-making process, but also in the factors that eventually determine the success of the ventures they start.

The Babson/Commonwealth Institute report revealed a great deal about woman-owned and -managed companies, she said, replacing conjecture with some of the first hard data on the subject.

Through interviews with the leaders of more than 200 woman-led companies across the Commonwealth, researchers were able to put together a profile of female business owners, identify their motivations, and list their challenges and the factors that matter most in operating their companies. Among the highlights:

* The top 100 woman-led companies contributed $4.8 billion to the economy in 2000. The company at the top of the list, Cumberland Farms, led by CEO Lily Bentas, had $1.6 billion in revenues.

* The average size of the 212 companies surveyed is $24 million, and they employ 172 people on average.

* More than three-quarters (76%) of the companies surveyed have been in business for more than seven years, and 31% have been operating for more than 20. Nearly half were started within the past decade.

* 21% of the businesses surveyed provided professional services, while 15% were in high technology, a surprising 14% in construction services, 12% in travel, and 6% in manufacturing. Among those in the Top 100, 23% were in technology, 21% in professional services, and 17% in construction.

* As expected, most of the companies in the top 100 are in the Greater Boston area; however, eight are from Western Mass.:

- (24) Realty World Sawicki, Amherst, managed by Ernestine Sawicki, $37 million;

- (38) Bassett Boat Co. Inc., Springfield, Diane Bassett Zable, $20 million;

- (54) Lewbar Imports Inc., West Springfield, Susan Pollack, $12 million;

- (68) ANH Inc., Amherst, Betty Kravetz, $8.4 million;

- (74) Country Jeep, Feeding Hills, Sandy Cosenzi, $7.9 million;

- (77) NEPM, Wilbraham, Kathryn Selvia, $7.4 million:

- (100) New England Pallets and Skids Inc., Ludlow, Cynthia A. Kawie, $5 million;

- (100) Randall Farms Inc., Ludlow, Karen Randall, $5 million.

Taking Charge

Pollack, who operates the Mercedes dealership started by her father, told BusinesslAlest that women generally don't receive ample credit when they take over a family business. The perception is that the business was handed to them and they did little to earn the title they possess.

But succeeding generations in familyowned businesses often preside over periods of strong growth and expansion and often are not recognized for those efforts, especially when those managers are women, she said.

And if those women managers are married, and their husbands are at all involved in the business, he is generally assumed to he the one in charge, she continued, listing yet another of the problems women face in the business world.

But things are improving, said Pollack, who operates in an industry dominated by men.

"For years, people thought I was a secretary here," she said. "Getting an office helped somewhat, but a lot of people are still surprised to find out I'm the president of the company."

Pollack said she became involved in the business somewhat by chance - she had just received her MBA and was mulling whether to attend law school when she accepted her father's invitation to help the office manager install a new computer system and then operate it. "And I never left."

But she had always worked at the dealership "hen she was young and anticipated that she would someday manage it. "I think I always wanted to be in business," she said. "I had that desire to manage a business and do something with it."

And according to the Babson/Commonwealth Institute study, she's not alone in that regard. Indeed, one of the more revealing aspects of the study was the question of motivation for starting one's own business, said Silverman.

At the top of that list is the desire for personal achievement and autonomy, she said. "Women want to see things grow. They want to start something and see it succeed. In that respect, they're no different from men."

As for autonomy and independence. those factors are important for all women, but especially those trying to balance a career and a family, she said. "They don't mind working 80 hours a week, but they want it to be their 80 hours.'*

Both Silverman and Doherty downplayed the glass-ceiling theory about Women starting their Own ventures, and the study backed up that view. More than half of the chief executive owners surveyed reported that hitting a glass ceiling was "barely or not at all important" as a motivation for deciding to start their businesses.

Doherty acknowledged that some women are frustrated in their efforts to move up the corporate ladder, but said there are usually other reasons that prompt them to venture into entrepreneurship. And in Western Mass., few women are even in a position to experience a glass ceiling.

But Mary Fitzer, a West Springfieldbased consultant and therefore an entrepreneur in her own right, said frustration with the corporate culture is, indeed, a factor for many women - and men - who decide they want to work for themselves.

"A lot of people are frustrated by the slow pace of change in a large organization; they're tired of seeing their good ideas not go anywhere," she said. "That's why some of them decide they want to be in charge of their own fate."

For many women, the obstacle is more of a sticky floor than a glass ceiling, she said. "It's not that they can't advance," she said, "it's that there's no place to advance to."

Another factor in the equation is continued layoffs and downsizings in the corporate environment, Fitzer said, especially in the current economic slowdown.

"Many people - both women and men - don't want to put themselves in a dependent position," she said, noting that unlike a generation ago, many people have the wherewithal to remove themselves from the corporate equation.

Indeed, many women have taken early retirement packages and used those funds to start their endeavors, while the proliferation of two-income families has given many couples a cushion that might allow either spouse to venture into entrepreneurialism.

Technology has also played a critical role in the growth of woman-owned businesses, said Doherty. The advent of the personal computer, E-mail, and wide-area networks has allowed many people to work in the home. This gives women challenged by decisions about whether to pursue a career or a family the opportunity to do both.

Western Mass., with its high quality of life, has become a haven for telecommuters, she said, many of whom are running their own businesses out of their homes.

Both Langowitz and Doherty said that another key factor in the rise of entrepreneurship among women is role models.

A generation ago, there were few women who owned businesses and equally few in top-level positions, said Langowitz. As the number of women business owners and managers has grown, younger generations see entrepreneurship as a viable option, not a lofty dream.

Doherty said her husband and first daughter went to the same law school. Her husband's class had three women, while her daughter's was half female. "That's a huge change," she said. "Most all of the women in my daughter's class have gone on to become lawyers, executives, or business owners. They're all role models for the next generation."

Once they're in business for themselves, women display a great deal of resourcefulness that can help them stay in business, said Doherty. "They're not afraid to ask questions, and they're not afraid to seek help," she explained. "Men can be resourceful, too, but women are definitely more inclined to seek out help and to use the resources available to them."

The Bottom Line

While technology, role models, and early retirement packages have all helped prompt women to choose the entrepreneurial route, Axelson-Berry says the biggest factor - and in many cases the biggest challenge - is confidence.

Even after starting her business - she brings on her first fulltime worker this month - and forming a professional association to help grow it, she still struggled to say, with a firm dose of confidence, what she did for a living. "When you can do that, when you can spit it out with confidence, then you're on your way," she said.

Such confidence, along with the desire to succeed and achieve a large measure of independence, is prompting more women to take the road less traveled. And as they do, the myths about women in business are quickly being dispelled.