Wednesday Linkblogging

• This New York Times article about Latino microbusiness in the States offers some interesting statistics from a new study from the Census Bureau:

From 1997 to 2002, there was a 31 percent increase in the number of businesses in the 50 states and the District of Columbia owned by people of Hispanic origin. That was triple the 10 percent gain in the number of all businesses in the country during that period, the most recent for which the Census Bureau has issued such data. In 2002, nearly 200,000 of the 1.6 million Hispanic-owned businesses had at least one paid worker other than the owner.

Hispanic-owned businesses accounted for 7 percent of the 23 million businesses in the country in 2002 — a percentage likely to have risen since then, given population shifts. The Census Bureau has estimated that as of last year, the Hispanic population was 44.3 million, or 15 percent of the nation’s total, making it the country’s largest ethnic or racial minority.

New York led the states in growth of Hispanic-owned businesses in the 1997-2002 period, with a 57 percent increase. It had a total of 164,000 such businesses in 2002 — not as high as California, with 428,000; Texas, with 319,000; and Florida, with 267,000, the Census Bureau reported.

• The Jamaica Observer has an interview with Gladys Famoriyo, who just won an award from the European Federation of Women Business Owners

for her contributions in developing and training women over the past decade through seminars, programmes, articles, organisations and humanitarian work. She was also the recipient of the International Women's Day Award (2007) in recognition of her work as a business owner, author, speaker and coach.

Check out her book Overcoming Emotional Baggage: A Woman's Guide to Living the Abundant Life.

• The Indianapolis Star has an article about Lorraine Ball's third book Business Map: A Guide to Business Success for Small Business Owners.

• Kathy Marshack at American Chronicle has some opinions about why women business owners are not always taken seriously:

I don't think that people are discriminating because of gender necessarily. It's probably more because they don't know how to relate to women business owners. Women have different values and these values are showing up in how women design their businesses.

... This blending of family and work roles is commonly seen in couple-owned and family-owned enterprises. Yet women who attempt to blend both roles must fight invisibility. ... Sometimes women reinforce this invisibility themselves. In an effort to maintain her role as wife and her role as business owner a woman may feel she has to take a "backseat" to her husband.

• Trading Markets thinks that banks will tighten already restrictive loan policies for startups and small businesses.

• Denise at biztipsblog.com talks about how women business owners can help save the environment:

Women spend $.85 of every dollar in the marketplace, which is a lot of spending power. The goal is for every woman to convert $1,000 of their regular spending to green spending...buying environmentally friendly products and services. A million women can shift $1 billion dollars and make a huge impact on how big and small businesses view and respond to their own environmental impact.

What does this mean for you as a business owner? Well, you're a consumer too, right?

• Loho 10002 has a sharp opinion about the SBA delaying implementing 2000 regulations awarding 5% of federal contracts to women. (scroll all the way down)

Microbusinesses as Assets

By: Karuna Jaggar, Women's Initiative Director of Public Policy and Research

 

CFED's Assets and Opportunity Scorecard for California gives us a C overall, although we get an A for business development opportunities.

California's citizens face mixed prospects when it comes to their opportunities to build and preserve assets. On one hand, the state's households have the 11th highest average net worth in the country. On the other, the state ranks 36th in asset poverty — the proportion of households without sufficient assets to subsist above the poverty level for three months if income were to be interrupted.

Long-term financial independence requires assets as well as adequate income. Families must be able to both cover their basic needs, and have enough in reserve to keep them from slipping into poverty when circumstances change unexpectedly.

Furthermore, assets are critical in obtaining adequate income to begin with. For instance: education and even car ownership are strongly linked to earnings. Anecdotal stories from Women’s Initiative’s clients indicate that owning assets often leads to additional asset acquisition: home-equity loans pay for children’s college, stocks provide down payments on homes or capital for business growth, and so on. It's this combination of sufficient income and assets that allows families to be truly self-sufficient in the long term.

Businesses are a unique and powerful type of asset. They increase income, in the way that education does, and they also increase in value over time like real estate. Microenterprises typically have very low start-up costs, making them a relatively accessible asset for low income individuals, particularly compared to buying a home.

For asset-poor individuals with no credit or poor credit, starting a business is a uniquely accessible way to build on work experience, ingenuity and vision to grow an asset.  This can then be leveraged to acquire additional assets. Starting one’s own business can be a critical strategy for low income individuals to build powerful assets that are transferable across generations, helping to break the cycle of inter-generational poverty.

While asset poverty is a grave problem for all California families, current research has shown that women and people of color own disproportionately fewer assets than men and whites. Strikingly, the median net worth of a white-headed household in California is nearly $151,000 while that of a minority-headed household is just over $16,500. There is a need for additional research on the linkages between microenterprise and assets, with particular focus on inequalities linked to race and gender.

Data analysis of the most recent Women's Initiative client outcome data shows an overall trend of increasing wealth, with asset growth outpacing liabilities resulting overall gains in net worth. Average wealth at program entry is $9,288. Survey respondents report that their wealth increases a remarkable four-fold to $38,626 within twelve months.

Linking Domestic Violence and Economic Independence

By: Karuna Jaggar, Women's Initiative Director of Public Policy and Research

 

W This Microcapital article about a microfinance project in South Africa underlines the links between poverty, domestic violence, and AIDS:

IMAGE provides women with short term business loans of up to USD 1300 operating on the presumption that an increase in earning power will encourage women to be more vocal at home, confronting unfaithful husbands about issues such as condom usage.
Domestic violence and Aids infection have long plagued the eight villages outside of Burgersfort, Limpopo Province, South Africa where IMAGE currently operates. According to Dr. Pronyk, “Of the approximately 400 women receiving loans, between 36 and 71 percent reported having been in a violent relationship.” Not unrelated is the HIV/ Aids infection rate, which identifies one out of every three adults in the region as HIV positive. Image findings report that most women in the region accept their husband’s extra- marital affairs as common practice. IMAGE claims most wives avoid confronting their spouses about such behavior, leaving their health at risk, as the male is typically the only wage earner and thus perceived as the unique authority in the household.
IMAGE believes the solution is to increase women’s authority at home by increasing their earning power outside of the home via a microfinance programme.

Although here in the US AIDS and reproductive control are not firmly linked to women's economic independence, the link between poverty, poor health, and risk of violence for women and children is well established. The Kaiser Foundation 2004 report shows that low-income women are twice as likely to report being in fair or poor health as higher income women. The American Cancer Society estimates that cancer survival rate of poor individuals is 10 to 15 percent lower that those of other Americans. And the US Department of Health and Human Services links poverty and issues related to violence as significant factors in women’s health.

At Women’s Initiative we see that self-employment is a powerful component of any multi-pronged strategy in the prevention of and recovery from domestic violence. Self-employment can increase a woman’s economic independence through increased earnings and greater economic control. In addition, owning a business and being one’s own boss allows domestic violence survivors -- many of whom have been controlled in virtually every area of their lives during the abuse -- to be in control of several important areas of their lives.

Nearly one-third of American women (31%) report being physically or sexually abused by a husband or boyfriend at some point in their adult lives. In addition to physical and sexual assault, many survivors face economic and other forms of abuse. Examples of economic abuse include controlling or even stealing money; fostering dependency; and making financial decisions without asking or telling the partner.
Many women taking our classes have told us of the impact of their lack of access to even small amounts of money: taking the bus to class was enormously problematic, let alone coming up with the $25 registration fee or finding childcare. The impacts of this epidemic are far-reaching, affecting each area of the survivors’ life and in turn that of her family and community

Based on these interviews, we believe that our program can help interrupt domestic violence through:

1. the supportive group environment and training we give focuses on reducing isolation during and after the program: a common barrier for many of our ALAS clients, who are immigrants with limited or no English-language skills and little knowledge of resources available to them;


2. financial literacy training, which is critical for women who have faced economic abuse which has limited their access to or knowledge of household finances;


3. financial independence through business ownership which allows women to increase their income and gain control over earnings, thus expanding her options, including to escape domestic violence.

Our work clearly illustrates the linkages between a woman’s health and her economic independence. Through our multi-pronged business management program, Women’s Initiative empowers women to achieve economic self-sufficiency. Along the way, women build self-esteem, financial literacy, and strong networks of other supportive women. By providing culturally competent business management and personal empowerment training, Women’s Initiative helps prevent domestic violence before, during, and after abuse has occurred.

Wednesday Linkblogging: Women Entrepreneurs

• Apparently, Atlanta-based Girls with Goals have declared October to be Women in Small Business Month. What an awesome idea! Hope this spreads.

• Indiatimes.com has an article on the coming of age of Indian women entrepreneurs.

Bhardwaj estimates women entrepreneurs at a tenth of the Indian entrepreneur universe — currently there are 1.3 million SSIs and 9.1 million registered SMEs — in India, with the percentage growing every year.

• The Jerusalem Post has a fascinating article about Beduin woman entrepreneur Miriam Abu-Raki'ek, owner of Daughter of the Desert cosmetics firm.

To describe Abu-Raki'ek's life as a single woman entrepreneur as "untraditional" would be an understatement. "It's been very difficult with my family," she says, acknowledging the pain on all sides. "Even before I went to England, I had to deal with the issue of marriage. My father was very good, in that he funded my studies. But when I came home, he insisted that I marry, and I didn't want to do that. I refused. Since I couldn't do what he wanted, to me that meant I couldn't take money from him, either. I still live with my parents, but right after England I started working to be able to pay for whatever I needed. I did all kinds of work - translating, selling Avon products, working in people's homes. But all the while, the pressure on me to marry was increasing. All I could do was say, 'I'm here. I'm standing on my own. I can't do what you want me to do, but I won't ask you for money, either.'" 

• Entrepreneur.com blogs has a post by Wendy Piersall on how giving back to other women in your community can further your business.

My life made a dramatic shift almost 4 years ago when I made the decision to make “contribution” one of my highest values. I found that when in sales, if I focused on getting the deal, I never did nearly as well as when I focused on serving my clients.
And as we chatted about making ‘giving’ a high priority in business, we both agreed that although it can be a difficult mindset to attain, letting ‘contribution’ lead your business decisions creates the most rewarding and successful companies we had both ever known.

• A recent Boston women entrepreneurs showcase highlighted "mompreneur" Christine Ingemi, whose invention of safe-volume earbuds for audio players has made her some money.

• I have no idea why this would be "weird & funny", but the "Daily Weird & Funny Posts" blog posts about the first woman to top the list of wealthiest people in China.

• A new survey by RSM McGladrey and the National Association of Women Business Owners profiles today's women entrepreneurs. Thanks to entrepreneur.com.

Friday Linkblogging

• This analysis of microcredit as an opportunity for Latin America (by the Council on Hemispheric Affairs) is actually an excellent summary of the global microcredit discussion as it is today. Go Read!


• Small business lender ACCION Texas is busy organizing the country's first Summit on Microfinance for November 6-7 in San Antonio.


• Speaking of summits, Making Cents International just pulled off the first Global Youth Microenterprise Conference in Washington DC in early September!

The youth population, aged 12 to 24, has reached a historical high of 1.5 billion.  Youth are the entrepreneurs, workers, leaders, and parents making an impact today, and they will be responsible for the economic and social development of tomorrow.  Many youth around the globe however continue to lack access to quality employment and education opportunities. Without a background in financial literacy or access to business development resources, youth face constraints made more difficult by their age.  Expanding the entrepreneurial culture and skills of young citizens has the potential to improve economic stability and the overall health of communities.

It is against this backdrop that Making Cents International decided to organize the global Youth Microenterprise Conference. The world's leading experts and practitioners in youth microenterprise, entrepreneurship, and livelihood development will convene in Washington, DC to address the following critical issues:

• The Role of Youth Microenterprise in the 21st Century: Facing the Challenge of Youth Unemployment and Vulnerability
• Strategies to Address the Needs of Youth Entrepreneurs
• How to Build Partnerships and Advance Youth Microenterprise to Support Social and Economic Development.

SBA Gendered Entrepreneurship Study

By: Karuna Jaggar, Women's Initiative Director of Public Policy and Research

 

Regarding the new Small Business Administration study, "Are Male and Female Entrepreneurs Really That Different?", several things stand out to me from the report:

1. Women entrepreneurs have different expectations, reasons for starting a business, and motivations from men;
2. Women were more likely to start a business to balance work and family life whereas men were more likely to start a business to make money;
3. Men are more likely to believe that starting a business is more important than spending time with one’s family;
4. There is no statistically significant difference between men and women regarding motivation to start a business to be innovative and learn;
5. Male entrepreneurs have consistently higher expectations for their business than female entrepreneurs, both with regard to earnings and number of employees;
6. Male entrepreneurs had greater confidence that they can attract employees in addition they seek opportunities in different ways and start different kinds of businesses;
7. Men are more likely to found technologically intensive businesses, biz's that lose their competitive advantage more quickly and businesses that have a less geographically localized customer base. Women are more likely to prefer low-risk/low-return businesses;
8. Male entrepreneurs more likely to identify business opportunities through research;
9. Controlling for these factors, gender does not affect new venture performance

The good news is that women-owned businesses are not smaller because the gender of the owner specifically limits business performance. Women are not simply less capable of running a business.
However, it is also clear is that preferences, motivations, and expectations are different for men and women. And the researchers point out that understanding such structural barriers to female entrepreneurship are critical for policy makers.

Experience with our clients confirms that work/family balance is a primary motivating factor for many women entrepreneurs, particularly low-income entrepreneurs, who for example may not be able to afford adequate child care through low-wage work.

While certainly many Women’s Initiative clients cite making more money as a key motivation in starting a business, it is unlikely that many (if any) would agree that starting a business is more important than spending time with family, as men in the study report. This research highlights the role of self-employment and business-ownership for women in balancing financial and non-financial responsibilities to provide for and care for their families.

In contrast to other research, this report finds that women do not lack self-confidence, in comparison with men, in their ability to undertake the firm organizing process and women entrepreneurs do not perceive greater barriers than male entrepreneurs. This finding may be explained by the fact that the study looks at entrepreneurs in the process of starting a business, rather than the likelihood of men and women to choose to start a business. This distinction is important in whether women even consider starting their own business, let alone act on the interest.

Tuesday Linkblogging

• Check out this article in the Chicago Tribune about business training programs at home and abroad. It's a slightly unusual article, in that articles about social entrepreneurship and microfinance tend to focus on earned income strategies for nonprofits, and loan funds, respectively. This one also has quotes from Bill Clinton, who is focusing on such things these days.



• A small item of note for Californians: The California Women Business Owners just elected a new board president.



• grokdotcom.com pointed me to a new study by the SBA contrasting male and female small entrepreneurs. USA Today's blog summarized the findings. While there's no difference in performance between male and female run businesses:
  • Men had more business experience before opening their business, and higher expectations.
  • Women entrepreneurs had a bigger average household size. (This is a point women have mentioned to me often: They're more likely to shoulder extra responsibility for child care and elder care, which takes away from time spent on their business.)
  • Women were more likely to have positive revenues, but men were more likely to own an employer firm. (My take on this: Businesses with employees are more likely to have higher profits because they can take on more customers.)
  • Male owners were more likely to start a business to make money, had higher expectations for their business, and did more research to identify business opportunities.



• An interesting interview with Laura Yamanaka, the new head of the Los Angeles chapter of NAWBO, which is gearing up for a big expansion.



• Interesting article in the Minneapolis Star Tribune about a fingerprinting expert who started her own business with help from the Service Corps of Retired Executives, or SCORE. Looks like a good resource, so check it out!



• Small Business CEO blog is running excerpts from Ron Finkelstein's book 49 Marketing Secrets That Work to Grow Sales.



• The Microenterprise Journal Blog (fantastic! That's going straight onto our blog roll!) has a podcast about the SBA and Congress looking at women's microenterprise. This is a must listen!

Equitable Time-off

By: Elizabeth de Renzy, Researcher and Data Analyst

 

The Louisville, KY Courier Journal has an article from Joyce Rosenberg about small businesses offering all employees the same time off they offer parents.

I think equitable time-off policies are a step in the right direction.

Not only are they fair to parents and non-parents alike but they undermine the old-fashioned belief that women are less dependable/dedicated employees than men because of their (assumed) family responsibilities – an argument that still keeps women out of high responsibility (and high paying) positions and supports gender inequality outside of the workplace as well.

Eat Local Week

By: Justina Cross, Women's Initiative Marketing Communications Manager

 

I read a great blurb in the paper today about Eat Local Week which focuses on eating food grown and produced within 250 miles drive of San Francisco.

A very cool idea! I have friends who try and adhere to eating local all year long which is very admirable. We all know that cost and energy used directly relates to distribution of the food we eat…the farther it is from our home, the more energy it takes to get it into our hot little hands.

During Eat Local Week - next week, Sept. 23-29 - more than two dozen restaurants and stores will feature local foods and ingredients.

The week was conceived by Jordanna Thigpen, vice president of the city's Small Business Commission.

"By taking an Eat Local approach to our shopping and dining decisions," Thigpen said, "we can create a sustainable economy where less fuel is used in getting food to your table and the majority of dollars we spend stays in our community."

I visited the Eat Local SF website and discovered that we have three graduates participating in the week: Guisell Osorio of Sabores Del Sur, Andrea Doffing of Mirabai Chocolates, and Maria del Carmen of Estrellita Snacks. They all have such delicious food, and I encourage you to patronize their businesses for Eat Local Week starting Sept. 23.

China's Microcredit Question

By: David Veneziano, Women's Initiative CFO

This article from Forbes looks at the Agricultural Bank of China's microcredit program, funded from Australia, which has been running at a loss for community development purposes. The bank is about to go public, so there's a big discussion around how this will happen. Will they tighten up their operations? Will part of the program remain a "policy bank"? What's best for the loan recipients, for the investors, for China's economy?

The answer is simple: do you want to help disadvantaged people or not? There's a cost to everything and if you want to help people you have to pay for it.

At Women's Initiative, we don't expect to break even because we will make high risk loans, but we will not charge our clients a premium for added risk. We don't do this because it would put a big burden on the clients' ability to use/leverage the money we are lending them. It's a vicious cycle: more risk = more interest = more risk because of more interest payments, etc.

We hope to grow large enough to break even and we can do that by keeping our process streamlined, and keeping losses down by having a relationship with people we lend to. That's good enough.
It's tough to make money even as a regular bank. Why do you want to make money off of disadvantaged people? Isn't the government there to help?