Women entrepreneurs, how do you break the Rs 50 lakh ceiling?
Women entrepreneurs don't need to be hemmed in by glass ceilings. They can grow and scale and we find out how.
At a recent conference, a speaker mentioned, "Women-run businesses rarely cross Rs 50 lakh. And that’s a shame because they usually run solid business ventures.” He further backed up his comments by stating that women-led startups to get only two percent of the total VC funding in the US.
Statements like this, whether factual or not, paint a fairly dismal picture and are likely to discourage women entrepreneurs. But truth is, many women have broken through this '50 lakh glass ceiling' and have built profitable growing companies. So I reached out to some successful women business owners asked them for their take on breaking the 50 lakh glass ceiling.
This post shares some points on how women entrepreneurs can change their approach towards business growth and achieve scale.
Women entrepreneurs tend to think smaller. A VC friend informed me that most of the male-run startups have a really grand vision. Think of "World domination in Food Delivery" or "The next unicorn in AI enabled Healthcare".
Women run startups tend to have modest goals like "I want to create a nutritious cereal brand for school kids. And make money." These goals may be achievable but lack the grandness of a larger vision statement.
The general consensus is that women need to 'Think Big' while defining their business vision. They need to focus on the potential of the idea and not get bogged down by product details or service execution-related issues. After all, the size of the vision defines the business goals. The larger the vision - the higher the chances of world domination. So dream a bit and think bigger.
Ditch the guilt
Lots of women juggle home and work. As a result, we often end up putting home first. And why is this a bad thing? It means we love our family/friend/pet and want to spend time with them. Also sometimes there is no viable alternative. So ditch the guilt.
If the business idea is good and things are in place for sustainable growth - the venture will grow. Just remember it won't grow as fast it's potential and some growth opportunities will get missed out.
A friend of mine, who runs a spice trading firm said, "My son will be a child only for the next five years. Opportunities, on the other hand, come again. If you keep a positive mindset and are ready to work hard, the company will thrive. And women learn early on, we often have to work harder to succeed. Just hang in there."
So ditch the guilt. Remember some people go straight to the top while others take a circuitous route and enjoy the scenery. But they too reach the top.
Leverage our strengths
Anecdotal evidence suggests women are usually open to listening to feedback. And acting on it quickly. Plus we are likely to be more service oriented and have greater ability to multi-task. These are all skills we can leverage to our advantage. But often do not capitalise on.
My firm helps startups scale up. And I have found women leaders are quick to accept market feedback and act on it. For example, a client engaged us to test market a brand of organic products. The retail response was lukewarm with trade saying the offering was undifferentiated. The client was quick to take the feedback. She changed her product mix, pack design and placement strategy - while safeguarding her margins. Today, she is ready to re-launch her brand with a differentiated line of products. Trade response is extremely encouraging and the business is likely to break even in a limited period of time.
In my opinion, the best startups are built on the founder's strengths. Women entrepreneurs should leverage their listening skills, adaptability, service orientation and much more to build a differentiated brand proposition. If your brand is differentiated in a meaningful manner, it will grow. Another cool way to puncture the Rs 50 lakh glass ceiling.
A lot of women entrepreneurs are hardwired to think that promotion is equal to prideful boasting. This mindset is a huge drawback when it comes to brand promotion. Every opportunity to talk about one's brand should be exploited and leveraged. It's easy to do once you know how to flip the switch.
I recently met a young entrepreneur who offered me a sample of her range of skincare products. The product was amazing. Plus attractively packaged and priced right. So I asked her how she got them made - thinking this brand has the capability to scale up.
Her response was avoidable "It's just me and my maids. We work out of the kitchen. It's a small operation." The truth is, her business was clocking Rs 10 lakh a year within the first two years of operations and likely to grow faster than many other ventures I have seen.
I would have preferred less information and more promotion - "We work from our home office in Bangalore. All products are handmade by my staff and supervised by me. It's the secret of our amazing quality. But demand is good so we will be scaling up by next year. "
But it's not just a mindset issue. Women-led firms often don't have much capital to invest- so they are not able to spend on brand promotion. And a result the cycle continues.
In the words of a friend of mine who runs an eco-friendly venture, "Brands grow through promotion - either word of mouth or advertising. You will need to invest in promotion. Because if customers don't know about your brand - your company cannot grow."
Invest to Grow
In my interactions with women entrepreneurs, there is another common trend. Many of them are bootstrapped. With personal savings, support of family and friends and a bit of luck thrown in.
But few business ventures grow without an infusion of capital. In today's world, this can be achieved either through debt or equity. However, women often avoid seeking funds for capital infusion as it is perceived as risky behaviour.
To paraphrase an article in the Fortune magazine - women get a very small share of VC funds but they also ask for very little. This mindset needs to change.
So remember, without capital, investments are tough. They will either take a long time (as one builds up the profits to create a surplus) or be done in a suboptimal manner. So ditch the conditioning and go for growth. Often it's this much-needed capital that helps women cross the Rs 50 lakh glass ceiling.
All entrepreneurs have tough lives - whether men or women. So when things are tough, look for inspiration. In the words of Ayn Rand, author and philosopher, "The question isn’t who is going to let me; it’s who is going to stop me?”.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)