A Tool Kit for Credit Union Leaders and Lenders

Module Five

Why do more women than men start businesses in Canada but more men grow them?

What barriers do women face in growing their businesses?

How can credit union leaders and lenders better support women to grow their businesses?

Vancity Community Foundation undertook

Women Entrepreneurs: Financing

Opportunities for Growth

project between 2011 – 2013 to address these questions.

The project included extensive

research and a pilot project for women

entrepreneurs.

The content of this tool kit reflects what we learned from project participants, service providers and advisors about how credit

unions in Canada can better support women to grow their businesses and, by

extension, support greater economic activity and job creation.

Welcome to Module Five:

Women Entrepreneurs: An Emerging Growth Market

Around The World

“..this isn’t a commentary on what women can and cannot do, nor do we want to discount our male fellows, who are exceptional in their own right.

Instead, this is a challenge to push past this rhetoric of “we need to invest in women because they yield results”—and focus on the how, the who, and with how much money.

The why should no longer be a question.”

Nidhi Chaudry, September 2012

http://www.nextbillion.net/blogpost.aspx?blogid=2942

Introduction

• The previous modules were intended to enhance understanding about the role of credit unions leaders and lenders and how they can support women entrepreneurs to grow their businesses.

• This module highlights why and how organizations around the world are supporting women’s businesses at key stages of growth

Women Entrepreneurs: Need to Position as Economic Drivers

Around the world – women continue to start and grow businesses at a remarkable

rate – owning approximately 38% of all small businesses

– there is a growing recognition that microfinance is good for women but only part of the solution

– forward thinking financial service and other organizations are investing in services & programming to reach women entrepreneurs and foster their business growth

– the importance of reaching and serving established, small women-owned businesses that want to grow but need help is gaining momentum (the “missing middle”)

The “Missing Middle”

• Economist C. Kauffmann originally coined the term the “missing middle”. It referred to small and medium-sized enterprises (SMEs) in emerging countries that often find it difficult to access financing, especially when compared to micro enterprises and very large enterprises.

• Missing middle now used to refer to segment of women entrepreneurs with profitable small companies who want to grow but often cannot readily find the financing, tools and networks needed to do so.

The Missing Middle – why focus on this stage of women-owned business?

• Many policies and programs address the needs of women business owners at the two ends of the entrepreneurial spectrum – very small/start-up businesses or large, fast growing, venture-backed enterprises.

• A dearth of attention is paid to the “missing middle” – owners of small, established enterprises, particularly those with revenues between $100,000 - $999,000 (Research in Brief, Womenable, May 2007)

Understanding the Missing Middle

In 2006, an pilot survey of members of

the National Association of Women Business

Owners (US) was conducted.

Those surveyed who fit their definition of the

“missing middle:”

– had been in business for at least 3 years, and

– had 2005 revenues between $100,000 – $999,999

The survey revealed several key findings.

Key Finding – A Desire for Growth

� Missing middle women business owners:

– have a strong desire for growth and a greater than average need for assistance to achieve that goal

• 57% would like to grow their businesses and need help

• 64% are searching for specific growth tools

Key Finding: Need Help to Grow

� They want to grow their businesses but don’t know how.

– 67% want to learn from each other

– 54% say they lack managerial skills

– 42% interested in finding a mentor

– 38% say they lack mentors or role models

Targeting the Missing Middle: What’s Happening:

Here are three examples of initiatives aimed at

supporting the growth of existing, small

businesses;

1) Enterprising Women’s Growth Programme (UK)

http://www.enterprising-women.org

2) Count Me In’s Make Mine a Million (US)

http://makemineamillion.org/about/

3) Ernst & Young’s Entrepreneurial Winning Women (US)

http://www.ey.com/us/entrepreneurialwinningwomen

Enterprising Women’s Growth Programme (UK)

• Enterprising Women started in 2006 in response to recognized need to unlock and stimulate the economic potential of women’s entrepreneurship.

• Targets women business owners with annual revenues between £100,000 and £1.4m

• Programme Model: selected applicants participate in 6 days of intensive, interactive training plus access mentoring and coaching. End goal for participants is to develop a “Strategic Action Plan” for business growth. Elements include:

1. Overcoming personal barriers, developing management and leadership skills

2. Prioritising most feasible business growth model

3. Principles of finance, investing in growth & accessing finance

4. Managing growth, recruitment, building & leading teams

Make Mine a Million(M3) Program

• Launched in 2005 by Count Me In with Founding Sponsor American Express OPEN.

• Targets women-owned businesses with revenues between $85,000 – $750,000 wanting to grow into million dollar enterprises.

• Program Model: City-based, business competitions where finalists present their businesses in 3 minute pitches to a panel of experts and live audience. They compete for business development packages that include:

1. business coaching

2. marketing & PR

3. technological assistance

Ernst & Young’s Entrepreneurial Winning Women Program

• Developed program in 2008 in collaboration with Babson College’s Center for Women’s Leadership.

• Targets female company founders with potential to ‘grow big;’ must have reported minimum $1 million in sales for past two years.

• Program model: selected applicants coached on 5 crucial actions and exposed to entrepreneurs, investors and advisors to help them:

1. think big and be bold

2. build a public profile

3. work on the business, rather than in it

4. establish key advisory networks

5. evaluate financing for expansion

Continuum of Entrepreneurial Women:

Micro

EnterpriseEstablished

Businesses

1) Determine financing, advisory and

business support needs of target missing

middle segment(s)

2) Determine opportunities for strategic

collaboration with community partners to

reach and serve target segment(s)

The Missing Middle: second stage women-owned businesses positioned

for next growth phase

Where is your credit union’s target market

segment(s)?

Sub-Profiles

•Sole proprietors

•Social entrepreneurs

•Home-based businesses

•Husband and wife teams

•Women’s business partnerships

•Women’s cooperative businesses

•Aboriginal entrepreneurs (on and off

reserve)

•Immigrant or refugee entrepreneurs

$100K annual revenues $1million annual revenues

Around the World Banks are Taking Notice

• Growing recognition of the benefits of financing women-owned businesses:

– Access to a large, untapped, underserved market

– High repayment rates - microfinance payback rates exceeding 95%

– Market differentiation

– Increased brand value

– Increased social impact - increasing women’s access to finance facilitates greater spending on family welfare, nutrition and children’s education

Westpac Banking Corporation (Australia)

About: In the late 1990s Westpac underwent a cultural shift to

develop into the bank of choice for women – they recognized there was

an untapped business segment requiring improved service.

How: They established national and state Women in Business units and a

Women’s Investment Advisory Service with financial advisors

specializing in:

• investment planning

• education and risk management

• business services for women

Results: Three years later the program grew to A$504m

(US$382million) in new business.

Bank of Scotland (United Kingdom)

About: In 2003 bank created award-winning

Women in Business Program

How: • Sensitize frontline staff to differences between male and female

owners

• Better communicate financial products to women through increasing comfort levels and reducing fear of approaching banks

• Publish bi-annual magazine - Big Fish - to share female role model success and business tips

• Sponsor organizations and initiatives that improve products and services for women in business

Results:• Bank of Scotland quadrupled number of women ‘sole trader’ clients

• 72% of female clients polled said they recommended Bank of Scotland to others

KeyBank’s Key4Women Program (United States)

About: Began in 1999 as marketing outreach and technical assistanceprogram for women-owned firms. Recognized as a best practiceprogram by Ewing Marion Kauffman Foundation in 2006.

How: • Offer same loans and lines of credit as KeyBank, but customized for

women clients• Dedicated relationship managers to assist with loan applications and

other needs • Targeted and ongoing education programs & networking events

Results: In April 2007 KeyBank announced commitment it would lend 2 billion toqualified women-owned firms. In 2009 they met that goal, three yearsahead schedule.

Empowering Women, Building Business and Driving Economic

Renewal at the Same Time

• The emerging opportunity for credit unions with women entrepreneurs:

many build social and environmental values into their business aligned to co-operative principles

– they seek like-minded organizations to do business

– they want to learn more about how to finance their business growth

– they want to establish a long-term, trusting relationship with their financial institution

– many are motivated to grow their businesses but need help

What are the outcomes when we invest in women?

For women:Increased economic independence.

For credit unions:An increase in the credit union’s market share with women entrepreneurs that is more fully aligned to co-operative values.

For society: Increased economic development that includes the full potential of entrepreneurial creativity, rather than excluding potential talent – talent often historically ignored.

VIDEO

Quiz

• Please click on this link to review the points covered in this module.

• Note to Reviewer:

– Modules will include an optional, online quiz (5 to 6 questions), that will reinforce some of the key points made in the module.

Resources

• Websites

• Articles

• Studies

End Notes

Project Partners

Project partners:

This project was funded by