GETTING PERSONAL:Women's Firms Put On Million-Dollar Path

10 May 2005

By Colleen DeBaise

NEW YORK (Dow Jones)--Within Denise Houseberg's reach is a milestone that few female entrepreneurs achieve: Her Frisco, Texas, business is close to surpassing $1 million in revenues.

Women are opening small businesses at a growth rate twice as fast as men, according to national statistics. Yet not as many women are breaking the so-called million-dollar barrier, a fact that Houseberg says "sets my hair on fire."

"You see the disparity," says Houseberg, whose online store MarketExpo.com for home and garden accessories cleared $775,000 in revenue last year. "We need the David Letterman 'Top 10' for why women don't own million-dollar businesses."

For female entrepreneurs, and increasingly, the financial-services firms that are working to groom them as customers, it's become the million-dollar question: What's keeping women back?

A national organization for women business owners, Count Me In, has launched a pilot program called Make Mine A $Million Business to explore the issue and push a select group of women entrepreneurs onto the fast track over the coming year.

"We are the first program to even articulate this," says Nell Merlino, co-founder of Count Me In. She speculates that women might have less access to capital than men, and less impetus to build million-dollar enterprises because of a lack of role models. "It certainly struck us that more women out there would want to do this if they could see the way to it."

The program, which provides loans up to $45,000 and a "dream team" of business coaches, is also sponsored by American Express Co. (AXP) and New York educational company Women's Leadership Exchange. Women business owners are chosen though contests in five major cities; Houseberg was one of the first three winners picked last month in Dallas. Another three winners are expected to be named Tuesday in Chicago.

Only 279,000 of 10.1 million women-owned businesses gross more than $1 million in revenue, according to the latest data, culled in 2002, from the Center for Women's Business Research. Earlier studies from the center show eight times as many men-owned businesses make $1 million or more in revenue.

"We want to bring more women past that threshold," says Lexi Brownell, director of the women's business initiative at American Express's small-business division, OPEN. "Women are the fastest-growing segment of the business economy....We want to be a part of their growth."

More banks are focusing attention on women-owned businesses, which generate $2.5 trillion in sales and spend $103 billion a year on major business services, such as human resources and information technology, according to the Center for Women's Business Research statistics. Notably, Wells Fargo & Co.'s (WFC) lending goal, begun in 2003, is $20 billion over 10 years to women-owned businesses. KeyCorp's (KEY) KeyBank announced in February that it would lend a minimum of $1 billion over the next three years to women business owners.

Yet, the financing might not be the magic solution. Leslie Grossman, co-founder of the Women's Leadership Exchange, says women tend to equate taking a loan with the business being in trouble. The pilot program will push the message "you take a loan because you're doing well and you're trying to do better," she says.

Another stumbling block for many women is the difficulty in juggling work and family life. "Women are under the misconception that if they grow their businesses bigger, it's going to take more of their time," Grossman says. "If you really know how to manage, how to delegate, and you hire the right people and you grow your business strategically, you will have more time in your life. That's one of the fears that has stopped women from growing their businesses."

Houseberg, the recipient of the Make Mine A $Million Business award, says she grew her online business by applying the same skills used to raise children. "When I got my head out of analysis and started trusting my own gut instincts, that's when I started to become successful," she says.

A graphic designer, Houseberg originally started the Web site in 1999 to sell a client's large line of decorative wallplates. She quickly found many clients whose voluminous lines of home and garden products couldn't all fit on traditional retailers' shelves. With the new line of credit and some mentoring, Houseberg expects to reach $1 million in revenues in the third quarter of this year.

She believes women are naturally less risk-taking than men. "Men do it - they build it, lose it, and do it again without batting an eye," she says. "Women need to understand we can do it too."