When Stephanie Kaplan Lewis launched her media company 10 years ago, she vowed to do what so many startups before her hadn’t: Grow slowly, and bootstrap the endeavor.
That “radical” decision paid off. Today, Her Campus Media is a successful company focused on catering to college women. Other than a $50,000 grant, the company hasn’t accepted any outside funding. Yet it’s been able to grow revenue and has been profitable every year since its inception.
“There’s so much pressure to go out and raise money really quickly,” said the co-founder and CEO. “We were deliberate and thoughtful.”
Kaplan Lewis is among a growing group of female entrepreneurs who have been able to propel their businesses beyond the $5 million in annual revenue mark. A challenging feat for any startup but one that’s made more difficult for female entrepreneurs. She is also part of a group of 30 extremely successful female business owners that Bank of America and Babson College chose to interview as part of their Beyond the Bucks report. They picked these women’s brains, trying to learn what makes them succeed when so many fail. Read on to learn what makes them such standouts.
1. They shun outside investors
There’s no question startups face a lot of pressure to raise capital and to do it quickly. But that mindset can get them in trouble as they chase growth at all costs. While unicorns like Amazon and Lyft operate under one set of rules, for most start-ups, growing at a loss is only sustainable for so long before the business implodes.
For many of the enterprises that are successful beyond the first couple of years, bootstrapping is one of the secrets to their success. Instead of bringing in outside investors that dictate the direction of the business, they use their own cash, accept loans from family and friends, or even borrow from banks. For female investors, growing this way is less of a choice. Even when they are hugely successful, they have a tough time raising capital from private equity firms and venture capitalists. Of the $130 billion invested in startup companies in 2018, only 2.2% went to women-owned businesses.
“We’ve found a lot of women can’t get outside funding or didn’t seek it so they were able to grow at their own pace,” said Karen Reynolds Sharkey, Business Owner Executive, Bank of America Private Bank. “They were able to stay true to their vision and were able to grow the company on their own terms.”
Kaplin Lewis credits her success in part to keeping out outside investors. There wasn’t anyone to force the business into heading in a direction they didn’t want, or weren’t ready to pursue. It also forced them to keep a close eye on the money instead of spending lavishly. “Bootstrapping the company enabled us to be laser-focused on what’s important. If you don’t have endless funds at your disposal you prioritize what’s a good use of the money,” she said.
2. Determination and grit are necessary skills
Of course, women entrepreneurs face lots of challenges beyond just raising funds. Misconceptions run wide and deep, and business partners often don’t take them seriously, hurting their ability to grow. “Given my business was in baby products and I am a mother of four, I felt it gave me credibility,” Raegan Moya-Jones, co-founder and former CEO of Aden & Anais told Bank of America and Babson College. “Business people didn’t, and still don’t take me seriously a lot of the time, despite the fact that I worked hard. I built a business from scratch that now generates over $100 million in annual revenue.”
Moya-Jones was able to succeed thanks to two factors: determination and grit. Those are the two characteristics that all of the women in the survey expressed. They know gender bias is alive and kicking, but they don’t let it stop them. The level of focus and determination even caught Dr. Lakshmi Balachandra, assistant professor of entrepreneurship at Babson College, by surprise. She said across the board, the women had a clear vision about what they wanted for their businesses and weren’t afraid to go after it.
3. They lead with compassion
That a business is only as good as the employees it hires is something successful female business owners never forget. Their ability to grow organically is in large part due to their focus on developing their workforce. They typically choose to treat all employees as equals and take a team-building approach to creating their companies. They also set out to build enterprises they would want to work for themselves.
And it shows in the benefits they offer. These successful female entrepreneurs are willing to take on the heavy expense upfront to offer benefit packages that can attract and retain skilled employees. “They are thinking about maternal leave and parental leave and creating a culture,” said Bank of America’s Sharkey. “They truly feel employees are part of the family.”
Many of the female entrepreneurs interviewed pointed to the people in their companies as an integral part of their success. They understood the investment in employees could hurt profits in the early days, but over the long haul, that investment builds a strong and sustainable operation.
4. They make their own groups
Networking has always been a great way to make connections and grow a business. For female business owners, even highly successful ones, it has been and still remains a challenge. They aren’t excluded from the events, but they’re often alone or among the few in the room. They tend to gravitate toward other females out of comfort, limiting their interactions with the men at the events.
To compensate, successful female entrepreneurs forge relationships with other women within their industry and outside. They either join associations or networking groups, or if they don’t exist, they create them. By having each other’s back, staying true to their vision, finding alternative funding sources and having determination and grit, these women have created the boilerplate of how to make it big. They know the odds are stacked against them, but that doesn’t prevent them from excelling. “Although the women routinely encountered barriers, they adapted and moved forward, leading their businesses and employees to substantial growth and success,” said Sharkey.
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