((L-R) Michelle Mitchell and Jamie Danek founders of humm Kombucha | Photo courtesy of humm Kombucha)
Locally and nationally, the number of women-owned businesses has grown substantially over the last five years. As a result, women have realized measurable benefits and overcome persistent barriers.
A quick glance at the numbers would show that women business owners are doing fine. The latest stats available from The State of Women-owned Businesses Report commissioned by American Express are noteworthy:
“Over the past five years, the annual growth rate in the number of women-owned firms has been more than doubled that of all businesses. The number of women-owned firms increased at a 3.9 percent annual rate between 2014 and 2019, while the number of all businesses averaged a 1.7 percent increase each year. There was an uptick in the annual growth rate for the most recent year: 5 percent for women-owned firms and 2.3 percent for all firms.”
A recent research report from Jane Kirkwood in 2016 identified four main reasons that women start their own businesses: financial success, personal satisfaction, work-life/family-life balance and satisfied stakeholders. Women are frequently driven by a passion for what they do and a motivation to have others benefit from that passion.
Michelle Mitchell and Jamie Danek founders of humm Kombucha, a healthy, lifestyle drink now available in all 50 states started in their kitchen in 2008. Danek says, “We have always been committed to helping people feel better and felt that with a product that literally helps you feel better and a culture that makes everyone that touches humm feel good, it’s a win-win.”
Even though the number are impressive, Women-owned businesses are still in the minority, and the hurdles faced by women who have embraced entrepreneurship are vast and often unique from those experienced by their male counterparts. Two challenges that are repeatedly mentioned include access to capital and lack of childcare.
Access to Capital
A major barrier for Women business owners is accessing, securing and retaining financing to open and run their operations. In its just-released survey, Groupon reports that 54 percent of women entrepreneurs say they’re held to a different standard than their male counterparts when accessing capital.
Danek relates her experience as a startup. “We were growing at a rocket ship pace and the numbers were always behind the growth. We relied on friends and family and the community to invest in the company and that was how we got our start. Had we relied only on banks and investors, I’m not sure we would have gotten much further than the kitchen.” She says business financing was her biggest hurdle. “Banks and even the government are absolutely awful at helping entrepreneurs. I’m not sure if it had to do with us being women or we just had a business model that they couldn’t support.”
SCORE.org covers this topic in an article titled, Overcoming Financial Challenges for Women Business Owners. SCORE, the U.S. Small Business Administration’s nonprofit, includes a report from Biz2Credit’s Women Owned Business Study, and quotes Biz2Credit CEO, Rohit Arora:
“While 2021 was a tough year for many businesses due to repeated shutdowns and other restrictions on small business, the extent of the drop [for women-owned companies]was surprising to me.” But, he explains, “During any downturn, women-owned businesses suffer more as they tend to be smaller and have less access to formal capital sources, such as banks.”
Research from the Kauffman Foundation shows women-owned startups pay higher interest rates and take on more collateral than similar businesses owned by men.
Some non-bank financing options that have been used successfully by Women-Owned Businesses include:
- The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) that help finance early-stage research and development.
- National Science Foundation (NSF)
- Department of Energy (DOE)
- The Department of Education
- Business Oregon Entrepreneurial Loan fund
Access to Childcare
Many women business owners care for family in addition to running their business as do many of their employees. The lack of child care centers in Central Oregon and beyond is a major barrier to Women Owned Businesses.
A think tank, Center for American Progress, has in the last six years identified what it calls, Child Care Deserts. Their definition is, “. . . areas with little or no licensed child care capacity.”
Like much of Oregon, Central Oregon is considered a child Care Desert. In this region, there is one opening for every three or more children who need one. In part due to the Pandemic, available child care slots declined from about 5,000 to about 1,600.
Some solutions might be on the horizon as local cities and counties have earmarked funding provided by the CARES Act toward tuition assistance, financial support for struggling facilities, providing business coaching, reducing local government fees and awarding startup grants.
The story of humm Kombucha demonstrates the benefits of persisting through barriers. Danek says, “In the early days it was just a bunch of us entrepreneurs with a great idea doing everything possible to make things rock! Today it’s so much more sophisticated with a mix of professionals and entrepreneurs so that we can still keep the magical spirit of the brand but run it with more systems and structure. This is much more sustainable as the brand has gotten bigger.”
