Think Different, Bank Different: How Female Entrepreneurs Grow Businesses
Let’s say a woman has built a business through bootstrapping and local bankers. How does she plan for and respond when her business grows to it’s next level, and is that different than the way men might handle it?
Mark Calvey reports in a San Francisco Business Times article (sub. required) on a recent Center for Women’s Business Research study (commissioned by Cleveland bank National City) that found that $5 million seemed to mark a gender-related diversion of banking paths for small businesses. At that level, …" men-owned businesses started using more sophisticated banking and financial services to help manage company finances." On the other hand, …"women-owned businesses were substantially less likely to take advantage of these services."
I decided to ask Julia Baran (who works with a large multinational bank that shall remain nameless and who happens to be related to me) what this might really reflect. Here were her thoughts:
"The pool of bankers with whom these women are dealing likely becomes much more male dominated the bigger the loans. There are probably misconceptions on both sides of that transaction. Some men may think women are not sufficiently sophisticated to understand these types of bank products and thus, do not offer them to women-owned businesses. Or, if a woman has a business that works already, why would she look to add complexity to it? In addition, there is that trust thing: women are FAR less likely than men to pretend that they know what they are talking about with more exotic bank products.
Another possibility - maybe these women-owned businesses grew a bit more organically, so the need for more ’sophisticated’ products was not necessarily as apparent. [Editorial note: Someone should research that.] Once you get used to a way of doing business, it is hard to change-especially if you are busy and successful as it is."
As the article points out, women-owned businesses are growing at almost twice the rate of all firms over the last two decades. What I’m not so sure of is whether this means the market for "sophisticated banking products" will grow in the near future, or if female business owners will drive banks to do things very differently, in general…
November 5th, 2007 at 4:39 pm
Thanks for this great article. I can assure you that women are in fact sufficiently sophisticated to understand these types of bank products. I don’t know why we choose not to take advantages of these services though. Personally, I’d rather not take that route. Also, I have some very valuable information for women who are planning on starting their own business. Mirassou is having this great contest called, “Make your Dreams Come True with Mirassou.” One business women will be awarded $50k, plus a team of highly professional consultants to help kick start their business=D You can check out: http://www.mirassou.com/women_in_business/dreams.asp for more details & to enter! The deadline is Dec. 15 2007. Anyone going to give it a shot? I work with them, so just helping to get the information out! Good luck!
November 7th, 2007 at 3:46 pm
Its a shame that there is a stereotype suggesting that women are not financially savvy. I am glad to say that the company I work with , Mirassou, is out to dispell that claim with their “Make Your Dreams Come True with Mirassou” contest. The lucky lady to win will be award $50,000 and works with a professional group of consultants to start her own business. Check out the website to enter http://www.mirassou.com/women_in_businss/dreams.asp . I suggest looking before the deadline Dec 15th 2007, for you chance to win. This contest could really change the life of the lucky gal!