The need to invest in female entrepreneurs

Around the world, women-led businesses are a growing force for innovation, growth and prosperity. Research from the World Bank, the United Nations, the Global Entrepreneurship Monitor and others demonstrate that

the real drivers of the economy are women — as business leaders, employees, consumers and entrepreneurs.

While aggregated data is often challenging to find, the recent Global Entrepreneurship Monitor (GEM) found the following:

• 126 million women around the world were starting or running brand new businesses.
• An additional 98 million female business owners ran companies that were at least three years old.
• That’s 224 million women impacting the global economy.

and this survey accounts for only 67 of the 188 countries recognised by the World Bank.

Businesses owned by women account for approximately 37 percent of all businesses worldwide, according to a 2011 report by the World Bank Group’s International Finance Corporation. These companies range from the smallest sole proprietorships to the most dynamic, high-growth, well-managed enterprises. Whether large scale or micro, every woman-owned business contributes to the local, regional and global economy.

The GEM Women’s Report also found significant room for improvement among female business owners. Although 12 million women-owned were expected to add jobs through 2017, male entrepreneurs continued to greatly outnumber females globally, and the report concluded that female business owners showed reluctance to grow large or to enter new or untested markets.

The importance of seizing every opportunity to leverage resources – through business partnerships or other strategic alliances, was emphasised in the Goldman Sachs 10,000 Small Businesses programme, from which I recently graduated in Detroit, Michigan.

Goldman Sachs is a thriving investment bank which made USD 11.6 billion in profits last year. As other women business owners continue to launch and expand new companies, the potential for profiting from a network of my peers will continue to increase.

It is very important to develop a peer network. While a mentor is generally a more seasoned employee who acts as a coach or advisor and can offer advice on career choices and personal development based on his/her years of work and life experience, a peer network is a group of colleagues who meet and talk as equals to offer support. They brainstorm career ideas, answer everyday questions, share job advice, or simply listen and console on a reciprocal basis. The whole idea behind a peer network is colleagues helping each other help themselves.

The truth is, I have always had an intense determination to share the vision and mission of the company I lead: a non-profit organisation that I view as a business in every respect, except for the fact that my growth is measured not by profits, but by the number of people served and lives changed. I recognise that my good works cannot continue unless I consistently attract new clients and produce results that persuade others to invest resources in what I do. So I constantly seek new partners.

My organisation, Jackets for Jobs’ helps men and women overcome poverty and achieve self-sufficiency. I understand that business partnerships can push our agenda forward, and produce results that far exceed the expectations of either organisation.

For example,

Jackets for Jobs has been very fortunate to have established and developed an outstanding partnership since 2007 with the USD 27.4 billion U.S. retail chain T.J. Maxx,

which is known for selling name-brand and fashion merchandise at a deeply discounted price. T.J. Maxx provides financial support that amounts to approximately 10 percent of our annual budget. The company also provides our organisation with in-kind donations, in the form of new business wear for women and men.

Approximately 90 percent of our financial support comes from the U.S. Department of Labor, which funnels the money to the City of Detroit’s, Detroit Employment Solutions Corporation, which is a quasi-governmental agency. This is a tremendously important partnership for my organisation. The most vital factor is the understanding of our mission and the empathy for my clients – 75 percent of whom are women – demonstrated by the Detroit Employment Solutions CEO, who is also a woman. We have a very productive relationship, and she recognises the critical need for our services in a city where most heads of households are women.

The urgent need to invest in female entrepreneurs is evident to many visionary proponents of grass-roots economic growth. Goldman Sachs, which joined forces with Babson College and billionaire investor Warren Buffet to sponsor the 10,000 Small Businesses initiative in Detroit, Michigan, launched a similar campaign in 2008 for women. The 10,000 Women programme gave female entrepreneurs from 43 nations a business management education and connected them to mentors and networks of peers. New research Goldman Sachs released this year reported that 18 months after completing the programme:

On average, programme graduates had doubled their workforces and increased their revenues fivefold. The research demonstrates that increasing the access women have to business capital can significantly raise the standards of living, especially in “developing and emerging” markets. The New York Times reported in 2012 that female entrepreneurship is higher in Africa than anywhere else on earth, according to the World Bank. All of us should be encouraged and motivated by women who will let nothing prevent them from doing better.

The positive results of 10,000 Women motivated Goldman Sachs to reinvest in female entrepreneurs with a new initiative. The company announced in March that the 10,000 Women programme will partner with IFC, a member of the World Bank Group, to raise USD 600 million in capital for 100,000 underserved women business owners.

I certainly plan to use what I’ve learned as a Goldman Sachs Scholar to craft new partnerships and mentor other women who are just getting started. May the partnerships all of us form lead to increased economic growth – everywhere women operating businesses of their own.

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[1] Alison Vaughn is an award-winning entrepreneur and co-author of the book, Inspired Style. This sought after speaker is the Founder & CEO of Jackets for Jobs, Inc., which is a non-profit organisation that provides employment etiquette, career skills training and professional clothes to low-income individuals. Since opening its doors in 2000, the organisation has assisted over 15,000 individuals with employment. This high profile organisation has been supported and applauded by ABC’s “The View”, NBC’s “Today Show”, and Oprah’s O Magazine. A highlight of her career was the distinct honour of ringing the closing bell on NASDAQ. Alison received a Bachelor of Science degree from Michigan State University and graduated from The Women’s Campaign School at Yale University, sponsored by Yale Law School. Vaughn is a Goldman Sachs Scholar and the recipient of many awards such as Martha Stewart’s “Dreamers into Doers”, in which Martha Stewart celebrates the passion of Women who turn their dreams into reality. She was named “Entrepreneur of the Year” by Alabama A & M University; “Businesswoman of the Year” by National Association of Negro & Professional Business Women, honoured as a Women of Excellence by the Michigan Chronicle, Recipient of “Leaders, Legends & Luminaries” award from Lakeshore Engineering, and Who’s Who among Female Executives just to name a few.