Women are starting new businesses at a rapid rate. Currently, women are majority owners in at least 35 percent of U.S. employer firms, for a total of 13.8 million businesses. To give this some perspective, in 1972, there were only 402,000 women-owned businesses.
According to American Express women business owner statistics, women-led businesses employ 9.4 million workers and currently generate $1.9 trillion in revenues annually. This growth of women-owned businesses brings with it an opportunity for female entrepreneurs to grow and scale their business ventures and increase their contribution to the U.S. economy.
Madison Zhao, @madison_ceo, is a successful entrepreneur and businesswoman. Born into poverty in Macao, China in 1999, she earned a scholarship and moved to the U.S. to attend an American university and get a dream job. After repeated rejections from job applications, she made the decision to start her own business. Now after starting three successful businesses of her own, Zhao established The Madison Profit Academy with the goal of providing aspiring entrepreneurs and business owners with the knowledge, tools, and strategies needed to start and scale their businesses.
Zhao shared with me her top five tried-and-true lessons for building and scaling a successful business.
Focus and specialization
Focus is the number one element of business success according to Entrepreneur. “As a business leader trying to think big and act bigger, if you don’t relentlessly focus that ownership on what drives your business, create a culture that reflects who you are, and stay grounded as you make things happen, you’ll never see the true rewards of thinking big and acting bigger.”
Early in her career, like many new business owners, Zhao made the mistake of trying to capture all markets simultaneously, but this approach diluted her efforts and led to failure. She realized that a successful strategy is as much about knowing what not to do as it is knowing what to do. When Zhao launched Liuxuewd, her consulting business, she zeroed in on helping students transition to the U.S., instead of offering a broad range of services. This allowed her to excel in a specific niche and build a strong reputation.
Long term vision over quick wins
A 2018 study by McKinsey found that only 16% of companies that were committed to a multi-year process of digital transformation reported sustainable performance improvement. Harvard Business School advises “what holds most leaders back is that they don’t translate the vision into a structured plan that they keep in focus over time.”
Sustainable success requires setting high standards and aiming for long-term goals. Zhao wasn’t looking to solve an immediate problem when started a company that offered data-driven teaching solutions. She wanted to revolutionize the high school learning experience. This long-term vision attracted investors as well as customers and helped achieve exponential growth.
Differentiation and value creation
Harvard Business School stresses the importance of differentiation. “Before launching a venture, all entrepreneurs should determine what market need their product or service fulfills, and what separates their offering from other available options. Without this differentiation and definition of opportunity, a new business isn’t likely to succeed.”
Competing on price alone is a losing proposition according to Zhao. “I learned that without a unique value proposition, businesses can easily get caught in price wars. My consulting business thrived because I differentiated myself by offering a satisfaction guarantee – a rare approach in the industry at that time. This set me apart from my competitors and built trust with my clients.”
Finding the right talent
The late Steve Jobs of Apple summed up talent’s importance with this advice: “Go after the cream of the cream. A small team of A+ players can run circles around a giant team of B and C players.”
Finding the right talent is crucial because it impacts your ability to scale and sustain a business. “No matter how brilliant your strategy or innovative your product, without the right people to execute it, your business will struggle.” Zhao continues, “Talents are chosen, not trained, and the cost of hiring the wrong person can be detrimental.”
Though hiring relatives and friends may be your comfort zone, it is a failing practice. Zhao found this approach failed miserably. “I eventually realized that I needed to hire people who were not only skilled, but also shared my vision and were eager to learn and improved. This shift in hiring marked a turning point for my business.”
Strategic alignment
“Every resource – human, financial, and material – must be aligned with a consistent strategy” according to Zhao. “As we scaled, I understood that every aspect of the business from budgeting to marketing, needed to be strategically aligned. This meant ensuring that everyone, from top management to entry level employees, was on the same page regarding our goals and how to achieve them.”
Advice for women seeking to fund their business
Research confirms the challenges female founders face securing capital. Sixty two percent of female founders reported experiencing bias in the fundraising process and 53% experienced harassment and discrimination. First impressions with potential investors are critical. Projecting confidence along with your presentation matters. Zhao added, “Whether it’s through your appearance, your pitch, or your business plan, you need to convey that you’re serious and capable. A strong, professional image can open doors that might otherwise be closed.”
The perception by investors that women can lead the business to success is a challenge for women. Zhao advises women to “practice your pitch, refine your communication skills, and be prepared to answer tough questions.” She adds, “It’s not enough to pitch a great idea, you must also demonstrate you can deliver on your promises. Showcase your track record, highlight your successes, and be ready to discuss how you’ve overcome challenges in the past.”
By combining confidence, presentation, communication, and execution, it is possible for women to position themselves as credible leaders and secure the funding needed to take their businesses to the next level.
Scaling and sustained growth takes hard work, determination, and a knowledge of the tried-and-true key elements for business success. Women can emerge as a stronger force in the U.S. economy by avoiding common mistakes business owners often make and follow the best practices of those entrepreneurs who have succeeded.
Bonnie Marcus, M.ED, is the author of Not Done Yet! How Women Over 50 Regain Their Confidence and Claim Workplace Power and The Politics of Promotion: How High Achieving Women Get Ahead and Stay Ahead. An executive coach and speaker, Bonnie is also host of the podcast, Badass Women At Any Age.
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