Focus on the Best Small Companies – Mom Inc.

by | Nov 23, 2014 | Real Estate Moms

For Los Angeles mom Deborah Wolsh, the prospect of working in Canada for three months, separated from her kids, convinced her finally to leave her corporate job and open Ethel, a clothing store. For Michelle Dawes, it was her boss’s negative comments each time she needed to leave work when her son was sick that gave her the gumption to resign and start Moxie TM, a New York- and Miami-based brand development and design firm. And for Erin Patterson, frustration over what her pediatrician wasn’t telling her about feeding her baby inspired her to launch Small Bites, a Brooklyn, NY, consultancy that helps parents to establish healthy eating habits for their kids.
Whether hunting for more flexibility, seeking greater control over their work or needing to fulfill a passion, moms across the country are striking out on their own in growing numbers, experts say. “I never had real excitement for a job before,” says Erin, whose nutrition consultancy, founded in 2005, has 650 subscribers to its monthly newsletter. “For the first time, I’ve found that I have something to say to the world.”
The number of women-owned businesses has almost doubled in the past decade. Today, 10.4 million women-owned businesses operate in the United States, generating an awe-inspiring $1.9 trillion in sales, according to the Center for Women’s Business Research in Washington, DC. Exactly how many of these women are also moms isn’t known, but experts say mompreneurs are a robust force. “Half of the women in our network are moms,” says Victoria Colligan, cofounder of Ladies Who Launch, a New York City-based organization that helps women start and expand their businesses. “This is a huge trend.”
Despite the entrepreneurial success of many moms, launching a business that will last is certainly not a cakewalk. While nearly two out of three new companies survive for two years, fewer than half are still around in four years, according to the U.S. Small Business Administration. And not everyone who fantasizes about freedom from corporate ties is cut out to be an entrepreneur (see our quiz). Experts agree, however, that building a thriving business requires two nonnegotiable factors: an incredible amount of hard work and an intense level of passion.
Working harder, longer
“You have to be a force to drive your business forward,” says Maureen Kelly, who six years ago founded tarte, a luxury cosmetics line that rang up $15 million in sales in 2006.
Kelly put a hefty $20,000 on her credit cards to start tarte, a financial risk she didn’t take lightly. The New York City mom of one says she now works harder than she ever has, often toiling late into the night after putting her infant son, Sullivan, to bed.
Long hours for entrepreneurs are the norm. In fact, most moms find that working for themselves means working more, not less. After all, when it’s your own company, there’s a good chance that business will stop when you do—and that includes vacation and maternity leave. Just ask Stephanie Hirsch, mom of Hunter, now 3, and the founder of INCA, a line of resort wear sold at stores like Neiman Marcus, Barneys New York and Fred Segal. “I was in labor and on the phone dealing with customers,” she says. “I didn’t take a day off. I didn’t have a choice!”
Desperately seeking flexibility
Longer hours can be more palatable if you’re putting in the time on your own schedule. Most moms leave their employers to start their own businesses not for more money but for the greater flexibility that can come with being their own boss, says Sharon Hadary, executive director of the Center for Women’s Business Research. For Shelagh Herzog, the mother of seven children ranging in age from 2 to 18, running her own business means she can attend field trips, stay home when the kids are sick and eat dinner with her family (even if they have takeout because she doesn’t have time to cook). In 2005, Shelagh founded Penelope Peapod, a company that sells a baby doll in a basket at more than 700 stores. “My life is crazy, but I don’t miss out on anything,” she says. “I make my own hours, and that makes a huge difference.”
Many moms also value sharing their entrepreneurial passion with their children. Consider Stacey Levine, who with her husband founded GoSMILE, a company that sells an on-the-go tooth-whitening system at stores such as Sephora, Saks Fifth Avenue and Nordstrom. It was their son, Julian, who named the business when he was 13 years old. This turned out to be a monumental act, not only for the company but also for Julian, who four years later wrote his college application essay about the experience.
“Having kids involved in a business gives them a good sense of self, which is super cool,” says Stacey. (Cornell University also thought it was super cool; Julian was accepted through early decision.)
Not-so-risky business
So why do more than half of all new small companies go out of business within four years? Often the failures are due to running out of capital, experts say. But this can usually be avoided with some careful planning. “The last thing people want to do when they start a business is look at very sobering numbers about what it really takes to be financially successful,” says Marta Kagan, founder of Lifeline Coaching, which helps women make the transition into entrepreneurship. “But if they don’t, they’re setting themselves up for a big risk.” Those sobering numbers can include the amount of capital you need up front or how many units you’ll have to sell before you break even. Kagan advises her clients to outline all of their onetime business expenses, from incorporation costs to the price of office equipment and securing trademarks or patents. She then suggests they list ongoing costs, from marketing and advertising to rent.
Another common mistake many new entrepreneurs make is thinking that a really great idea is all it takes to make a great business. It doesn’t work that way, emphasizes Hedy Ratner, founder and copresident of the Women’s Business Development Center in Chicago. You need to determine whether your idea has legs first. Ratner advises studying the market for your product and making sure you identify your niche before beginning. Proper market research includes doing due diligence on the demographic that you think would use your product or service, as well as investigating the competition (the business section of your local library is the perfect place to start).
Once that’s done, you’ll be in a good position to make sales projections and cash flow estimates, both of which are essential to any good business plan. Establishing the financial details of your company will help experts such as attorneys, accountants, investors and public relations specialists assess the feasibility of your idea. These professionals can then help you determine how long it may be before your business starts to turn a profit. Most experts say this can take as long as three to five years.
Whether a business is funded by a savings account, family money, a home equity loan or credit cards, meeting its financial obligations often involves making some serious personal sacrifices. Stephanie—who received some seed capital from her mother and charged the rest to a credit card (which she’s still paying down)—admits that the amount she has needed to reinvest in INCA to build it over the past nine years has meant that she sometimes hasn’t taken a paycheck.
Despite the long (and usually odd) hours, the often reduced income and the inherent risk that comes with starting a business, most of the mothers who have chosen to make the leap say they ultimately found what they were looking for. “I never feel like I made a mistake—ever,” says Maureen of tarte. “Starting your own business isn’t easy, but it’s not impossible, and for the right person, it’s nirvana.”
Source: April, 2007, Issue of Working Mother Magazine
© Copyright 2007, Working Mother Media Inc. All Rights Reserved
Real Estate, Business and Life Coach Cheri Alguire has partnered with hundreds of Real Estate Professionals and Small Business Owners to help them become more successful in business and in life. Coach Cheri specializes in Group Coaching for Small Business Owners, Working Mothers, and Real Estate Agents and Managers.
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