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In a League of Their Own
Women business owners level
the economic playing field
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Business New Haven
4/6/1998
By: Alec Appelbaum
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For women who own small businesses, say two area entrepreneurs, new opportunities sometimes clash with old challenges.
“In terms of getting financing and things I need, it's more helpful to sit down with a woman or a younger man,” says Laura Freebairn-Smith of New Haven's Good Work Associates. “To this day, there is a two-percent female presence on corporate boards. Most of the people we make sales to are [white men]. Some are interested in organizational development work, but not many.”
Lillian Rojas, a Branford-based technology consultant, says some things haven't changed.
“I was treated at some banks like not a real organization, patted on the head like 'Isn't that nice,' even though we have an annual 30-percent-plus growth rate in revenue,” says Rojas, who financed Rojas & Co.'s expansion from operating income until last year. “They were very happy for us [but said], 'We don't lend money for that sort of activity.'”
Rojas ended up happily borrowing from the People's Bank Women's Business Center, which has attempted to lure borrowers like her since its April 1995 dedication.
Noting that women will own roughly half the country's small businesses by 2000 (compared with 36 percent in 1992), manager Beverly Hoppie says People's founded the Women's Business Center to gain customers other lenders were reluctant to embrace.
“The unique thing about what we do is that we go after startups,” says Hoppie, “people [who] may bank elsewhere. In terms of collateral and credit issues, we can be more flexible in using outside guarantees” from sponsors such as the U.S. Small Business Administration.
According to the bank, this is lucrative business: It says Connecticut women-owned businesses have grown in numbers by 72 percent and in sales by 278 percent since 1993.
The division writes loans between $10,000 and $250,000 at variable rates two percent above prime. It also co-sponsors a comprehensive business training curriculum with the Entrepreneurial Center/Hartford College for Women. The center, partially state-funded, operates in Bridgeport and northern Connecticut.
Hoppie estimates she spends 20 percent of her time counseling individual startups. For loans the bank cannot make, the Entrepreneurial Center maintains a $5 million revolving pool for graduates. This pool, co-endowed by the center, People's and the Connecticut Development Authority, makes loans of $50,000 or less to training graduates who have business plans but prohibitively weak credit.
“Unfortunately too many startups use that old fallback, credit cards,” says Hoppie. “They have a good market niche, a well-thought-out business plan and some expertise, but so much credit-card debt that they're choking on it at 18 to 21 percent,” she explains. “Credit issues are still a major issue with women, oftentimes related to medical, divorce, job layoff or what have you.”
On the strength of its connections to training, Hoppie says, the center's business has increased “tremendously; this is definitely going to be a hectic year.” Rojas attributes the volume to service: “The paperwork was the same [at People's]; the attitude was very different.”
Rojas and Freebairn-Smith say that time seems to erode some old prejudices.
“The added burden of being a woman has gotten less so,” says Freebairn-Smith, whose business walked away from a city loan program that would have required her to collateralize her house in 1995. “[Lender skepticism] has nothing to do with individuals - it's a generational thing.”
Freebairn-Smith, whose partner in Good Work Associates is male, has since found happiness with a female loan officer from Fleet's small business group (see accompanying story).
Rojas says that even the lenders who passed on her application struck her as well-intentioned. “I wouldn't say this was the outright sexism that was happening many years ago - it was more paternal than sexist.”
The women's backgrounds in disciplines like organizational development and human resources, where women have long been able to reach prominent positions, have helped them to fashion marketing identities for their firms.
“As the 1990s have evolved and more CEOs read more books about teams and culture,” says Freebairn-Smith, more firms take an interest in organizational effectiveness and diversity training. Good Work Associates has won engagements from the New York Times Co. and Bayer Corp. in recent years.
Rojas, a former human resources and operations manager, agrees that clients have grown more receptive to the so-called “soft” skills associated with competitive strategy. “Because I have a human service background, it makes it easy for me to talk to people about technology.” Still, she says she has “not perceived that gender has hurt or helped” her firm's client development.
“Because we're women-owned and minority-owned, I have gotten on the state minority list, but there's never been a request for proposal that seemed so good [that we bid on it].”
As women own more businesses and occupy influential positions in more firms, Freebairn-Smith suggests, traditional barriers will recede. She says competitive pressures spur companies to seek attributes that resist easy categorization.
“I don't think CEOs say, 'I want to be like a small business,'” muses Freebairn-Smith about Good Work's busy strategic-planning schedule. “They say, 'I want my staff responsive, empowered, invested' - those attributes are not a given in a small business.”
Neither are they a given in a woman-owned business, but Hoppie says the Women's Business Center has blazed an enviable path. “Banks out of state have looked at our model, including one in Indiana,” she says.
According to the March 7 Memphis Commercial Appeal, a Memphis bank just opened a Women's Banking Center and a rival plans to do likewise this spring. Columbus-based giant Bank One teamed with Women Inc. last year to serve as preferred lender for that organization's members.
Looking to the future, Freebairn-Smith and Rojas profess more interest in size than in gender. Freebairn-Smith plans to divide her firm's information systems and marketing function, now under one employee, as her consultants fan out to more and longer engagements. Rojas wants to keep up.
“Our [24] clients are growing and changing,” says Rojas, who plans to increase her six-member staff by as many as four this year. “Our hiring right now means we're all tired.”
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