We're Not Done Yet
By Sally Huggins
H.R. 5050 gave a big boost but women business owners still continue to fight.
Not special. Just equal.
Women entrepreneurs aren’t looking for special breaks. They just want an equal portion of the economic pie.
In the 1980s, women entrepreneurs declared war on the male-dominated economic world and they haven’t backed off. The women actually used the term VSPGIT, which stood for “velvet, silk and pearls guerrilla infiltration tactics.” It suited their sense of humor.
This year, women are celebrating the 20th anniversary of the passage of the national Women’s Business Ownership Act of 1988, symbolically numbered House Resolution 5050, which recognized the rise in women’s entrepreneurship.
“This landmark legislation created a policy voice for women entrepreneurs and has helped fuel the growth of women’s entrepreneurship for the last two decades,” said Virginia Littlejohn, a force in the push for H.R. 5050 and CEO of Quantum Leaps Inc., in Washington, D.C.
Only 20 years ago, a woman needed her husband or father to co-sign to get a business loan in many states. Women who owned businesses were considered so insignificant then that the U.S. Census Bureau, in all its data collection, had none regarding corporations owned by women and hence drastically undercounted the revenue they generated.
That the federal government couldn't even conceive of the existence of larger women-owned businesses was the last straw for some early business owners. A relatively small band of women organized and took the 1986 White House Conference on Small Business by storm, dramatically changing the economic climate for women.
How It Began
The movement to bring more equality to women-owned businesses dates back to the mid-1970s, when it was revealed that women were starting businesses at twice the rate of all business. A group of constituents urged the U.S. Small Business Administration (SBA) to create an office of women’s business to focus on this growing group of entrepreneurs. The SBA created the Office of Women’s Business Ownership, but it took about a decade more to determine just what the office would do, said Wilma Goldstein, current director of the office.
It was in the 1980s when the real push by women entrepreneurs began. Women business owners decided their voice needed to be heard. Littlejohn, national president of the National Association of Women Business Owners (NAWBO) in 1984-85, led an initiative to get women business owners elected and appointed as delegates to the 1986 White House conference.
“We used the 1986 White House conference as a strategic opportunity to put women business owners on the map,” Littlejohn said. “Previously we had been almost completely invisible and no one took us seriously, especially male business leaders.”
To accomplish their representation goal for the conference, Littlejohn and other politically savvy leaders attended the early state conferences where delegates were selected for the national conference. They studied the process and then trained NAWBO leaders in upcoming states to get their members selected as delegates.
“The strategy that we developed was so effective that in some states we could have gotten 100 percent of the elected delegates,” Littlejohn said. “However, to prevent a backlash, we insisted that none of our chapters have more than 51 percent of the delegates, and preferably only 25 to 35 percent.”
NAWBO worked to develop cutting-edge policy recommendations for the conference—on taxes, capital for innovative growth businesses, research and development and procurement. NAWBO delegates also embraced international trade, an issue that few small business groups were paying attention to in 1986.
“These were not issues that the prominent male business leaders of the day would have thought of as being of any interest to women business owners, because they thought back then that we mostly made candles and macramé in our basements,” Littlejohn said.
All the preparation and organization paid off, with 26 of the 27 issues the women presented being approved by the conference. While this was important, the real impact came later when mainstream small business organizations began inviting NAWBO members who had been delegates to join their committees and boards, she said.
“Our strategy had worked and women business owners were slowly but surely becoming a visible component of the business mainstream. Our members started being interviewed by the business media, rather than only by the women’s section of their local newspapers on Mother’s Day,” Littlejohn said.
H.R. 5050
With new visibility and credibility, the women moved to the congressional arena to push for legislation to address specific gaps and obstacles, such as problems with access to credit, poor statistics about women-owned business, inadequate education and training for women entrepreneurs and lack of a voice in the policymaking process.
Working with Rep. John LaFalce of New York, then chair of the House Small Business Committee, the women helped the committee organize hearings on their areas of concern and to prepare legislation.
The timing was such that the proposed bill could get the coveted and symbolic H.R. 5050 designation, Littlejohn said. Working their network of members throughout the country, and helped by 1988 being a presidential election year, the legislation passed.
Key components of the legislation were:
- Elimination of any state laws that required women to have a male relative co-sign a business loan
- A requirement that the U.S. Census Bureau count all woman-owned companies
Establishment of the Women’s Business Center program, funding local resource centers across the country - Creation of the National Women’s Business Council, a body of women entrepreneurs and organizations that advises the president and Congress
H.R. 5050 is considered the big bang for launching women’s entrepreneurship, said Julie Weeks, president of Womenable, a research, program and policy development consultancy whose mission is to enable women's entrepreneurship worldwide, and former executive director of the National Women’s Business Council.
And it is a focus for women in other countries who have studied it to see if they can apply the principles in their countries, Weeks said.
“People from all over the world traipse through Washington to see what goes on in the U.S. government to support small business. Quite often they are very curious about engendering support for women’s business enterprise in particular,” she said. “Elements in the law have stood the test of time.”
Expansion of Women Entrepreneurship
Since the passage of H.R. 5050, women’s entrepreneurship has grown exponentially. The SBA’s Goldstein said the percentage of all businesses that are owned by women is closing in on 50 percent, a huge increase from 19 percent in 1988.
Since then, Goldstein said, woman business ownership has grown at twice the rate or more of all businesses and has greatly diversified.
“Those numbers make it kind of hard to do what they used to do to diminish us,” she said.
The National Women’s Business Council created by H.R. 5050 continues as a strong independent, bipartisan policy voice on behalf of women entrepreneurs, said Margaret Barton, executive director of the council. The council is comprised of 15 women—eight business owners and six representing large women’s business organizations. Meeting twice a year, the council reports annually to the president, Congress and the SBA.
“We are the only independent policy voice on behalf of women entrepreneurs,” Barton said.
The council is not a rubber-stamp organization, said Kansas City’s Nancy Zurbuchen, executive director of the Kansas City Council of Women Business Owners.
“It’s a significant group, not just another appointed group that doesn’t do anything. It keeps us on the front burner nationally,” she said.
The council also oversees research projects on women’s entrepreneurship and provides the research as well on its Web site Barton said.
More Advocacy Groups
In conjunction with the growth of women entrepreneurs, the number of organizations representing them has grown. Where once NAWBO stood alone, other groups have formed. The Women Presidents Organization was founded in 1997 to serve women presidents and CEOs of privately held, multimillion-dollar companies. Today it has nearly 80 chapters and 1,200 members.
The Women’s Business Enterprise National Council (WBENC) was established in 1997 and helps facilitate access to corporate market for businesses that are 51% or more woman-owned, managed and controlled.
In 2001, Women Impacting Public Policy (WIPP) was formed to provide a national bipartisan political voice in Washington D.C. for women and minorities in business. The group advocates for and on behalf of women and minorities in business on economic issues.
Ann Sullivan, who leads WIPP governmental relations, said a recent effort by women concerning a rule proposed by the SBA on federal contracting set-asides for women is an indication of the power and influence of women entrepreneurs today.
The SBA proposed a rule that would limit federal contracting opportunities for women-owned businesses rather than expand them. The rule was the result of the SBA’s effort to meet the requirements of Public Law 106-554 passed by Congress in 2000, which directed federal contracting officers to award up to five percent of all contracts to women-owned businesses. Only 3.3 percent of contracts were awarded based on the government’s 2005 report.
Women business owners, such as Denise Farris, owner of Farris Law Firm in Kansas City, testified before the U.S. Committee on Small Business to make their concerns known. Additionally women sent in a flurry of comments as part of the process. Sullivan said the agency now has three months to decide, based on testimony and comments, to withdraw the rule, further amend it or put it in place as a final rule.
“Another rule received 1,000 comments which stopped it cold in its tracks,” she said. “We want the rule withdrawn. It is our feeling that we are better without any program than this program.”
The outcry from women business owners has been a confirmation of the progress since the early movement.
“It’s a lot of fun to watch what’s happened. It’s the first time they’ve gotten a kick in the rear from women business owners nationally, the first time women business owners have really gotten mad,” Farris said.
Many of the women active in the H.R. 5050 passage continue to be active today.
“They’ve stayed involved,” said Goldstein. “This combination of private and public energy is quite unique. Women who lobbied weren’t in government or didn’t come from a presidential or congressional entity.”
The NAWBO chapter in Kansas City provides an opportunity locally for women business owners to work together in the political arena. Another forum is the Kansas City Council of Women Business Owners, which was founded in 2001 by Zurbuchen and Becky Wilson, founder and president of WDS Marketing and Public Relations Inc., with the goal of capitalizing on the combined influence, contacts and knowledge of area women business owners. Recently the KC-WBO council was instrumental in preventing a change to the city’s minority and women business certification vendor program. Working with other organizations, women business owners were able to prevent a dilution of the program.
But all change can’t be legislated, said Carol Howell, owner of Howell Construction, a multimillion dollar business in Kansas City.
“I don’t think you legislate inclusion. It has to happen naturally,” she said.
To do that, women business owners need to constantly work to be a force in the market on their merits, Howell said, who has owner her business for more than 20 years.
“We need to establish our businesses on the qualities that any other business would. We need to go forward not as a woman-owned business necessarily, but because we are a viable business,” she said.
For help with establishing viable businesses, women entrepreneurs can look to the Kansas Women’s Business Center and the Missouri Women’s Business Center—courtesy of the landmark legislation.
The Work Isn’t Done
But lest you think that the battle is won, today’s women business owners will tell you that much work remains. The concern is that women must continue to exercise their voice in the political arena.
“Women business owners are still perceived as a silent political voice. We need to work together to become much more vocal, otherwise the governing bodies cannot recognize the importance of our objectives,” Farris said. “We are conditioned to be very polite and that politeness and silence has resulted in us not being perceived as a major voice on the political front.”
Farris said the first step is becoming visible with local elected officials on a regular basis. In the early 1990s, Kansas City, Mo., created the Fairness in Construction Board, which had all constituents represented except women, she said.
“When we asked them why, they said, “You were so quiet we didn’t know you were interested,’” Farris said.
Within a year, Farris was appointed to the board.
Looking forward, the next stage for women’s enterprise is growth, said Womenable’s Weeks.
“For 20 years we have been focused on getting more women into business and giving them the help to get started. Where policy has lacked is in getting them past that start up stage,” Weeks said.
Women entrepreneurs are ready now to take up that task, she said, because they are much more organized now.
“Now more than 20 years ago, or even five years ago, there is a women’s movement. There wasn’t a national sisterhood then. It has appeared fairly recently. We are much more arm in arm than we were 10 to 20 years ago,” Weeks said.
Women’s Business Centers
H.R. 5050 laid out the plan for funding women’s entrepreneurial education through women’s business resource centers across the country, which are funded through the SBA.
In the Kansas City area, two groups simultaneously submitted applications in 1999 to establish centers and both were approved. While the Kansas Women’s Business Center and the Missouri Women’s Business Center are just a few miles apart, their service areas extend beyond the metropolitan area in different directions. Their programs differ and both provide services to women on both sides of the state line.
The Kansas WBC is a part of the Enterprise Center of Johnson County and is located in Lenexa. It is charged with providing services for women entrepreneurs throughout Kansas. Though most of the center’s work is with local women, it serves as a referring center for women in central and western Kansas, hooking them up with small business development centers at community colleges in their areas, said Kelly Pruneau, client services manager.
The Missouri WBC operates through the Growth Opportunity (GO) Connection at 4747 Troost and serves western Missouri along the Highway 71 corridor up to Columbia, said Lori Kravets, executive director of the GO Connection. Because that center is heavily involved with financing through the GO Connection, it also serves men. Almost 40 percent of the center’s clients are men now, she said.
Both centers started out providing programming mostly for start-up entrepreneurs, but over the past seven years have added services for women with more advanced companies.
“When the centers started, we didn’t have anything for people who were past the start-up stage. Now most have programs that look at wealth building and growth, and even retirement strategies,” Kravets said.
As they have evolved, the centers have also added roundtables where business owners meet and support one another.
Providing Support
Chris Jackson, president of NCES in Olathe, was one of the first clients of the Kansas WBC. After she bought her company, Jackson participated in one-on-one counseling with staff and took some classes. Eventually she joined a roundtable of other business owners. Eight years later she is still participating but her roundtable is for high growth companies.
“What they do is take your needs and what you need from them and let you evolve,” she said. “Everyday I am just astounded at what I learned through those programs, having my peer group. It’s like knowing you’re not in this alone, that there are other women business owners going through this with you.”
To pay it forward, Jackson now serves on the advisory boards for both WBCs to help them constantly re-evaluate their programs to meet changing needs.
Pruneau said an important purpose of the centers is to not only connect women who are interested in starting a business with available resources, but also to provide support as their companies develop. Whether a woman is thinking of starting a business, expanding one or exiting, the center has a roundtable or a class or staff person to meet with her, she said.
“Being a business owner is a pretty lonely place to be even though you are out among people all the time. Even when you are running a department or a corporation, you have other people around you that you can bounce ideas off,” she said. “When you are a business owner, the responsibilities are on your shoulders. It’s important for women to share thoughts and ideas. Otherwise you are just making every decision on your own.[U2]. It’s hard to put that benefit into numbers.”
Growing Louder
As women business owners move away from lifestyle companies that they operate out of their basement and more toward high-growth, multimillion-dollar entities, their cumulative voice has become stronger and louder.
“We have seen an enormous amount of growth in a not-very-long period of our history,” said Goldstein at the SBA. “I see no reason it won’t continue to be successful. The growth has not slowed down.”
As plans solidify for a commemorative celebration of the anniversary of H.R. 5050 this fall, a new movement is under way on a successor to it, said Littlejohn, whose company, Quantum Leaps, is coordinating it. Information on “The Roadmap to 2020—Fueling Growth: Women’s Enterprise Development from 2009 to 2020” will be released in the fall around the celebration.
“We’ve made huge strides since the passage of H.R. 5050, but we still have a long way to go to get to where we want to be,” Littlejohn said. “Now we’re very much focused on growth, and the strategies and ideas that we’re developing for the roadmap will get us there.”
To young women entrepreneurs who are just starting out, she says, “The sky’s the limit. Don’t think of anything in your way as an obstacle. It’s just something to figure out how to get through, or go around.”
And Littlejohn knows.