Businesses founded by women ultimately deliver better revenue2. Not a bad thing to hear if you're a woman with a business. But, when 92% of partners at the biggest venture capital firms in the USA are men, it is disappointingly still true that those male investors are less likely to put their money into businesses fronted by female founders.
Women drive between 70-80% of consumer purchases3 – yet the lending gap is a massive 31%, according to Biz2Credit4. It makes success stories all the more impressive when they do happen, so how did our female founders go about launching their businesses?
"After our very first product launch on Kickstarter back in 2015, we had enough money for the production of our product, but it sold out quickly and we really didn't have any cashflow to invest in more product – or anything else, for that matter. We had quite a few conversations with very interested investors, but right before these deals were about to be made, they would pull out and let us know that they wanted to wait to see how we would do on our own. This didn't leave us with many financing options, but we were not ready to give up. For almost a year without very much inventory, we thought we were going to go out of business; but with a lot of passion and creativity, we bootstrapped our own crowdfunding business."
If you don't have the funds to turn your idea into a reality on your own, there are now, thankfully, ways to get started other than pitching to people who have no experience of the problem you're trying to solve. Angel investment firms and grant institutions that have been set up specifically to lend to women are now prevalent (search for the likes of Cartier, Amber Grant and Eileen Fisher) while crowdfunding platforms let people from around the world judge your idea on its own merits.
With 70% of female-founded businesses getting off the ground by either crowdfunding or bootstrapping (launching your business with personal funds rather than investment), it's a tough route to success - but as Vicky says, it does bring its own benefits: "Allowing our customers to get in on a product at wholesale price for a limited time created a sense of urgency. It was a risk, but the business model created immediate results."
"When we began in 2015, we launched completely on our own. We had US$20k saved up from other ventures and we bought our first lot of stock with that… from then on out we have bootstrapped it and we’ve gone from strength to strength by saving, spending and investing wisely. In 2015 we turned over US$300,000, and in 2020 we are set to turnover close to US$6 million".
A key trend amongst winning female founders is a secure understanding of the marketplace, based on first-hand knowledge - with women being more likely than men to launch businesses based on previous experience of either using or making a product:
"The journey started when I began collecting dolls; I realised that there was something missing from the market – more dolls of color. Dolls that represented not just people of color, but also people with albinism. I design dolls based on my personal experience and based on what it is that I know a lot of people like me are going through. I just felt like a lot of the bigger brands had failed to understand what the environment is and what's really needed. So I took it upon myself to see what I could do to fill that gap."
Whilst the benefits are clear – you know there is a gap in the market and have a great idea how to fill it – this approach also brings challenges, especially if you don’t have manufacturing or supply chain experience in the sector you are entering:
Nikki Clarke: "The biggest challenge when beginning was my lack of experience in fashion design. I had never designed any clothing before – let alone a nursing sports bra, which is quite technical! I did a lot of reading, researching and met with people who could help me in what I was trying to do, and I got there… eventually! Our first bra took about two years to come to fruition… we’re a lot faster now."
When creating a company from the ground up, it can be difficult to know where to turn for guidance – especially when it comes to suppliers. 48% of female founders cite a lack of suitable mentors or advisors as blocker to success5. Again, going with what you know - and therefore keeping as much control as possible - has proved to be a good policy for many:
"I spent a year finding the right manufacturers, suppliers, designers, and other partners to transform my concept into a living, breathing company. I also leveraged my background in branding to develop a customer experience that aligned with what Fred and Far, the Self Love Pinky Ring, and I stand for at every touchpoint."
"When I first started NUMI, I worked with a production company based in New York and the product was made in China. After one production run overseas, we moved all our manufacturing back to Canada, where we are able to visit our factories on a regular basis to maintain our high level of quality control. Because we were being surcharged for our low minimums in China, we were able to achieve similar pricing locally. We were also able to make smaller production runs, more frequently, to better manage cash flow. And working with local suppliers meant we were able to ask for terms with our suppliers so cash was not tied up in advance of being able to sell the product".
Once your brand is ready, getting your product in front of people is paramount to your success. But when every penny counts, how can you best invest your time and money to ensure it works as hard as you do?
Monika Trojanowska, Aftersocks
"Branding was – and has always been – the most important aspect of my business. It took me a while to discover and develop my brand’s voice and persona, but once I found it, I have religiously stuck to it. The biggest challenge I had in branding and packaging was finding the right suppliers who understand my vision, and who can interpret my aesthetic within my budget."
Successful women in business play to their strengths – and those of their target market. Making genuine connections and creating communities around a cause can reap dividends when it comes to establishing a loyal customer base:
Monika Trojanowska: "In a world overflowing with new products and brands every day, it can be tough to stand out. Even if you have a great, unique product, you can easily get copied. One of the things we have done to build a strong brand which stands out was starting a charity. With each pair of Aftersocks sold, we donate one to the homeless. We are doing good, and our customers feel they are helping the less fortunate as well by buying our products, which creates a positive feeling towards our brand and is something the customer will remember."
Melody Godfred: "While I’ve explored various digital marketing strategies – like Facebook/Instagram advertising, Google advertising, celebrity and press outreach, and email marketing – my single greatest marketing initiative has been cultivating a loyal, engaged customer base that lives and breathes our mission; that base serves as my biggest group of advocates. Today, the brand’s expansion has come not through new products, but through a richer original content offering (new inspirational content daily) and a robust community (I feature customer stories on social and our website). I’ve created this community by asking women to sign the Pinky Promise Pledge Card that comes with each Self Love Pinky Ring and share a photo on social – especially Instagram where our community is most active. Each day, I personally DM, comment, share and connect with my Self Love community... this is the kind of brand loyalty you can’t buy with marketing dollars."
It turns out, in fact, that what you don't sell can be as important as what you do - and how your customers feel can be more important for retention than what they buy.
When you're growing your business globally, you need a solid team and suppliers you can trust. But how do you build those relationships, or know who to trust? Here's how our interviewees got to where they are:
"The biggest challenge we have at East Meets Dress when working with suppliers internationally was maintaining the quality bar of our dresses. Then we made a trip to specific cities in China that specialized in our craft and visited different dressmakers in person. It was very helpful for us to see their dresses and production process in person – and, more importantly, whether their business values aligned with ours. Our long-term partners have been those who share our business values of quality and putting the customer first. When our dressmakers see that we prioritize quality, customer service and are responsive and respectful to them, it’s much easier to develop mutual trust."
Nikki Clarke: "Right up until 2017, my husband and I did everything in and for the business… it was full on! Eventually, both of our parents came on board to help with packing, and now we have 14 staff on board, managing various parts of the business. Slowly, but surely as we grew more profitable, we could hire and delegate. It was hard for me in the beginning to let go, as I had done everything and this was my ‘business baby’, but the only way to grow is to hire the best people and let them do their jobs, once you’re happy with how well you’ve trained them (you’ve got to train them well!) The right attitude is far more important to me than a plethora of qualifications."
Michelle Shemit: "We have grown our team slowly, but very thoughtfully. Having a clear idea of your organizational strategy and job descriptions is important. We look at organizational strategy based on revenue targets, not years, as we're growing quickly. It's also best to always be interviewing so that when the time comes to fill a position, you are ready."
Now, we like to think that we've got logistics covered here on Discover, but each business poses a unique set of challenges for its owner. According to research by StartupNation, 68% of women run their businesses from home, while women are more likely than men (67% vs. 61%) to be using their evenings to run their side project. With these things in mind, making the process more streamlined takes on extra importance, so what advice would our female founders offer prospective SME owners on the subject of fulfillment?
Monika Trojanowska: "I would say having your logistics in place is almost as important as having a great product to sell. If the product gets delivered way too late, or – even worse – does not get delivered at all, your customer will probably not reorder, even if they love the product. Although shipping with budget couriers would seem tempting for your start-up company for obvious reasons, there are some important things to consider while choosing your logistic partner, as packages shipped via budget couriers aren't traceable nor insured."
"Using a well-known logistic partner like DHL Express can help to reassure your customer that the order placed will get delivered to them. We provide both options on our webshop – a cheaper one without a tracking code, and a more expensive option with track and trace. We see that most of our customers choose the option with the track and trace, so they are always able to see what their package’s status is. This is not only convenient for our customers, but saves us a lot of customer service questions – as most of those are shipment status related."
Kateryna Panchenko, MyClover
"Our start-up has a limited number of resources, and we needed the delivery service to do the maximum from the moment of picking up the bag to the end point handling the shipment to the backer. The biggest challenge we faced though came during the delivery process."
"When we shipped our first bags, we didn’t know about the regional tax – different countries have different taxes. Because we promised the delivery fee to be included in the price – i.e. free delivery with every purchase, backers expected completely free delivery. The first customer who received the bag in Germany was asked to pay the local tax, and refused the package altogether."
"Now, we have signed a direct contract with DHL Express where we discuss individual tariffs. DHL Express is our main partner, friend and assistant – allowing our business to grow rapidly."
Our gratitude to those female founders who contributed to the advice in this article, we hope you find inspiration from it. And don’t forget, your DHL Express account manager can help you make the right decisions when growing your global business, so apply for an account today.
2 Why Women-Owned Startups Are a Better Bet, Boston Consulting Group
5 25 Intriguing Facts About the State of Female Entrepreneurship, Startup Nation