Women Entrepreneurs: A Booming Field Filled with Obstacles

Starting a Women-Owned Business by attorney Caroline Worley, Esq.

Women-owned businesses are here to stay. In fact, the pace of women starting businesses is quickly becoming on par with their male counterparts. In 2008, nearly 10.4 million firms are owned or partially owned by women; they employ more than 12.8 million people, and generate $1.9 trillion in sales. These women-owned firms account for 41% of all privately held firms in the U.S. However, despite these promising statistics, entrepreneurs (particularly women) face quite a few obstacles to ensure their business dreams get up and running and stay there.

What's the cause of these obstacles? For many women, it is simply a lack of some core business knowledge while others are unfamiliar with the field they are entering. From a lawyer's perspective, there is an all too familiar list of issues which often get new businesses in trouble. A small example of some problems:

•1. Failure to legally organize the business properly, e.g. as a corporation, LLC, or partnership, and to follow legal formalities to protect their personal assets.

•2. Failure to prepare a business plan: This is a businesses' guide to becoming successful and profitable, as it not only provides strategy, but is often the key to obtaining funds for the business.

•3. Failure to negotiate a favorable lease: A lease is generally not something to be treated as take-it-as-you-get kind of deal. Failure to thoroughly review and negotiate a lease can lead to some hard knocks, especially if an exit strategy from the business is ever required, or even more so if the business needs more space.

•4. Failure to get terms of agreements in writing and/or reviewing those contracts offered to you: Few things get more businesses, especially new businesses, into trouble than unnegotiated or oral contracts. It pays to look beyond the upfront costs and to review service, vendor, supplier, and customer contracts and purchase orders with a careful eye, and to get everything in writing. Be unafraid to negotiate. Nothing is non-negotiable. If you are told it is non-negotiable, then maybe you reconsider working with the particular business. If all parties understand the rules of the game, a longer-lasting business relationship will be created.

•5. Failure to finance or properly capitalize the business: A wealth of opportunity is available to small businesses and more than ever to women-owned businesses. Training workshops, conferences, and one-on-one counseling are often available to advise how to initially set up the business as well as how to keep it growing. The key to a successful and growing business is the ability to obtain capital and to use it to make the business grow. Sites such as the SBA.gov Small Business Planner [1] and the Women's Business Center [2] by Alex CDC provide excellent information as to loans and grants, such as the SBA 504 loans available to grow your business.

•6. Understanding employment law and protecting trade secrets: After growing to a few employees, ensure that you understand your obligations under state and federal law. This an area which often requires professional advice, including what laws are applicable, such as the Fair Labor Standards Act, the American with Disabilities Act, Family Medical Leave Act, and others. You need to be concerned about what posters you must have, and how to determine employee benefit plans if you decide to have them. This is also the area which coincides with how to protect your ideas and your product. A new business must protect its trade secrets from employees who could walk out the door with them and start a competing business.

•7. Employ competent and trustworthy advisors that are looking out for your interests. This includes a good small business attorney, small business accountant, commercial leasing agent, commercial insurance advisor, a small business consultant, and others.

Hopefully, the above bullet points have provided with some important and helpful information. If you are looking for a small business legal advisor, please feel free to contact attorney Caroline Worley. Ms. Worley is a small business attorney that understands the particular obstacles facing women-owned business. She can be reached at 614.340.0011. She represents small businesses throughout the State of Ohio.