The Concrete Ceiling

By Victoria Wurdinger | 10/11/2011 12:18:00 PM

 

Where Businesswomen Still Get Stalled


AMERICAN WOMEN HAVE REACHED parity with men in terms of education, and in the salon industry, they dominate business ownership. In 2010, 30 percent of all small business owners were women; while 61 percent of salon businesses were women-owned. While women’s gains over the last 50 years are dramatic, recently, advances have flatlined. According to Women in America, a March 2011 report from the White House, women’s educational gains have outpaced men’s, and more women than men participated in work-related adult education. In the last 10 years, 2 million more women than men graduated from U.S. colleges; and 70 percent of current high school Valedictorians are female. Still, the pay gap persists at all levels: women still earn about 75 percent of what their male counterparts do, and female representation at the upper echelons of corporate America remains pitiful.

According to Development Dimensions International (DDI), a global talent development firm which conducted the 2011 Global Leadership Forecast, the further up the management ladder you look, the more underrepresented women are. Despite the fact that women comprise almost half of the workforce, they hold just 10 percent of S&P executive positions.

The Way We Are

Voices on Equality

FEMALE SALON OWNERS SHARE THEIR OPINIONS ON THE PROS AND CONS OF BEING A WOMAN IN THE BUSINESS OF BEAUTY:

Laura Ortmann, Ginger Bay Salon and Spa, St. Louis, Missouri: “As a female attorney, I had many road blocks in law firms and at the courthouse. However, as a salon and spa owner, I don’t think our challenges are much different than they are for male owners. The beauty industry is very accepting of diversity and gender doesn’t seem to be an issue.”
Barri Allen, A Signature Hollywood Salon, O’Fallon, Illinois: “I think it is much harder for women in small business. Loans are harder to get, and we are considered coldhearted if we run our businesses like men without emotion.”
Inez Gray, Habitude Salons and Spas, Seattle, Washington: “I think we as women are much better equipped for the multi-tasking, emotional connection and intuition that is needed in business today. I truly believe that the experience of motherhood makes us better leaders and vice versa. I think women who can find the perfect balance of strength and nuture are unbeatable. I want my daughters to be successful career women and I want my son to marry one!”
Wendy White McCown, Signatures Salon, Lake Charles, Louisiana: “I feel for the most part women have reached a level of respect in the workforce. The difference between strong leaders, men and women, lies in their leadership abilities.”
Tina Morschauser, Rejuvenation Spa, Madison, Wisconsin: “They key advantage of this industry for women is the flexibility of scheduling for family balance. For example, in the past year, both my parents passed away from cancer, and I had the most flexibility from my job in comparison to my siblings. At our salon, we have at least five women who work here who out-earn their spouses!”
Gretchen Arndt, Animare Salon and Spa, Newport News and Hampton, Virginia: “As a women in my mid- 40s, I don’t think I ever felt it was more challenging. However, I also know that the women in my family were stronger than most—both of my grandmothers were born in the early 1900s and worked. One took over the family-run coal yard after her husband died, the other went through a divorce, but was able to buy a home and pay her own way her whole life.”
Coral Pleas, Cutting Loose Salon, Sarasota, Florida: Women within the professional beauty industry have been leading for decades. Once the industry changed from barbershop to full lines and services being offered at salons around the world, women were in place to lead. Because of this entrenched trained position, the opportunity to open one’s business, achieve upper management or be an independent has proven to be successful for many of us.”
Cindy Levi, Geno Levi Salon, McMurray, Pennsylvania: “Leading a business in today’s economy provides new opportunity to think more creatively about the resources available to us. Although it may appear to be easier for our male counterparts to negotiate through certain aspects of business owenrship, women are capable of achieving equally successful results by inspiring those around us to affect the outcomes we desire.”
Sondra Thrasher, Appearances Hair Color and Design Studio, Westminister, Colorado: “It is interesting to me that most of what we view within the media that pertains to beauty icons are those of men; however I am starting to see that change more and more with the reality shows that often show women in charge and in leadership positions.”
Sally Browner, Pepper’s Salon, Puyallup, Washington: “I do think there are more challenges for women in business, but I believe that a woman who is confident, has the right vision and has the ability to act deliberately and intelligently in making tough decisions can rise to the top, just as well as a male business leader.”

The Professional Beauty Association’s (PBA) June 2011 report, Economic Snapshot of the Salon and Spa Industry, notes that 84 percent of those in personal appearance occupations are women, compared to 47 percent of employees in the U.S. workforce. No surprise here, since women tend to dominate service and retail industries, according to the Small Business Administration (SBA). What else is happening with women-owned businesses? According to the U.S. Department of Commerce Economics and Statistics Administration’s (DCESA) 2010 Report, Women-Owned Business in the 21st Century, in the last decade, women-owned businesses:

• Grew faster than men-owned businesses.

• Increased employment (while male-owned businesses employment declined).

• Accounted for more than $1 trillion in economic output.

On the downside, notes the report, womenowned businesses start smaller, fail more often, grow slower and have lower levels of revenue than male-owned businesses.

Feminine Mystiques and Critiques

Several studies pinpoint finances and chosen industries as primary reasons for male/ female business gaps: Women do not ask for or obtain business financing as often as men do and are more likely to rely on credit cards or government financing. The SBA Of ce of Advocacy’s report, Developments in Women- Owned Business (June 2011), which attempts to place women-owned business in a broader perspective, tracked data for a decade and notes that male and female-owned businesses share the same general development patterns. The report also notes that:

• Nationally, the number of women-owned businesses increased by almost 44 percent, from 5.4 million in 1997 to 7.8 million in 2007.

• The number of women-owned businesses grew at twice the rate of men-owned businesses for the period from 1997 to 2007: 44 and 22 percent, respectively.

Of course, no statistic can address the complexities of discrimination and gender stereotyping. Additionally, reports like the DCESA’s note that women work fewer hours and are more concerned with work flexibility and family-work balance than male business owners. Other reports claim this is an assumption that holds women down. Regardless, there are specific challenges all professional women face. These include income/ business financing, leadership and actual power.

Income and Financing Gaps

The DCESA’s aforementioned report notes: “While a high share of all business owners indicated they used personal or family savings to start or acquire their business, a substantially lower share of women-owned than men-owned businesses used a bank loan (5.8 percent vs. 12.7 percent). This same pattern occurs in the use of financing sources to expand or improve businesses: Women-owned businesses were less likely than men to use a bank loan (4 percent vs. 10.7 percent).”

Researchers at PNC Financial Services Group surveyed nearly 1,300 women-owned businesses recently and found that 59 percent of female entrepreneurs used a business credit card to fund their business; 44 percent used personal or family savings. Finance experts say the decision to rely on credit cards to fund a business could hurt credit scores and increase debt.

What can women do to improve borrowing opportunities when tight-fisted lending institutions put 2011 small-business loans down 3 percent from 2010? Maintain good credit scores; be prepared to justify every expense and demonstrate your businesses’ ability to survive in tough times. Avoid billing everything to the business, so it appears unprofitable on paper.

Women tend to overlook Venture Capital (VC) to seed growth, but Crista Bailey, CEO of naturallycurly.com, says the company recently raised $1.2 million growth capital, with almost half sourced from a nationwide angel network and the Golden Seeds venture capital rm, which invests in companies founded and/or led by women. (John Paul DeJoria also invested.) Her tips for securing VC funding:

• Target investors who understand your business or have invested in similar businesses. “Understanding an investor audience’s track record can eliminate time spent on investors who may not get your concept, and give you an advantage with those who do get it,” says Bailey.

• Research what investors can contribute beyond money, such as helpful contacts within their network or specific business experience that would be useful. “Thinking beyond money will help build that connection between you and your investors.”

• Listen to investor feedback. View objections as opportunities to improve upon how you tell your story, and try again.

According to Catalyst Research’s February 2010, “Pipeline’s Broken Promise,” which tracked business grads: “Even after accounting for experience, industry and region, women start at lower levels than men, make on average $4,600 less in their initial jobs, and continue to be outpaced by men in rank and salary growth.”

Leadership Issues

Catalyst’s research on Fortune 500 companies notes that in 2010, women held 15.7 percent of Board seats—a 0.5 percentage point gain over 2009. Solutions to higher corporate representation include: aggressively seeking out more responsibility, asking for international assignments (showing willingness to travel), and promoting yourself through advocates— that pool of higher-ups less likely to be female. DDI discovered that when a job is posted, women will apply for it if they meet 100 percent of the criteria; men will if they meet 60 percent. Jazmine Boatman, the manager of DDI’s Center for Applied Behavioral Research says when it comes to leadership development, the quality has decreased over the past two years, and leadership development is the pipeline through which women ascend.

“Coaches should use formalized systems with specific, assigned responsibilities,” says Boatman. “How they coach a person in should depend on the individual’s level, professional interests and where he or she wants to go.” Coaches can be advocates, as well, she adds; the more formal supporters a woman has, the better.

Power Plays

With coaches to guide them and advocates who promote them, women should be able to crack the concrete ceiling. In the salon industry, hairdressers and salon owners gain power through a combination of manufacturer relationships, their own product lines, celebrity clients, local reputation, association Board positions and a pro table business worth franchising. Star-quality employees matter too; keep them with creative co-ownerships or try “visiting stylist” agreements.

If you’ve been in the business long enough, you might remember the attempt to franchise Noelle the Day Spa, and its failure—supposedly because the renowned and now-deceased owner Noel di Caprio was so unique, her personality could not be duplicated. True, you can’t fake caring, but with today’s formalized customer-service and training systems, total branding and social media outreach, she could have been a contender. It all starts with power-player systems.

 

 

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