NEW YORK, Sept. 29, 2014 /PRNewswire/ -- According to EY's independent study, "Force Multipliers, How three fundamental adaptations can help women entrepreneurs scale big," female entrepreneurs can take three steps to significantly accelerate their companies' growth: define a purpose, build a community and adapt their leadership style.
These recommendations draw upon EY's knowledge base and long history advising high-growth entrepreneurs, as well as a survey of members of the EY Entrepreneurial Winning Women™ program conducted by Babson College's Center for Women's Entrepreneurial Leadership, to identify best practices for scaling women-owned businesses. EY Entrepreneurial Winning Women, currently in its seventh year, is an annual competition and executive leadership program that identifies a select group of high-potential women entrepreneurs whose businesses demonstrate real potential to scale — and then helps them do it. The results show that the program works: participant companies' total 2013 revenue was an impressive 63 percent higher than their total revenues in the years when they joined the program.
Although recent data shows that women start businesses at twice the rate of men, only two percent of female-owned businesses break US$1 million in revenue. Conversely, businesses owned by men are 3.5 times more likely to break US$1 million. Through the Entrepreneurial Winning Women program, EY provides a clear path for women business leaders to scale up their businesses and redefine what's possible. Currently, participants are in the top two percent of women entrepreneurs in terms of revenue; 50 percent have revenues over US$10 million, with some rapidly closing in on or exceeding US$100 million in revenue.
Through the program, EY has identified three advantages that contribute significantly to the accelerated growth of the Entrepreneurial Winning Women companies: an authentic purpose, a strong community and a flexible, adaptive leadership style.
Incorporating these factors has helped Entrepreneurial Winning Women to grow their businesses at unprecedented rates. Seventy percent say they are now thinking bigger and setting higher company growth goals, and many think up to 200 percent annual growth is possible, due to what they've learned in the program:
- 45 percent report that it is easier to raise funds after being selected for the program.
- 79 percent say the program has expanded their professional networks.
- 65 percent report that the program positively impacted the media visibility of their business.
"Women-led businesses are key economic drivers. They employ 18 million people and generate US$2 to US$3 trillion in the US economy alone. Yet their companies rarely scale as large as they could. We believe, however, that is possible to shift this pattern," said Kerrie McPherson, Principal and North American Entrepreneurial Winning Women Executive Sponsor, Ernst & Young LLP. "In the program's seven years, we've helped nearly 60 participants grow their companies — these women average approximately 20 percent revenue growth annually in the first year with the program, and as high as 50 percent in the second."
Defining your business's purpose - why do you do what you do – is key to long-term success. It serves as the guiding principle for a company, ensuring that a business can continue to expand while keeping the core values and culture that made it successful. Having an authentic purpose helps build trust and strong relationships between brands and their customers, employees, and shareholders.
In addition, studies show that a strong purpose drives growth and profitability. To illustrate this point: an investment in the Stengel 50 (the world's 50 highest-performing companies that have a strong purpose) over the past 10 years would have been 400 percent more profitable than an investment in the S&P 500.
Strong Community of Peers
Before the Entrepreneurial Winning Women program started seven years ago, most of the participants said they worked alone with very few peers to consult or role models to emulate. Today, they say being part of a community of like-minded peers inspires confidence (86% report very high or high confidence), which leads them to think bigger and bolder. In fact, 92 percent of participants report an increase in their desire to scale their companies, while 40 percent are actively seeking outside funding to grow.
Enlightened Leadership Style
Most successful entrepreneurs share similar characteristics: grit, perseverance and curiosity. But how you express these qualities evolves as a company grows, and successful leaders must learn to work on the business, not in the business. Becoming more removed from day-to-day operations and sharing responsibilities allows entrepreneurs to become the leader their business needs as it scales, while also encouraging growth, innovation, and job creation. More than 80% of Entrepreneurial Winning Women said they take a collaborative approach to strategic decision-making, enabling the teams they hire to help them operate their companies while they focus on what's next.
In the past 17 years, there has been a significant increase in the number of businesses started by women and the revenue they generate. Despite this growth, a significant gap does still exist between the size of companies started by men and women. The Entrepreneurial Winning Women program gives women entrepreneurs the tools to scale and realize the full potential of their companies while transforming them into the peer role models many women entrepreneurs say they didn't have.
About EY's Entrepreneurial Winning Women™ program
As the leading advisors to entrepreneurs worldwide, EY knows that access to successful role models and business-building networks are critical for entrepreneurs to accelerate growth. With the EY Entrepreneurial Winning Women™ program, the organization's resources and convening power are channeled to help women entrepreneurs realize the full potential of their companies. The program identifies and celebrates second-stage female entrepreneurs and provides them with personalized one-on-one business insights and advice as well as insider access to strategic networks of established entrepreneurs, executives, advisors and investors. Unlike many programs, which are focused on helping women to start a business, EY's Entrepreneurial Winning Women program supports women with existing enterprises to scale up and become market-leaders.
About EY's Strategic Growth Markets Practices
EY's Strategic Growth Markets (SGM) practices guide leading high-growth companies. Our multi-disciplinary teams of elite professionals provide perspective and advice to help our clients accelerate the path to market leadership. SGM delivers assurance, tax, transactions and advisory services to thousands of companies spanning all industries. EY is the undisputed leader in taking companies public, advising key government agencies on the issues impacting high-growth companies and convening the experts who shape the business climate. For more information, please visit us at www.ey.com/us/strategicgrowthmarkets, or follow news on Twitter @EY_Growth.
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This news release has been issued by Ernst & Young LLP, an EY member firm serving clients in the US.