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SMALL BUSINESS | Q & A

A Friendlier Climate for Women

Lucile Reid, who heads Wells Fargo Bank's small-business loan program for women, recently discussed issues and trends related to female business owners with freelance writer Diane Seo.

September 03, 1997|DIANNE SEO

Q: Why are female business owners less likely than men to obtain financing, even though women-owned businesses are the fastest-growing segment of the business economy?

A: There are so many reasons, and there is no single, obvious answer. My sense is that female business owners own service-type businesses, such as advertising, marketing and public relations companies that don't require a lot to set up. So their need for loans is less critical and less a normal part of their business. I think women also are concerned about receiving credit, and they're less familiar with the process of obtaining a loan.

Q: Do you believe women have been discriminated against in the banking world?

A: I don't think anyone would say discrimination is consciously going on. But what's important is that women should not perceive that any discrimination is taking place. You would never want anyone not to seek credit if they need it.

I think women's attitudes toward banking have changed dramatically in recent years. A study we conducted with the National Foundation of Women Business Owners in the fall of 1996 showed that there is no difference between how women and men perceive banking.

The study also showed that women use credit more for expansion, while men use it to pay off debts. There were many differences between the results of that study and a 1994 study. The biggest difference is that women don't rely as much on credit cards to finance their companies, which is a marvelous change.

Q: Aside from securing financing, what are some of the biggest obstacles facing female entrepreneurs today, and what can be done to eliminate those barriers?

A: Women face the same barriers as all small-business owners. There is a lot of frustration with government regulations on hiring employees and all the paperwork that entails. And I think people who have young businesses have difficulty juggling all their responsibilities. Managing a business is an enormous challenge, whether it's hiring people or keeping track of the books.

I would recommend that people join business organizations and support groups, or take classes at community colleges to learn more about business with others. All of the community colleges have good programs. The Small Business Administration, the Chamber of Commerce and various associations also can help.

The loneliness of being a business owner sometimes can be the biggest challenge. But I've found that women are very good at networking and asking attorneys or other small-business people for advice. I think it's very positive that women are quite open to doing that.

Q: In what areas do you see the most potential for female business owners?

A: The fastest-growing areas are nontraditional industries, such as manufacturing, auto repair, things like that. That's where there is opportunity. The biggest growth areas are related to high-tech services, such as computer repair, networking, technology training. I'm seeing a lot of women getting involved in technical areas. What I've seen is that women who have technical skills do well because they are very good at working with people. Importing and exporting is another growing area, particularly on the West Coast. What's attractive about import-export is that it's growing, and when an industry is growing, it's easier to enter a business and not displace anyone.

Q: How is today's generation of female business owners different than previous generations?

A: For one thing, today's generation of female business owners are a generation younger than women with established business who are in their 40s and 50s. I think it's far more acceptable for women to enter business now than it was 20 years ago, so less groundbreaking is necessary. There's more of a "Why not?" attitude than an attitude of "Gee, I'm going to go out and do this."

There seems to be greater freedom of self-determination rather than just gritty determination. Right now, 36% of all small businesses in this country, and 39% of those in California, are owned by women. Because of this, I think there's a much greater acceptance among the public of purchasing something from a woman.

Historically, women have started small businesses after they gain some experience. It's something they do in their 40s. But now, we're seeing 18-year-old women starting companies. I think we're seeing a lot more young female entrepreneurs because of all the opportunities out there.

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Q: Why are more women starting their own businesses?

A: There are lots of reasons. Some technology trends are making it easier to start a business. Now, with a personal computer, a modem, an answering machine, a beeper and a mobile phone, you can leverage a one- or two-person business and make a real go at it. Technology has made entry into business easier.

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