Tweet

Huge Growth: Two Women Entrepreneurs, Two Ways To Deal

Written by: Michele DeKinder-Smith

Article Overview: For some female entrepreneurs, huge growth can come out of the blue. Although there are different ways to handle it, one thing remains: businesswomen must deal with it. This article examines the way two types of female entrepreneurs might handle huge growth in their business – and the effects their reactions may have.

Huge Growth: Two Women Entrepreneurs, Two Ways To Deal

Growth. It's a word whispered through the lips of female entrepreneurs as they dream about their businesses. But even though you've dreamed of it since you hung out your shingle, are you really ready to handle it when it shows up on your doorstep? Research by Jane Out of the Box, an authority on women entrepreneurs, reveals five distinct types of businesswomen - and five ways they may handle growth. This article details the way two of those "Janes" may handle growth.

Accidental Jane is a successful, confident business owner who never actually set out to start a business. Instead, she may have decided to start a business due to frustration with her job or a layoff and decided to use her business and personal contacts to strike out on her own. Or, she may have started making something that served her own unmet needs and found other customers with the same need, giving birth to a business. Although Accidental Jane may sometimes struggle with prioritizing what she needs to do next in her business, she enjoys what she does and is making good money. About 18% of all women business owners fit the Accidental Jane profile.

Accidental Janes often rely on word of mouth and deep relationships to build their businesses. Massive growth opportunities may catch her off-guard because she's not typically seeking growth, feeling content with where she is today, overall. Therefore, a significant growth spurt might feel overwhelming. It's important to first remember that you do have choices - you don't have to seize every opportunity that comes your way. Consider whether you really want the opportunity, or whether you'd rather you're your business the way it is.

If you decide you desire the growth, remember that you have several factors working in your favor. First, you are a consummate professional - so your new clients/project will undoubtedly be a success. Secondly, you're very well-connected. Reach out to your friends and associates in the business and "share the wealth." Explore ways to partner that get the work done effectively and well, without keeping you busier than you prefer to be. Finally, because your business is generally supporting your financial needs, now may be the ideal time to hire a part-timer to help with some of the tasks you least enjoy, whether that is handling your books, cleaning your house, or doing the filing.

Whether you pursue the opportunity or not, make sure to periodically check in with yourself to make sure you're still happy with what you're doing. One of the most wonderful qualities of Accidental Jane is that she is content, overall, with her business and her life. So make sure massive growth is handled in a way that ensures you maintain your balanced life.

Tenacity Jane is an entrepreneur with an undeniable passion for her business, but who tends to be struggling with cash flow. As a result, she's working long hours, and making less money than she'd like. Nevertheless, Tenacity Jane is bound and determined to make her business a success. At 31% of women in business, Tenacity Janes are the largest single Jane type.

As a Tenacity Jane, huge growth may seem like the ticket to the place you always imagined your business would go. It may be your dream come true - so to take best advantage of it, make sure you create a thorough plan and carefully examine the finances before jumping in with both feet.

Planning and budgeting go hand-in-hand when growing your business. Much of the planning for massive growth has to do with ensuring timelines are reasonable and there is sufficient profit to make the work worth it. Consider this example: You sell a product for $100 that costs you $80 to make and takes 30 minutes per order to customize. You've got sales of $5,000 a week (50 units X $100). You're working on orders 25 hours a week (50 units X 30 minutes) and clearing $1,000 a week (50 units X $20 profit) - for hourly "working time" pay of $40/hour.

A retailer has just called to say they want to order in bulk. They want an additional 100 units a week, and they want you to reduce your cost to $90, which they will mark up to earn their profit. It's thrilling to think about doubling your volume with just one customer - but can you create a financial plan that makes this work?

* You'll need an extra 50 hours a week in product customization. You clearly can't do that yourself, so you plan to hire 2 people at $15/hour for 20 hours per week, each. This is going to cost $600/week. And, you'll do an extra 10 hours a week yourself. Managing the two people on your team will take an additional 5 hours of your time each

week.

* Your weekly revenue will now be $14,000 ($9,000 from the 100 new units at $90 each, plus your existing customers at $5,000/week) - massive growth!

* But your income per hour of your time actually diminishes. You "clear" only $1,400/week (your original orders of $1,000 plus only $400/week on the new customer orders after you pay your team and because the new customer wants you to reduce your rate). Remember, too, you're working an extra 15 hours - so your hourly rate falls to $35/hour. And you're busier than you've ever been.

Another planning consideration is cash flow. When will you pay your two people? When do you pay your vendor(s) who provide the materials for the product you're making? And, importantly, when will you be paid?

Your out of pocket costs for materials to make the product will triple, because you're now making 150 per week instead of 50 units. If you have to front those costs and if you pay your team members weekly, costs will really build up. In a four-week month, you will "front" $50,400 for your business. If your customer is going to pay you on 30-day terms, do you have the $50,400 you will need to keep the business afloat while waiting for the cash to flow in?

This exercise isn't meant to be bleak - it should be empowering! By breaking down the plan and budget, you're now in a position to really negotiate with this customer. All of the following are options:

* Tell the customer you can't sell to them for $90, but you can for $95. (This would boost your hourly rate to $47.50 and clears $1,900/week.)

* Tell the customer you can only negotiate on price if he/she pre-pays monthly (ensuring you have cash flow).

* Hire a 3rd person at $15/hour to do half of your work. (This will add an additional $300/week in expense, but your hourly rate will increase to $55/hour even under the $90 pricing scenario - and you'll have more time than you do today to find another big customer.)

As you can see, taking the time to plan and budget will ensure that your massive growth doesn't break the bank. Knowing the parameters of profit and loss will help you make smart decisions and give you strength when you negotiate. Take the time to make sure you have a solid understanding of the system that will sustain your growth so your

business can thrive.

Whether you're an Accidental Jane or a Tenacity Jane, growth can be a pleasant surprise and a great opportunity to make more of your business. It can be the chance you've been waiting for to achieve the dream you've been dreaming - just make sure you accept on your own terms!

Related Articles
  1.2 Mission Objectives: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
  High Growth Women Entrepreneurs Poised to Transform Economies
  8.0 Promotion of women’s entrepreneurship: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
  10.0 Training – business management and technical skills: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
  6.0 The integrated framework for development of women entrepreneurs: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

Article Tags: article details, business owner, businesswomen, consummate professional, distinct types, doorstep, female entrepreneurs, giving birth, growth opportunities, growth spurt, janes, layoff, massive growth, personal contacts, several factors, shingle, unmet needs, women business owners, women entrepreneurs, word of mouth
Referred by: http://www.MichelePW.com



Related Forum Posts
A ton of Great Women - You might want to profile Teresa Cascioli of LakePort Brewery. She has an amazing story! I met her at at the celebratory luncheon for the Profit/Chatelaine Top 100 Women Business Owners. The Top 100 list is also a great resource for inspirational stories of Women Entrepreneurs.
For all Women Entrepreneurs - Hi everyone, as you probably know by now I've just become a Moderator for this group. I'd like to get to know all the Women Entrepreneurs a little better so can you all post here and let me know who a little about yourselves and what business you are in. Take care, Carol
Fundraising for 3rd world Entrepreneurs - How great to learn that Evan is doing something for Entrepreneurs in Africa! It just makes me even more thankful to be part of this forum! After helping create a new charity for animals in my local community last year, I created a vision for a charity empowering Women Entrepreneurs. It won't happen for a while yet, but I know it is something I will do within the next few years. As we allow ourselves to think bigger, the opportunity to impact people becomes much bigger as well. Does anyone else have a desire to really make a difference in the world through this means?
Re: 70 Do Follow Social Sites - Wow !! Such a Huge list you have here. I’ve been searching for it. Thank you.
Women Entrepreneur - I haven't really seen many posts from female entrepreneur's on the site - I know they're out there! C'mon Ladies, speak up - introduce yourselves in this thread, we'd love to have you involved more! Let us know who are top notched Women Entrepreneurs today.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Are You My Mentor

SEO – Link Building Secrets

Sales Training – Top Salespeople Are Not Dunces

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.