Alexei Smirnov [1]

According to the Center for Women’s Business Research, the number of businesses majority owned by women in Tennessee increased 27.9% between 1997 and 2004. With the ninth highest percentage increase in the nation, Tennessee ranked well above the national average of 17%. So just how are things for women in business in Tennessee? This month, Business Tennessee sits down with four accomplished female executives and business owners to discuss issues pertinent to the experience of women in business and to find out if the obstacles of the past are now the opportunities of today. Our guests are: • Kimberley Carter, Divisional Vice President, AXA Advisors LLC, Memphis • Rosemarie Fair, founder and CEO, One Source Commercial; partner, Alliance Capital Mortgage, Memphis. • Lisa Held Janke, founder and CEO, Short Bark Industries, Tellico Plains • Pamela Wright, founder and CEO, Wright Travel, Nashville

DR: Data suggests the creation of women-owned businesses in Tennessee outpaces the national average. Is Tennessee an especially good place for women in business? If so, why?

Wright: In Nashville, the Chamber has been really supportive of women in business. There are some really good small business programs. But I also think that Tennessee maybe lagged behind. So the increases may be relative to where we started.

Held Janke: For me, Congressman Duncan’s office has been very open in helping me with the government portion of my business. And the University of Tennessee has a partnership called PTAC [Procurement Technical Assistance Center] that has helped us develop more business. The glass ceilings aren’t quite there like they used to be.

Carter: There are not as many women in leadership positions in corporate America. That’s across the U.S., let alone just in Tennessee. Little girls and even young women can look and say, “I can become the president of this huge corporation, or I can attain a high level in the company I’m working with.” But many of them say, “I’ve got all these great skills and talents, why don’t I apply them for my own benefit as opposed to trying to rise within the corporate ranks?” That has spurred quite a lot of women-owned business formations.

DR: Wilson County has tremendous female political representation. Mt. Juliet, for instance, boasts a female state senator, a female state representative, a female mayor and a female chairman of the Chamber. According to the Tennessee Economic Council on Women, Wilson County is the only county in the state that appears in the top ten of four employment and earnings indicators with regards to women. Coincidence?

Carter: Political representation creates momentum. Whenever you see women in positions of authority and positions of power, it inspires other women. I work with women business owners to help them with their financial planning. Many of them look towards media figures and politicians. The difference is of course that a politician can actually aid that business in taking root and pursuing government aid and contracts, which in many cases can be essential to a startup.

DR: Rosemarie, you are the president of the Mid-South Girl Scout Council. What can you say about mentoring?

Fair: A book written several years ago entitled Nine and Counting was dedicated to Girl Scouts USA. It was about the women in the U.S. Senate. It does set the bar for those individuals to mentor the young—and the more of that that goes on, the better off the whole nation is, in looking at pluralism and diversity.

Wright: Fairly frequently, I get calls from women asking if they can have a few minutes of my time because they’re thinking of starting their own business. You know, we’re all so busy, and it’s so hard to take time to do that, but it’s just really important. That is another part of it, at a really small level, where we as successful women can have influence. But even when we’re in positions of success, even when we feel like we’ve developed in our career, it’s still really important that we see other women out there as role models.

DR: Under Gov. Phil Bredesen, appointments of women to state boards and commissions have increased. For instance, for the first time in Tennessee’s history there is a women serving on the Land Surveyors Examiner’s Board, and for the first time in Tennessee history, there’s a woman serving on the Home Improvement Commission Licensing Board. Rosemarie, you’re president of the Tennessee Association of Realtors. How important are those types of appointments?

Fair: Absolutely important. And the Tennessee Association of Realtors aligns with the Tennessee Real Estate Commission, and there are a number of strong women that have been appointed by Gov. Bredesen to serve on that commission. We need more of that.

DR: Yasmeen Mohiuddin, a professor of economics at the University of the South and a national expert on pay equity, recently released a study showing that workingwomen earned 76.5% of men’s wages in 2004. Is the wage gap merely the result of women historically seeking out professions that pay less? How much true bias still exists in the workplace.

Carter: It exists.

Fair: Ditto. That we are at 76%—thank goodness it has risen. But clearly the old adage that women do twice as much work and get paid half the amount is still true.

Wright: Employers look at historical salaries when they’re making job offers. That’s part of what perpetuates lower wages for women. Typically, employers hire based on past compensation—not always just based on a graded position, particularly in private companies.

DR: Is it correct to assume that the wage disparity gap will close as younger generations of women pursue higher education at a higher rate and increasingly choose non-traditional, higher paying career paths?

Carter: Exactly. The percentages of women in higher education are outpacing men in almost every category. At some point, it has to be realized on the bottom line that women need to make the same amount of money. That gap has got to be closed.

DR: According to the National Women’s Business Council, women receive only a few percent of the venture capital in this country. The Council theorized many women-owned businesses are just not large enough to return large profits quickly. Why do women struggle to access the capital markets in America? Is the situation improving?

Carter: It is derivative in part of the sectors that we enter. It’s usually technology and health care and things like that that get venture capitalist funds quicker. More often than not, the women-owned businesses are not in those areas. From experience, I can tell you it’s changing. While initially it seemed that women were pursuing solo practices or small office/home office businesses because it was something that they could self-fund, women now are more often preparing business plans and getting financing from financial institutions, which puts their businesses in a whole different category as to what they can pursue.

Fair: The rise of female entrepreneurs has evolved largely from the dining room table. But the perseverance and the detail-oriented characteristic of women are well-suited to putting together business plans that make sense, allowing lending institutions to back females. It does work. Females just need an audience.

DR: Kimberley, you formerly worked with one of the largest minority-owned investment-banking firms in the nation. Is there a need for more venture capital and angel financing programs organized by and for women?

Carter: Oh, definitely. And again, in my opinion, women were self-funding their businesses because they didn’t even realize that it was possible to do it another way. Once you break through the internal barrier of what you think is possible, and then you go out and pursue it, you realize it can be done. More so now, women realize that external funding through a financial institution like a bank or credit union, or that sort of institution, is the process, and that’s their first thought. You do your research, get a business plan, make a presentation, etc. In reality, the whole concept of venture capital, across all business, is a concept that is not as widely known as a source of funding as businesspeople might think. And for women, it is even less so.

Held Janke: I started my business in the garage, totally self-funding. That was just how I did business. I didn’t realize that you could take a business plan out to the local bank and they’d lend me money.

DR: Lisa, you now helm one of the fastest growing manufacturing operations in the state. What about capital for future growth now? Held Janke: Just in the last month we have been prepping packages and presenting them to different financial institutions.

DR: Pam, you own the largest woman-owned business in the state. You’ve survived an industry that was taken to its knees and acquired a lot of businesses in recent years. Can you talk about your growth and access to capital?

Wright: When I was opening the business, establishing a business plan and trying to get capital, the answer was just “no.” It was a service business, a low-profit business, because most agencies, most travel agencies are very, very small and don’t generate much profit. The answer to the capital request was just “no.” So I got funded from personal means, a second mortgage on our house, family money. It really kind of bootstrapped the growth from there. But every office opening made it more profitable, and that created more profit for future growth. It is kind of interesting now because when you achieve success, then of course the banking situation becomes very different—it’s so competitive and banks work so hard to get your business. I have a lot of sympathy for those startup businesses that try to get that capital and can’t—because you have to have that really tenacious personality. We haven’t really talked about women and risk-taking, but I think that’s one of the big issues. Women aren’t always innately ready to take those risks. They have to develop that.

Carter: Many times women want to have all the answers before proceeding ahead, and in business, many times you have to just figure it out as you go along. This deters many women as well.

Held Janke: One of the philosophies I follow is that if you conceive and believe, you shall achieve, and that’s all about risk-taking and not stopping. I’m a dinosaur in the industry I’m in—I own a cut-and-sew facility—and we’re employing 350 folks at the moment, so you have to have enough passion and ability and take risks.

Carter: Right. I got my motto from my mother, which was “Always pray, and then get up off your knees and hustle.”

DR: Lisa, you have two children, one who is a kindergartner. How do you manage the responsibilities of work and home?

Held Janke: We’ve gone from a hundred employees to 350 in the last 18 to 24 months, and it’s just been surreal, it happened so fast. My husband has been wonderful in helping, and I’m very fortunate that I have my family here. I was born in Monroe County. I went to school in Monroe County, and I still live in Monroe County, so I’m one of those very fortunate people who has a lot of family support locally. It is very important that you get that support at the home base to let you know that it is okay to go out and work those 70 to 80 hours a week and be gone for a week if necessary.

Wright: It would be very difficult for women to be successful in business if they did not have a supportive atmosphere at home, be it husband or children or parents—because that’s part of what keeps you going. I know I’m a processor, and I know that many times my husband does not want to listen to my processing at night, but he tends to do that because he knows that is my personality and what I need in terms of being able to get up and keep going the next morning.

DR: Do you find that he’s a good person to bounce the ideas off of, or in other cases, do the husbands not want to be involved, or how does that work?

Wright: He has learned not to give suggestions. He’s probably learned to be a listener. I’m not sure we want suggestions. Again, talking personally, you know the cliché: “It’s lonely at the top?” Well, it is, because you can’t always discuss with other staff the issues you’re dealing with. So processing at home is important. Not necessarily to get suggestions but to hear yourself out loud, to come to your own conclusions that make sense. Perhaps women do that more then men. They just tend to be more inclined to need to process.

DR: One good way to start or grow a business is through government contracting. The federal government has a stated goal of purchasing 5% of goods and services from women-owned firms but seldom reaches that goal. Yet according to the Center for Women’s Business Research, the percentage of businesses majority owned by women in 2002 was 28%. Isn’t the 5% goal out of balance with reality?

Held Janke: Well, getting into the government business is not an easy thing—it’s a lot of paperwork up front—but once you pass that barrier, you’re on your way. I was in Washington speaking with a lady out of the Pentagon with a small business advisory group with defense and logistics. She asked me my advice regarding what the government could do to fix the system. I said, “You’ve got to cut out some of the paperwork. It’s a lot of paperwork.” But as I said, once you get past that, the market is wide open.

Fair: The pursuit of women-owned businesses to meet the requirements and demands of requests for proposals also holds true for many other organizations, not just the government. But I’ve been on the receiving end of these RFPs—the replies from women-owned businesses are usually minimal. And when the proposals come in, they come in from companies that may not have the sum and substance to deliver the services.

Carter: The mandate is only earmarked for 5% of women-owned businesses for contracted services, but even that is not being fulfilled. So why raise it? Also, it’s a matter of women business owners expanding into other areas and diversifying, to attract that government work.

Held Janke: I had all my eggs in one basket, military apparel, for ten years. And I just went through that very thought of diversifying our company. It was a risk, and I went from making clothing to making automotive seat covers—which is night and day. I went from having six weeks of notice regarding what I was going to be making to having 48 hours. It took nerve, but I knew that I needed to be able to diversify the company and not depend on one thing for our success.

DR: What is your advice for female executives and entrepreneurs? Held Janke: Do what you say and say what you do. You will build a lot of confidence with the folks that you do business with if you will just do that.

Wright: That’s extremely important with your employees, too. They need to know that if you make a commitment, you’re going to live up to that commitment. There’s a trust and consistency, that if you have a policy, it applies to everybody, not just certain people, and that you’re very consistent and trustworthy in your communications with employees. I feel very strongly that I keep staff motivated because they see what a hard, hands-on worker I am. If there’s a spill on the floor, I’ll be the first one to get a paper towel and wipe it up. It’s really important for staff to see that energy level and work involvement.

DR: Interesting conversation. Thanks.