Women CEOs Optimistic About Business Performance as Tools for Achieving Growth Evolve
New York, 29 May 2017
Recruitment and retention of talented employees named biggest challenge to growth ambitions
Today’s entrepreneurial women built success on their own terms. In the latest Business Outlook Survey from EY and the Women Presidents’ Organization (WPO), more than half (57 percent) of EY Entrepreneurial Winning Women™ and Women Presidents’ Organization members surveyed said the biggest influence on where they are today was their own drive to succeed. The majority attributed their success to deep industry knowledge and experience (63%) and effective employee teams (61%). And they are enthusiastic about their growth prospects, with 62% reporting great optimism about their company’s financial performance compared to last year.
Sponsored by EY, the annual Business Outlook Survey was conducted between November 2016 and January 2017. The survey includes responses from 430 founding women CEOs on topics ranging from business challenges and opportunities, to forecasts for growth and hiring, to the current business and political climate. More than three-quarters of the entrepreneurs surveyed run companies generating between $1M-$20M in annual revenues, with 14% generating over $20M.
“The findings of this year’s Business Outlook Survey from EY and the Women Presidents’ Organization underscore that women entrepreneurs are at a historical tipping point. Owing to a tenacious drive to succeed, passion and perseverance, they built success on their own terms. They created economic security for themselves, their employees and their families,” said Dr. Marsha Firestone, WPO President & Founder.
“Over the years,” she continued, “we have seen dramatic growth of WPO member businesses, which today collectively generate over $22 billion. The future is now for women-owned and led businesses. They are enthusiastic about opportunities as never seen before, making more money, winning more contracts and securing greater freedom and control. The possibilities are limitless.”
Fifty-one percent of respondents’ companies are more than 20 years old, while only 5 percent were established within the past five years. “A pioneering spirit runs deeply among women entrepreneurs,” said Lisa Schiffman, Ernst & Young LLP Director, who spearheads the EY Entrepreneurial Winning Women™ program. “Support for women’s entrepreneurship was tenuous 20 years ago, and venture financing is still a challenge. Women founders at that time would have had to show incredible spirit, endurance and self-reliance to start and scale their companies. No one, in the way of role models or investors, was there to pave the way. That spirit informs how they think about their companies and their own success today.”
Talent remains a challenge – but businesses are hiring
One-quarter of respondents ranked finding and retaining quality employees as the greatest threat to their bottom line in 2016, and recruitment and retention of talent was also named the biggest obstacle to scaling their businesses. This mirrors results seen in EY’s recent survey, “The Entrepreneur’s Purpose: How EY Entrepreneur Of The Year® Award Winners Outperform and Outlast the Competition,” conducted with the Harvard Business Review.
In addition to talent, women entrepreneurs see rising red tape as a core challenge -- 25.3 percent said a higher cost of conducting business is the biggest threat to U.S. entrepreneurship in the new political environment, followed by the perception of women, which 15.3 percent said is the biggest threat.
In spite of concerns about recruitment and retention, respondents reported they planned to increase the number of employees in the second half of 2017, with 33.2 percent projecting up to 5 percent staff growth and 11.1 percent projecting 6-10 percent growth. They’re also paying themselves more. Fifty-three percent projected an increase their own annual salary from the previous calendar year.
Self-financing for growth
The Business Outlook Survey found that 68 percent of women used their personal savings to help grow their businesses when they first started, while 27 percent used a bank line of credit and 22 percent incurred personal debt.
Nearly one-third of respondents are interested in raising capital for future expansion. Among those interested in raising capital, a bank line of credit was of highest interest, with 50 percent of respondents considering it. This was followed by private equity (31 percent), angel investors (24 percent) and venture capital (23 percent).
Looking towards the next generation of women entrepreneurs
Respondents ranked these (in order) as the most important factors in helping future women entrepreneurs grow their businesses:
- Access to capital
- Access to advisors
- More active networks of women entrepreneurs
- More mentorship programs
- Giving more attention to successful women entrepreneurs in the media
- Encouraging women to enter STEM industries
The value of a like-minded community
Peer networking and learning is proving a valuable source of advice and catalyst for continued growth.
“Women entrepreneurs find exceptional value in a robust community,” said Kerrie MacPherson, Principal, Financial Services Office, Ernst & Young LLP and North America Entrepreneurial Winning Women executive sponsor at EY. “Communities offer women entrepreneurs much-welcomed affirmation, know-how, peer-to-peer guidance and, ultimately, role models. The journey of a high-growth woman CEO can be lonely; when surrounded by peers that share their challenges and understand their opportunities, they are strengthened and emboldened to achieve more.”
The power of community is evident in the Business Outlook Survey. Since joining WPO, 63.7 percent of entrepreneurs said their businesses have grown – and 46.5 percent attribute part of their growth to WPO membership. Likewise, 85 percent of Entrepreneurial Winning Women surveyed said the program made them feel more supported and connected, and 88 percent reported an increase in their self-confidence as a leader.
The WPO Business Outlook Survey, sponsored by EY Entrepreneurial Winning Women, polled 430 women CEOs and owners of multi-million dollar companies between November 2016 and January 2017. Members responded in an anonymous electronic format. Additional survey data is available upon request.
About the Women Presidents’ Organization
The WPO is the ultimate affiliation for successful women entrepreneurs worldwide. In monthly meetings across the world, women from diverse industries invest time and energy in themselves and their businesses to drive their corporations to the next level. WPO members’ average revenue is $13.2 million, generating aggregate revenue of $19.6 billion. Local WPO chapters are coordinated by a professional facilitator and meet monthly to share business expertise and experience in a confidential setting. For more information, call 212-688-4114 or visit www.womenpresidentsorg.com. Follow WPO on Twitter (@womenpresidents) and like us on Facebook.
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 is critical for entrepreneurs to accelerate growth. With the EY Entrepreneurial Winning Women™ program, we channel our resources and convening power to help women entrepreneurs realize their vision. The program identifies and celebrates high-potential 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 other programs that are focused on helping women start businesses, EY’s Entrepreneurial Winning Women program supports women with existing enterprises in scaling their companies and becoming market leaders.
The program is currently accepting applications, through June 9, for its next class of women entrepreneurs in North America. Entrepreneurs can learn how to apply or nominate an entrepreneur on the EY website.