Women Entrepreneurs Growing in Numbers

Small business has seen big growth in the past 10 years, and small businesses owned by women have flourished, with a growth rate of 37 percent—four times the growth rate of all firms. The Small Business Association (SBA) estimates that minority women own 1.2 million businesses, which makes them the fastest growing segment of women-owned businesses.

Making the decision to start and grow a business is not an easy one. Fledgling business owners learn quickly that getting the right financing, developmental help and support can make the difference between a successful venture and failure. In the Federal Reserve's Eighth District, three women who made the leap and became business owners share their stories of becoming women entrepreneurs.

Fulfilling a Sweet Destiny

Susan Jones— Little Shop of Pastries

Susan Jones had sentimental reasons for starting her business. “When I was 17, my grandmother retired from her wedding cake business and gave me her cake pans,” she said. “I knew at that moment I wanted to do something special with those pans.” The concept of Jones' business, Little Shop of Pastries in Vienna, Ill., grew from that desire.

Susan Jones, owner of Little Shop of Pastries in Vienna, Ill., still uses her grandmother's cake pans to bake wedding cakes.

Jones started her business in a small shop near the Vienna town square.

“I knew I could do something with the shop,” she said. “I could see myself running a small bakery and selling wedding cakes.” Jones wrote her business plan with help from family and friends and with information she received from the Small Business Development Center (SBDC) at Murray State University in Kentucky. When she approached a local bank to secure a loan, she received a pleasant surprise. The loan officer was impressed with her business plan and asked her who wrote it. “I didn't know if I should feel proud or be insulted,” she said. “I really didn't care. I got the loan and Little Shop of Pastries was born.”

Her business was a success from the start, and she soon started selling sandwiches and beverages along with her pastries. She added tables to accommodate customers who wanted a place to sit. “It was so tight in there you could hardly move,” Jones said. “I was surprised that people waited in line for a table.”

The Vienna Chamber of Commerce contacted Jones about expanding her business to a bigger location and suggested she visit the SBDC at Shawnee Community College. At the SBDC, Jones took advantage of entrepreneurship classes. “Everyone at the center was so helpful and the entrepreneur classes have been very useful. The information I got from them has helped me more than once,” Jones said. The center also helped Jones obtain a microenterprise grant from the Southernmost Illinois Delta Empowerment Zone. She used it to expand to her current location.

“It's hard to say what I would change, if I could. I've had hard knocks, but they only make you better at what you're doing,” Jones said. Little Shop of Pastries has grown into a bakery, restaurant and now a catering business. Her success comes from selling quality products for fair prices and giving customers what they want, she said. It's not unusual for her to make wedding cakes from her customers' favorite recipes. Jones said she also owes her success to her loyal staff and supportive family. Running the shop is a family affair. Jones' mother-in-law, Betty Jones, has worked beside her since the shop opened. Her husband and children help out by washing dishes, decorating cookies and working at events.

“When we serve meals and I hear people talking about how good the food tastes or a customer comes in to buy rolls because Sunday dinner isn't complete without my rolls or a bride is glowing because her wedding cake is perfect, I feel fantastic,” Jones said.

Building Minds for the Future, Character for a Lifetime

Michelle Hayden—One Step Ahead Daycare Center

Michelle Hayden worked with Grace Hill Women's Business Center and Area Resources for Community and Human Services (ARCHS) to start her business, One Step Ahead Daycare Center. Grace Hill helped Hayden develop a business plan and provided entrepreneurship training. ARCHS gave her a grant to help renovate the exterior of the space she leases from The Youth and Family Center. The money allowed her to add a fire exit and playground.

It was hard work getting everything on the same page, Hayden said. “I would try to comply with a state regulation, and the city would have a separate regulation that was different,” she said. “Grace Hill really helped me think about all aspects of my business plan.”

Using a home equity loan as capital, Hayden started her day-care business in Old North St. Louis. Being a working mother helped her find her niche of providing a safe environment for the children of working parents, she said. Hayden's own children come to the center, and her oldest daughter works as a junior counselor. Hayden said she is nurturing future community leaders. The day care's motto is “Building Minds for the Future, Character for a Lifetime.”

“We bring our morals and principles to work with us every day,” she said.

Working with children and families is something that comes naturally to Hayden and her staff. They often help the families they serve in other ways. Job, housing, food and human service referral information is kept close at hand. “I've had parents who lose their job and need to find another one fast. Sometimes a child support check is late and food is running out at home or they need help with aging family members as well as babies,” Hayden said. She also has a close relationship with The Youth and Family Center, where her day care is located. The services offered at the center and at the day care complement each other and the organizations often refer families to each other.

After being in business one year, Hayden is right on target with her business plan. She gives credit to her husband, children and sister, Gwen Brown. Brown works daily alongside Hayden, teaching 2-year-olds. “Gwen is the person I can always go to when I need an honest answer,” Hayden said. “She always gives me good advice. She cares about me, my family and the kids.”

Mechanic Makes House Calls

Shelley Wilson—Wilson's Mobile Oil Change

At the age of 13, Shelley Wilson helped her dad when he worked on cars. It was a family tradition.

“It started with my grandfather, who passed his love of cars to my dad, who passed it on to me and my brother. I just liked cars and wanted to know what makes them run,” Wilson said. After graduating from high school, Wilson worked at a number of jobs and worked on cars part time. At the age of 30, she became a certified auto mechanic.

Shelley Wilson, left, and her partner Laura Rose, run Wilson's Mobile Oil Change.

As a female mechanic, Wilson worked mostly with men and often had to deal with teasing. “It's a double whammy being a woman and a mechanic,” Wilson related good-naturedly. Wilson was working for a bus company when she decided to investigate starting her own business. She knew she wanted freedom and flexibility in her life. The years of listening to customers talk about their busy lives gave her the idea for her business: a mobile oil change service that comes to a customer's home or workplace.

Wilson began to research ways to make her idea a reality. The Southern Illinois University-Edwardsville SBDC office in East St. Louis was the perfect place to go for help and information. There she was able to write an effective business plan, learn how to budget and plan for her business.

One of the things she learned was patience. “I wanted everything to happen at once,” Wilson said. “Working with the SBDC taught me how to take steps, allowing me to slowly grow my business, making it financially stronger.”

Wilson used her own money to start Wilson's Mobile Oil Change in Collinsville, Ill., and the business has been debt-free since its birth four years ago. Wilson and her business partner, Laura Rose, scour pawn shops and garage sales for deals on used tools in good condition. They also promote their business by distributing fliers to organizations and businesses in their community.

Wilson acknowledged that being debt-free has allowed her time to establish her business and not worry about repaying a loan. She is working on a plan to offer a service package to businesses that have a fleet of vehicles and is investigating ways to offer her services to low-income individuals and the elderly. “There are a lot of people out there who need a car to get back and forth from work but can't afford to pay the high price at a lube shop or a mechanic. I want to help those people,” Wilson said.

SBDCs Offer Technical Help

SBDCs in the St. Louis Fed's district report that they are working with a growing number of women who want to start businesses.

For example, Grace Hill Women's Business Center, an SBDC in St. Louis, provided training classes and one-on-one counseling to 440 women last year. Lynette Watson, the center's director, said many of those women want to become business owners to have more control of their lives.

An SBDC at Southeast Missouri State University also has seen growth in women-owned businesses. The center's director, Buzz Sutherland, said he's noticed more women than men start businesses as a lifestyle choice. “Many women look for a business venture, like child care, that is fairly inexpensive to start and will provide them a living income,” he said.

The Community Affairs staff at the Federal Reserve Bank of St. Louis is focusing its efforts on small business and entrepreneurship during 2004 and 2005. This is the third of several articles scheduled in Bridges on those topics.

Jim Mager, director of the Southern Illinois University-Edwardsville SBDC, and Theresa Ebeler, development specialist at its East St. Louis Center, also see more women taking charge of their future by starting their own businesses. However, they said women are choosing ventures that are not the traditional businesses women gravitated to in the past.

There is one important point that all agree on: Those trying to start new businesses need to be prepared when they go to the bank for a loan.

Mager said entrepreneurs sometimes don't understand that starting a business has an amount of risk involved. “Banks are apprehensive about taking risks, and there is nothing riskier than a small business,” he said.

When seeking a loan, entrepreneurs must be prepared to sell themselves, Ebeler said.

“A good business plan is not always enough.”