by Real Business - Thursday, 30th August 2007

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Is there anything women can’t do? Our survey of the Top 50 Women Entrepreneurs in the country suggests not. They are running every kind of busi-ness imaginable. In every part of the country. Usually while bringing up kids, supporting local charities and contributing to entrepreneurial networks.

The Real Business/Orange 50 Top Women Entrepreneurs rankings was commis-sioned to establish the nature and the quality of women-run businesses. And the results – based on sales, long-term growth and pre-tax profit margins – explode a number of myths, starting with the cliché that women only start up shoe shops and handbag outlets.

There are, in fact, only a handful of retail operations, while the list covers the gamut from nursing homes to high tech, from quarrying to corporate finance. Both Holly Bellingham and Carole Nash have thrived in specialist (but definitely not female) insurance: Bellingham’s Marketform (13) caters to athletes, while Carole Nash Insurance (18) focuses on motorbikes. Mary Holleran’s engineering firm M Holleran (35), Caroline Sheehan’s smog-eating equip-ment provider Horizon International (42), and Dawn Gibbins’s concrete flooring maker Flowcrete (31) make it pretty clear that women can do the heavy lifting required by industrial businesses.

Many of these women have made their fortune by venturing overseas. Julie Davey’s property company Angel Group (17) has interests in Poland, Cyprus and the US. Angela Yeoman’s quarry firm Foster Yeoman (23) is doing business in Finland, and Dolores Collins of Canterbury Travel (15) owes her firm’s fortunes to the weather and mythology of Lapland.

Nor are the companies all new: Thwaite’s Brewery (16) is nearly 200 years old. WA Baxter Foods (11), Lofthouse of Fleetwood (30) and H Tempest photography (21) are all over a hundred. They weren’t founded by women but women feature prominently throughout their histories.

You might ask why it’s worth looking at women as a separate cate-gory. If women are doing every kind of business, deploying every known business model in every corner of the world – what’s so special about them? If these smart women have found some keys to success, could-n’t anyone apply them?

After years of studying women’s businesses both here and in the US, I would argue that there is immense value in taking a special look at women-owned businesses. First, we know that in the US, the rise of women-owned busi-nesses has fuelled the economy as a whole. Women in America now own nearly 50 per cent of all private business. In the light of such data, we in the UK have to ask ourselves: can we do the same thing? There seems no obvious reason why not. And so it makes sense to look at the female success stories we have here to see how we can repli-cate them.

Hard work
It starts, of course, with hard work. Being a woman in business presents unique chal-lenges, which our entrepreneurs have battled to overcome. First, their successes take place in an environment that is not pre-disposed to them. Most of these women (68 per cent in our survey) had no role models, for the simple reason that women in the UK still hold strikingly few top positions compared to men. They’re still paid less than men and women’s presence on corporate boards is negligible. VCs and banks are working to improve their own chauvinist reputations but women still receive far less institutional funding for their companies. So the playing field is not level. Although not one of the Top 50 business leaders complained about discrimination or preju-dice, the fact is that they’ve built their companies, for the most part, alone. They’ve been supported by family, but dealt without a ton of institutional and cultural support, without networks or old girls’ clubs. And however fashionable the study of entrepreneurship has become in our leading business schools, it is striking that none of these women has an MBA, and most are school leavers. That speaks volumes for women entrepreneurs’ initiative and drive.

If you’ve also got a family to raise – and let’s face it, women carry more than half of that responsibility – then “tired” takes on a whole new meaning. Three quarters of those surveyed are parents, and just like the child- less entrepreneurs, they worked 70 hours a week or more to start their businesses. That meant toiling late into the night while the young ones were asleep. “As a working mother with two children, I accept that I need to work twice as hard,” says Laura Tenison, the founder of the maternity and child wear company, JoJo Maman Bebe (49). “I take my kids swimming two evenings a week. Once I’ve put them to bed, I switch on my laptop and do another three hours.” Although parenting duties could be seen as a hindrance, they were an advantage for many of the women. Half said they started their companies to achieve the flexibility that an ordinary job could not offer. So the need to juggle work and parenthood became quite literally the mother of invention.

Zeitgeist
Invention is, fortunately, another area in which women excel. The women in this list have very, very good antennae, and none more so than Jane Cavanagh. Cavanagh, who today heads publicly-listed computer-games publisher SCi (1), was working at BT in the late eighties and travelled extensively to Japan. At that time Nintendo had just launched Nintendo Entertainment System. “It was apparent to me that it was going to be a huge success,” she recalls. “I was very aware that this was the start of a completely new form of electronic entertainment and it had the potential to become a massive industry. What I learned is that if you find an idea or an industry that has huge growth potential you should be part of it and grow with it.” The growth of publicly-listed SCi has indeed been incredible: sales have leapt from £2m to £30.9m in the past four years alone.

Chey Garland also tuned into the zeit-geist. “It was 1997 and I just kept hearing how these companies couldn’t get enough people for their call centres. And I just knew this had legs.” She went on to found the call centre chain CJ Garland (20), now one of the Tees Valley’s biggest employers, and was recently voted Veuve Clicquot Businesswoman of the Year.

The skill is not just in spotting a coming trend, but seeing it at the right moment. Too early and you will spend a fortune waiting for the market to deliver. Too late and the cost of entry is too high. But when you get the timing right, as many of these women have done, you don’t have to provoke the market. You just have to ride it. And since you’ve got on the rollercoaster early, you’re in the driving seat, of course.

Niche is nice
Who would have thought you could build a multi-million pound business just out of sending families to Lapland to visit Father Christmas? Or selling products that are white? Or insuring athletes? The success of Canterbury Travel, The White Company (29), Marketform and many other businesses in the Top 50 pays tribute to the power of the niche. These miniature markets make your market positioning crystal clear so everyone knows who you are, what you do, what you stand for. And they are small enough that you can master every detail and nuance about both customer and product. When Sarah Tremellen started Bravissimo (22), her Leamington Spa-based clothier for “big boobed women”, she knew nothing about her competitors or customers. But she knows everything about them now. She can be so knowledgeable because her business is tightly defined – and very easy to explain.

Talk to Holly Bellingham about profes-sional liability insurance and you will hear that same tone of mastery. Her business proposition at Masterform is so compelling because she and her colleagues are experts in their field and aren’t trying to be all things to all people. “We are very specialist and we’ve stayed that way, even when we’ve been under pressure to diversify into areas we don’t think we understand well enough. We have always stuck to our knitting because that’s how we maintain a really high standard.”

Some marketers now say that the mass market itself is a thing of the past. Consumers, they argue, are too discerning to be satisfied by generic products. Moreover, we live in an age where customers want to mix and match – because that is one way we all proclaim our individuality. In these market conditions, niche businesses speak directly to the consumer with a distinctive voice that promises expertise and quality.

And one great thing about niche markets is that it is possible to enter them without enormous financial resources.

Is thrift in the genes?
That women’s businesses get so little institu-tional backing is well known, and finance was the area in which our respondents felt most disadvantaged (see p44 for the full survey results). However, this may have done them some favours. Because one striking character-istic of these businesses is how profoundly cash-conscious they are. Lorna Moran of Northern Recruitment Group (25) started her business in a recession. “When I started out,” she says, “the economic situation was just desperate. But if you start in tough times in a funny way, that’s quite good. When times improve, you rise with that. We give the highest published returns in our industry now [a 14 per cent pre-tax profit margin]. It is a very tightly managed business.”

Penny Streeter learned the value of thrift the hard way. Her first company had huge amounts of funding – and went bust. So the second time around, she’s done things differ-ently. “This business has never had one penny of borrowing. I didn’t go out and buy new desks and chairs. This place looks like a secondhand shop!” And it’s worked. Her nursing recruitment agency, Ambition 24hours (4), is growing at 72 per cent a year.

The cash controls in place at publicly-traded SCi are achieving results on an even bigger scale. The company gives the highest return on investment of any company in the Forbes “Best Under a Billion” list. And last year, they managed to reduce overheads – while increasing sales and doubling invest-ment in new products. They have a share option scheme – but it is triggered only if the company outperforms the FTSE Media and Entertainment index, an aggressive target if I’ve ever seen one. It demonstrates that women can deliver real value not just in kitchen table businesses but at the very highest level.

Customer love
“The customers are the whole essence,” insists Sarah Tremellen. “If my customers aren’t pleased with what I’m doing, then I don’t see any point in doing it.”

Historians of business have often commented that, as companies developed in the 19th century, service jobs went to women because the men did not want to be seen to serve in public the women they dominated in private. As such, they lost a ring-side seat from which to observe changing habits and patterns in consumption.

Such power struggles are unimaginable in the minds of the Top 50. They don’t just serve their customers – they love them. They want to see them thrive. And they go to great lengths to keep them happy. “I get on the phones and take orders. Everyone here does that. Service is the life blood of this company,” says Tremellen.

Penny Streeter’s business success could be attributed almost entirely to her ability to see problems from her customers’ point of view. “If nursing homes need extra staff, they need it now – not when the weekend is over. Most companies in my field, if you called them, your call would get diverted to some one making dinner and then they’d say “no’. So I knew that giving full service to our customers meant being 100 per cent responsive twenty-four hours a day, seven days a week.”

Partnerships are powerful
It’s become very fashionable lately to call everyone in business a partner. Customers, suppliers, sometimes even competitors are all blandly enfolded by the term “partners”. The reality is that while partnerships can fuel a business, they are also very hard to manage. Successful partnerships require exceptional communication skills, a striking absence of competitiveness and the sensitivity to antici-pate divergent priorities. They often break down over the most trivial misunderstandings.

But when they work, they’re rocket fuel. SCi doesn’t write the code inside computer games; it defines the game, outsources production and markets the final product. Part of the secret of its success is putting a lot of time and effort into the relationship with its production partners, identifying shared goals and uncovering potentially lethal assumptions. SCi has established quite detailed processes for defining needs, expec-tations and milestones that eliminate most of the ambiguity that turns partnerships sour. “We have always ensured that partners have the potential to share in the success of the company,” says Jane Cavanagh.

Karen Sandford has established a similarly dynamic partnership with Siemens. Her company, 4Com (24), which she set up with five colleagues in 1998, resells Siemens phone technology. With every Siemens inno-vation – from voice mail systems to “non-geographic” phone numbers (0870 to you and me) to VOIP, 4Com grows its product line and potential customer base. The more Siemens develops, the more 4Com sells. And the more 4Com sells, the more Siemens can spend developing the next must-have technology.

Are women better at such business deals than men? It’s impossible to tell. What’s clear is that they play to women’s strengths insofar as they demand a lack of ego, an ability to imagine the other company’s point of view and a willingness to see partners as equals.

Culture counts
A lot of business people count culture as one of those “soft” aspects of business which you can ignore, or delegate to HR. They don’t realise just how hard culture is until they need to change it. One of the most striking characteristics of female entrepreneurs is that they think about their company’s culture all the time, sometimes even before they’ve started their business. And they never, ever stop thinking about it.

“Marketform has a personality,” says Holly Bellingham. “It has a very evident work-hard-play- hard ethos but it’s an also an ethos whereby everyone looks after everyone else.

“Last year we established an employee stock option program and now two-thirds of the directors and the staff are direct stake-holders in the business,” Bellingham says. “We get wonderful loyalty from everyone here and we lose very few people.” Marketform deliberately turns its face away from the dog-eat-dog culture the City is so famous for. “When we moved offices, we didn’t move into one of the glass monoliths in Fenchurch Street because they are soulless. We have our own building which has the personality of Marketform written all over it. We are still a family firm. Father Christmas comes and sees the kids, people are looked after when they need help, and we get involved in sponsorship, work placement and community schemes.”

Similarly, Garland’s offices are a very far cry from the blue-collar image of call centres, with its inhouse radio station and cappuccino facility. “The image of our premises have always been very important to me. It’s critical that you send a message about how you value your people. So our call centres are gorgeous with obelisks and gardens on the calling floor. We have funky Italian lights that look like flying angels. It is the right investment because it makes people happy while they’re working, so they do better work.”

By keeping good people, businesses like Bellingham’s and Garland’s save a fortune in staff training and turnover. In some indus-tries, that so-called soft culture stuff makes the crucial difference between making money and losing it.

The confidence game
Every female entrepreneur I’ve ever met – and I’ve met hundreds – has said that she lacks confidence. To be fair, some men have said the same, but not as many, not as readily. Women lack confidence because they’ve come late into a business world that was not made by them, or for them, or in their own image. Many have struggled to progress inside traditional corporations that have either failed to recognise their talents or refused to provide the flexibility and imagi-nation that their demand for full lives requires. A quarter said that lack of confi-dence was the biggest hurdle in setting up shop. Women have come to feel like gate-crashers, allowed in only as long as they keep quiet and don’t cause a fuss.

You can see a positive aspect to this. Women may be less keen to boast, to lord it over their employees. Their leadership style tends to be less hierarchical and more consen-sual. It’s a rare day that you see a female business owner swagger with the bragadoccio of an Alan Sugar or a Conrad Black.

In part, this can be explained by the socialisation of women, which celebrates modesty as a distinctly feminine virtue. It may also be explained by a desire not to be a lightening rod. Women business leaders who have the temerity to put their heads above the parapet have a sad history of being subjected to a scrutiny that rivals royals. Their every move, hairdo, relationship, outfit and comment is dismembered in the search for flaws. Where male CEOs can report company results, their female counterparts have also to comment on their personal style and family structure. When Carly Fiorina was ousted from Hewlett-Packard earlier this year, one of the many obituaries trivialised her as the girl CEO who’d never had a bad hair day.

With this kind of prurient scrutiny, female entrepreneurs are understandably wary of becoming too public. Of the top 25, seven categorically refused to say anything about themselves or their companies. If the only choice a female business leader feels she has is between being crucified or being invis-ible, you can understand why invisibility might appear the safer option.

But it’s a shame. It’s a shame because many of these are great companies, run by very gifted women. Personality and presence are key tools for managing directors to artic-ulate and promote their companies’ value – but tools which many women feel are, for them, simply too hot to handle. That means they’re deprived of something that could build their companies even further. These businesses deserve to be known and the women who have nurtured them deserve to be recognised, without fear of the contempt and derision that so often characterises our business press. The Top 50 represent business creativity at its finest: smart women building great companies that are suffused with respect for customer and employee alike. This is how we want business to be done. It is the way it should be done. And it is the way that will inspire generations of girls and boys to believe that business is a lofty and worthwhile calling.

Frankly, my dear...
You could say – and many have said this to me – that the rise of female entrepreneurship is all very interesting, but who cares? What does it have to tell us about existing busi-nesses, established corporations, the way that business has always been done? Why does it matter to British corporations and why, frankly, should it matter to blokes?

The history of the Top 50 companies shows us some very interesting things. Chief among these is the fact that most of these business leaders have children. Why is this so startling? Because every time the government introduces some new family-friendly initia-tive, we hear the knee-jerk response that this will bring small businesses to the ground. That maternity and motherhood are funda-mentally incompatible with small business, the live blood of the economy. But look at these women: they run their companies, they raise their children (many without husbands) – and both thrive. How does that happen? Well my own experience as a mother and entrepreneur is that when you expect success, you’re more likely to achieve it. I’ve regularly had employees out on maternity leave; they all come back – and not one has ever let me down. Part of this is good hiring, part is good management – but it all depends, crucially, on abandoning the mental model that expects hard work to exclude all other commitments. On the contrary, there’s a growing body of evidence demonstrating that employees with “dual-centric” lives are more effective and efficient than those who work and only work. Flexibility is in the mind: if you look on maternity (and pater-nity) leave as an opportunity for the personal development of your staff, you and your business are far more likely to get something out of the experience.

One of the things that most strikes me as I interview female entrepreneurs around the world is that they enjoy strikingly high reten-tion rates among their staff. Sometimes this is because they start the company with a spouse (like Luisa Scacchetti), a brother (like Anne Jones) or they grow into family firms (like Baxters or Daniel Thwaites.) But family relations don’t fully explain it. What often singles out these business leaders is their intu-itive recognition that personal, professional growth is a far, far greater motivator than money. Identifying staff talents and growing them – even or especially in a small business – inspires degrees of loyalty and commitment that large companies struggle to attain. It’s hardly surprising that women, as entrepre-neurs, are better at hiring and retaining men than men are at hiring and retaining women. They know that diversity works because it is the story of their lives. And they know that diversity pays huge dividends because it is the story of their businesses.

What is also so striking about many of the Top 50 companies is that they represent huge lost opportunities for our more established corporations. What has Goldsmiths been doing while Warren James has taken over high street jewellery? Why have the big employment agencies so singularly missed the opportunity that Penny Streeter saw and grabbed? Why can’t Mothercare or Marks and Spencer do what Mamas and Papas or JoJo Maman Bebe do? Why are women’s experiences in traditional department and lingerie stores so dreadful that Bravissimo can build an entire business just by being kind to their customers?

How to keep the entrepreneurial spirit once companies have become cumbersome behemoths is a challenge that every estab-lished corporation must face. After all, they were all small, young and dynamic them-in selves once. What happened to them? So many of them lose the entrepreneurial mindset along the way that the average life expectancy for a business is shorter than a person’s. Why is it so hard for companies to reinvigorate themselves?

There are many answers to that question. But one of them lies with women. Women represent some 85 per cent of consumer spending power – a big enough percentage to say that women, basically, are the consumer market. And yet look at the directors of, say, Marks & Spencer: no female executive direc-tors, no female non-executive directors and, among operational executives, a mere 20 per cent are women. What’s the best way to know your market? To be your market. But try telling that to Next, the Daily Mail or Johnson Mathey, with no women on their boards. Only 13.6 per cent of companies have any female non-executive directors, and many of the remaining ones are light-years away from tapping female potential. And lest you fondly imagine that time will solve the problem, reflect that from 2003-2004, the number of female directors on a FTSE 100 company grew by the grand total of one.

This is not about doing women favours. It is about making businesses smarter. But whenever the subject of recruiting and retaining women arises, almost every male British executive I’ve ever met thinks I’m talking about social justice. They see diver-sity, at best, as a nice thing to do and good PR. At worst, it’s a way to stay away from the courts and hefty penalties. The more enlight-ened have started to notice that staff turnover is expensive, so if you hire women, it’s cost-effective to try to keep them. That’s to the degree that they think about diversity at all. Most assume that since their business has always been run by men, that is the natural order of things.

But the real argument for diversity is that groups of people make smarter decisions than single individuals. This is why we do so much work in teams; a group comprised of multiple backgrounds, outlooks and experi-ence will always see more solutions than a single individual ever can. But that only works if you both hire a diverse bunch of people and allow them to remain different. Turning them all into corporate clones won’t bring any advantage at all. The more like-minded the team, the fewer options they’ll identify; the broader the range of mindsets and history, the more opportunities and contingencies they’ll see. What does adding women to the mix do? It broadens the range of talents and attitudes that every company needs to identify winning strategies. It’s the single smartest way to increase your company’s IQ.

Every time I see a successful female entre-preneur, I cheer. I’m thrilled by her success in doing business her way. But I’m also appaled, wondering: which company was it that lost this one? Many of the Top 50 could have done for their corporations what, in the end, they’ve done for themselves. Their employers could have had all that energy, insight, intel-ligence, drive and capability – if they’d known how to spot it, nurture it and reward it. Karen Sandford, who built 4Com into a £8.9m business, walked out the door to do for herself pretty much what her former employer did. Holly Bellingham opened up an insurance market when she realised that her generalist firm would never give her the autonomy and freedom to do so. Both could have grown vast businesses inside their firms if, instead of seeing a future of pregnancies and school plays, their managers had seen ambition and talent.

A recent survey of 2000 business leaders asked how many felt they had the talent they needed to pursue all the strategies their busi-nesses required. Only seven per cent could say that they did. All the other 93 per cent were stuck because they didn’t have the talent. Maybe, just maybe, they weren’t looking in the right place for the right kinds of faces.

Profiles of all 50 women in the Real Business/Orange Top 50 Women Entrepreneurs, plus other women-related articles, can be found on our website: www.realbusiness.co.uk/women

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