Pop quiz: How many of the 10.4 million American businesses owned by women generate more than $1 million a year in sales?
The answer isn't as big as you might expect: Only 3 percent of female-owned businesses—or about 300,000 companies total—have made the jump from start-ups into successful, midsize companies, according to a survey by American Express.
Why is this? The poll, billed as the first ever to focus exclusively on more than 1,100 women who are committed to growing their firms to the million-dollar level, offers insight into what makes entrepreneurs tick—and identifies some of the biggest challenges facing women who start their own businesses.
Motivation: Female entrepreneurs certainly don't lack confidence. Fully 89 percent of the business owners polled agreed with the statement, "I have complete faith that I will succeed." Those women who had expanded their companies into million-dollar operations said this self-confidence was the most important factor driving their success, trumping money, marketing, and mentoring.
Benchmarks: The women in the poll who had already reached $1 million in revenues identified three key turning points in building their businesses: surviving for five years, hiring more than five employees, or reaching $250,000 in sales. When they had achieved these benchmarks, they said they were finally sure they would be successful.
Balance: Interestingly, a significant percentage of the women polled said they had started their own businesses not just to be their own bosses or to build something but because they desired a better work-life balance. Nearly 1 in 3 women said this was the primary reason for starting her own business. This rationale didn't affect their growth goals, though: More than half of the women who became entrepreneurs because of work-life concerns are spending over 40 hours per week on their business.
Worries: Like the majority of entrepreneurs, most of the women in the poll don't fear failure, but they did admit being worried about incurring debt, and more than 1 in 4—27 percent—said they were concerned about losing touch with family and friends.