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Greetings and welcome to The Winner’s Summit Conference & Expo™. I am so excited you joined us for our inaugural life changing event. This is something you have to experience. It will not be your typical conference. Much thought and preparation, research and courage has gone into creating the best environment for you to learn, to be inspired, to relax, and to increase your bottom line. It is our season and time to shine. Warmest Regards, Deborah Hardnett CEO& Founder The Winner’s Summit Conference and Expo™

Special Acknowledgements It is truly a blessing when one can look around and draw strength from others. I am humbled and grateful to many for helping to make The Winner’s Summit a success. A very special thank you must be extend to My Angel Zoë Elizabeth Hardnett Mr. C. Lamar Powell Linda Clemons Jodi Premack & the Hyatt Regency Baltimore, Zedric Peterson of 1 Extreme Productions, Frank Phillips, Carolene Dobbins, Angelina Thompson, Ruth Jones, Latoya Friend Terry Spicer, Trudy Hedgeman, Shaniqua Duhon, Cydney Sheilds Ferrell, Syvella Brantley Dr. Karen Proudford & Morgan State University, Anthony Dew, Pamela Kelly 2


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Visit Our Proud Sponsors on the Web

Deborah Hardnett International - www.deborahhardnett.com Wealthy Sistas® Media Group – www.wealthysistas.com The Professional Black Woman™ - www.thepbw.com Carnival Cruise Lines – www.carnival.com Hyatt Regency Baltimore – www.baltimore.hyatt.com Carmel Coast Publishing Enterprises – www.carmelcoastpublishing.com The Afro – www.afro.com Live Sister Live – www.livesisterlive.blogspot.com Professional Green Network – www.professionalgreennetwork.com Own – Onyx Woman Network – www.ownoynxwomannetwork.tv Marleen Alexander & Associates, LLC – www.iwillassistyou.net So Where Ya Going Travel – www.sowhereyagoing.com Another Approach Enterprises – www.anotherapproach.com CreativOne Designs – www.creativonedesigns.com Betty Hines Business Builder – www.bettyhinesbusinessbuilder.vpweb.com Compass Coaching Network – www.mypathmylife.com

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Exhibitors Premier Jewelry – www.premierdesigns.com Traci Lynn Jewelry – www.tracilynnjewelry.com FondMemoPhoto – www.jhicks2-fondmemories.com Ardyss International www.lovemyboss.com & www.bodymagicbyjp.com Duffy Organizer – www.duffyorganizer.com The Afro – www.afro.com Bodies and Backs Therapeutic Massage – www.bodiesandbacks.com Modern Mary – www.modernmary.com Attorney Leah Wills - www.leahtwills.com Mary Kay – www.marykay.com/pdpallstar Moms R The Best- www.momsrthebest.com Janice Stofer Treasures Body And Brains Too Mel Davis – Art 4 Life – www.art4lifeofnc.org Affordable and Historical Art- www.emancipation2000.com Small Business Administration – www.sba.gov Sisters Network, Inc. – www.sistersnetworkinc.org Epilation Clinic/White Swann – www.eplilationclinic.com

Featured Speakers 5


British Hill – Certified Life Empowerment Coach www.britishfordhillcoaching.com

Dr. Joel Martin – Transformation Coach – Advertising & Marketing Expert CEO & President of Triadwest, Inc. www.triadwest.com

Crystal Washington – Social Media Expert & Marketing Strategist www.crystalwashington.com

Kathryn Freeland – Author – Entrepreneur CEO of Freeland and Associates www.anentrepreneursjourney.com

Dr. Joy Ohayia – Author Energizer – Health & Wellness Coach www.drxjoy.com

Speakers Continued L. Denise Jackson – The Green Expert Founder of the Professional Green Network Vonetta Dumas – Image Consultant CEO & Founder of Diverse Images www.professionalgreennetwork.com www.diverse-images.net

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In Order from Left to Right LaFern Batie – CEO of The Batie Group – www.thebatiegroup.com LaTalya Palmer-Lewis – Life Empowerment Coach – www.coachlatalya.com LaTasha Ward – CEO of JKL Enterprises – www.jklproducts.com Beth Borden-Goodman – CEO of Kingdom Klothes – www.kingdomklothes.com Cheryl Pullins – Publisher – www.cherylpullins.com Delayna Keller-Watkins, RN- CEO of Healthy Soul – www.4healthysoul.com Linda Robinson – President of FBBA – www.fbbaalliance.org Saundra Richardson – The Mastermind Group Michelle McBride – CEO PayBizness – www.paybizness.com

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Schedule of Events Friday, March 19, 2010 Welcome/Legends Award Reception –Top Floor Pieces Room 6:30 – 7:15 Mingle – Shopping 7:15 - 8:00 Award Presentation – Dr. Traci Lynn 8:00-9:00 Mingle - Shopping 9:00 – 9:45 Tony Terry Concert 9:45- 10:30 Mingle- Shopping Saturday, March 20, 2010 8:00 – 9:00 Breakfast –Shopping 9:00 - 9:10 Welcome 9:10- 9:55 British Hill 9:55 -10:05 Commercial – Ignite your image 10:05 -10:50 Dr. Joel Martin 10:50-11:00 Commercial - Greenbacks in going Green 11:00-11:15 Giveaways 11:15-1:00 Lunch - Shopping 1:00-1:45 Deborah Hardnett 1:45-1:55 Commercial – Green Backs in going Green 1:55-2:40 Crystal Washington 2:40 -2:50 Commercial – Ignite your image 2:50-3:30 Break –Shopping 3:30-4:15 Kathryn Freeland 4:15-4:30 Fashion Show 4:30-5:15 Dr. Joy Ohayia 5:15 – 6:00 Giveaways Promotions Closing Remarks

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Special Awards Business Woman of the Year

Cheryl Wood CEO & Founder of Moms R The Best www.momsrthebest.com Legend of the Year

Dr. Traci Lynn Author – Entrepreneur – CEO & Founder of Traci Lynn Fashion Jewelry www.tracilynn.com

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Business Directory Listing Company Name

Phone

Website

$UCCE$$FUL ADVANCEMENT/My Harvest America Groceries

609-377-0873

www.MyHarvestAmerica.com/SuccessfulAdvance

AEI Insurance Brokerage

609-429-0336

www.aeiinsurance.com

Affordable Life Coaching

404-758-9927

www.CompassCoachingNow.com

ARC Real Estate

www.lindarobinson.arcrealestate.org

Benefits2fiturbudget

609- 638-1698 cell 866-258-9316

Benefits2fiturbudget

770-881-7988

www.iboplus.com/scook

Blissful Elegance Wedding and Event Planning

718-755-7852

www.blissfulelegance.com

Bodies Shaped Rite BodiesShapedRite@aol.com

973-452-2769

www.ardysslife.com/dargwa

Carmel Coast Publishing Enterprises

917-968-8361

www.carmelcoastpublishing.com

CEO Sister

(404) 447-4532

www.ceosister.net

Changed Living - Spiritual Life Coaching

206-579-6054

www.changedliving.com

Chat, Chew and Chocolate Phoenix

602-341-1500

www.phoenixccc.com

Chaun Vaughn Jewelry

281-749-5183

www.ChaunVaughn.com

Circle of Enlightenment

818-741-8909

www.claimyourconfidencenow.com

Claudette Berry N2N Resources - Jobin Realty

240/421-4499

Coast 2 Coast Cards

602-341-1500

www.coast2coastcards.com

Compro Tax DC/Baltimore

410-962-8866

www.comprotaxdcbalto.com

Destiny Consulting Services

713-445-6092

www.destinyconsultingservices.org

Divine Inspirations Magazine

484-429-5080

www.divineinspirationsmagazine.org

DMW Enterprises, LLC Dolores (Beauty) Williams

877-309-0527

www.fdirep.com/dmwenterprises

Duffy Organizer

301-552-2234

www.duffyorganizer

EVO Platinum Merchant Services

240-375-3520

www.goevo.com

Excede Services Web Design

623-399-4705

www.excededesign.com

ExpressionsDcor Event Design & Decor

713-459-6555

Finding Definitions, Inc

410-960-6682

www.findingdefinitions.com

FreeLife International

815-263-3597

andreas.freelife.com

Garbs For Good

866.745.6738

www.garbsforgood.com

Great Women of God Abroad

888-414-1882

www.wearegwga.camp8.org

Haskins Wealth Management Group, Inc

877-427-9647

www.haskinswealthmanagement.com

Image Promoters LLC

www.everyonebenefits.com/scook

www.theimagepromoters.com

Independent Compass Representative Alica Green

973-592-5224

www.mylifecompass.com/AlicaGreen

iReverse Home Loans, LLC

800-486-8786 ext 711

www.reversemortgagesA+62.com

J3 Solutions Group, LLC (the work from home people)

888-791-8997

www.igotdnafever.com

Keeping Up Books Self Publishing Services

917-971-1350

www.keepingupbooks.com

L and M Travel Agency

301-390-8732

Metamorphosis,Incoporated

205-588-8792

www.metamor4sinc.org

Mind Over Money, LLC

443-801-6788

www.mindovermoneyllc.com

Mitchell Productions

804-346-3210

www.mitchell-productions.com

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Moms R The Best

301-395-7589

www.momsrbest.com

Moreland Service's , LLC

240-547-1543

www.nadinemoreland.com

Nutronix Revolution

877-886-9829

www.nutronixrevolution.com/nx67892

Productivity and Technology Training

404-492-8197

www.DigitalBreakthroughs.com

RENEWURBODY

313.258.6734

www.ardysslife.com/renewurbody

Saperstein & Associates

424-243-6620

www.sapersteinandassociates.info

Shabazz Law PC

312-962-0324

www.shabazzlaw.net

Soul Purpose/ A New Coaching

407-858-9289

www.anewcoaching.com

Spiritual Counseling

310.953.1641

SRFW Enterprise - Corporate Vocals

832-541-0969

Najah@spirit-rizing.com http://bizsynergy.ning.com/profile/CorporateVoc als

Stacy Henderson Arbonne International

301.440.5259

www.Arbonne.com

www.suitabletravel.com

Suitable Travel The DC Fragrance Center

(202) 832-6166

www.dcfragrancecenter.com

The Heel Shield, Inc

www.heelshield.com

Shoe Protection for Drivers

THE LAND of KUSH

410-207-7986

www.thelandofkush.com

Toni Hatton Productions

410-298-2121

www.tonihatton.com

Total Health Change TRACI LYNN FASHION JEWELRY Presented by LaSHAWN MOORE

757-679-3228

http://totalhealthchange.com

202-409-8812

tracilynnjewelry.net/lashawnmoore

Travel Entertainment Management Group, LLC

www.temanagementgroup.com

Tunguska Blast & Mist

609-377-0873

http://healthysuccess.cyberwize.com

Virtual Legal Support

832-689-2842

http://virtuallegalsupport.net/

VISION WEEKEND CONFERENCE

860-355-9838

www.visionweekendconference.com

Weave Good Hair

678 999 2148

www.weavegoodhair.com

While Your Were Out Group, LLC

443-468-3733

whileyouwereouttravel.com

Young Women of Distinction

240-407-4426

www.youngwomenofdistinction.info

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RESOURCE GUIDE Is Entrepreneurship For You? In business, there are no guarantees. There is simply no way to eliminate all the risks associated with starting a small business - but you can improve your chances of success with good planning, preparation, and insight. Start by evaluating your strengths and weaknesses as a potential owner and manager of a small business. Carefully consider each of the following questions: Are you a self-starter? It will be entirely up to you to develop projects, organize your time, and follow through on details. How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers, and professionals such as lawyers, accountants, or consultants. Can you deal with a demanding client, an unreliable vendor, or a cranky receptionist if your business interests demand it? How good are you at making decisions? Small business owners are required to make decisions constantly - often quickly, independently, and under pressure. Do you have the physical and emotional stamina to run a business? Business ownership can be exciting, but it's also a lot of work. Can you face six or seven 12-hour workdays every week? How well do you plan and organize? Research indicates that poor planning is responsible for most business failures. Good organization of financials, inventory, schedules, and production can help you avoid many pitfalls. Is your drive strong enough? Running a business can wear you down emotionally. Some business owners burn out quickly from having to carry all the responsibility for the success of their business on their own shoulders. Strong motivation will help you survive slowdowns and periods of burnout. How will the business affect your family? The first few years of business startup can be hard on family life. It's important for family members to know what to expect and for you to be able to trust that they will support you during this time. There also may be financial difficulties until the business becomes profitable, which could take months or years. You may have to adjust to a lower standard of living or put family assets at risk in the short-term. Why Small Businesses Fail Success in business is never automatic. It isn't strictly based on luck - although a little never hurts. It depends primarily on the owner's foresight and organization. Even then, of course, there are no guarantees. Starting a small business is always risky, and the chance of success is slim. According to the U.S. Small Business Administration, roughly 50% of small businesses fail within the first five years. 13


• • • • • • • •

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In his book Small Business Management, Michael Ames gives the following reasons for small business failure: Lack of experience Insufficient capital (money) Poor location Poor inventory management Over-investment in fixed assets Poor credit arrangements Personal use of business funds Unexpected growth Gustav Berle adds two more reasons in The Do It Yourself Business Book: Competition Low sales More Reasons Why Small Businesses Fail These figures aren't meant to scare you, but to prepare you for the rocky path ahead. Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to work hard, and take all the necessary steps.

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On the Upside It's true that there are many reasons not to start your own business. But for the right person, the advantages of business ownership far outweigh the risks. You will be your own boss. Hard work and long hours directly benefit you, rather than increasing profits for someone else. Earning and growth potential are far greater. A new venture is as exciting as it is risky. Running a business provides endless challenge and opportunities for learning Do You Have What It Takes? Learn the characteristics and habits of creative, successful entrepreneurs. Many successful entrepreneurs have similar traits and characteristics. Learn what these are and what you can do to improve on your own. FICTION: To be an entrepreneur, you must be born that way. FACT: Anyone can learn to operate like an entrepreneur. 14


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What are the similarities of successful entrepreneurs? Persistence Desire for immediate feedback Inquisitiveness Strong drive to achieve High energy level Goal-oriented behavior Independent Demanding Self-confident Calculated risk taker Creative Innovative Vision Commitment Problem solving skills Tolerance for ambiguity Strong integrity Highly reliable Personal initiative Ability to consolidate resources Strong management and organizational skills Competitive Change agent Tolerance for failure Desire to work hard Luck Many entrepreneurs also had a role model to influence them early on and parents who were entrepreneurs Two traits necessary for successful entrepreneurs are creativity and innovation. What is Creativity? Creativity is being able to create new ideas and ways to solve problems that provide cool opportunities.

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Characteristics of Creative People Bright Adaptable High self esteem Challenge-oriented Idea-oriented Inquisitive 15


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Curious Can you improve your creativity? YES! How? Gather as much information as you can (read, talk with experts, etc.); brainstorm over time. Just think about the problem or issue until an idea comes to you. Is the solution reasonable? If so, try it. If not, keep thinking. Did it work? If so, great. If not, begin the process over again. Don't put barriers on your mind. Put these steps to use. Left Brain Analytical Rational Right Brain Intuitive Artistic You need both sides of your brain when being creative, as they compliment each other. What is an Innovation? Something that is invented (ex. CDs), or Something that is created from an existing idea or product (ex. Super Wal-Mart). Where do innovative ideas come from? Unsatisfied customers Demographic changes in society Luck Imagination Vision Problem-solving How do I get a small business loan? You should prepare a business plan, including your loan proposal, and submit it to a local lender. If the lender is unable to approve your loan, you may request that your application be submitted, by the lender, to the SBA. The SBA can guarantee up to 80% of a small business loan; however, the lender must agree to loaning the money with the SBA guarantee. The lender will then forward your loan application and a credit analysis to the nearest SBA District Office. If the lender needs SBA applications and/or guidance it may contact the nearest SBA District Office by going to SBA. Upon SBA approval, the lending institution closes the loan and disburses the funds. For further information and eligibility requirements, please go to financial assistance basics.

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How do I get a small business grant? At this time, Congress has not set aside any monies for grants to start and/or expand a small business. SBA does provide a loan guarantee program for loans made by your local lender. The SBA guarantees loans that the lender could not normally approve. However, all funding is handled through your local lender. For basic information visit Grants. How do I get started in a business? The U.S. Small Business Administration (SBA) provides a wealth of information on starting a business at the SBA home page sba.gov under "Small Business Planner." You will find information on writing a business plan as well. You may take advantage of SBA’s resource partners. The Service Corps of Retired Executives (SCORE) and the Small Business Development Center (SBDC) provides free one-on-one counseling to those interested in starting and expanding a business. This includes critiquing your business plan, legal requirements, marketing, and licenses needed for your business. To find the location nearest you, please visit us at SBA and click on your state. How do I get a business license? Licensing is generally handled through your state or local government. You will need to consult your local telephone directory in the "Government" section for an office that will assist you with a license or permit. See Business Licenses and Permits. For FREE one-on-one counseling, please go to SBA's home page sba.gov and select "Local Resources" for an area local contact nearest you. The Service Corps of Retired Executives and the Small Business Development Center can assist you with your business venture. How do I write a business plan? If you go to SBA's home page sba.gov and select "Writing a Business Plan" under “Small Business Planner.” You will find information on starting a business and writing a business plan. Under "SBA local resources" you can find local contacts such as the Service Corps of Retired Executives and the Small Business Development Center that provide FREE one-on-one counseling in the area of starting and expanding a small business. They can assist you by critiquing your business plan and your business ideas. You can locate a center by selecting "Local Resources" under sba.gov as well. What type of collateral do I need for a loan? Repayment ability from the cash flow of the business is a primary consideration in the SBA loan decision process but good character, management capability, collateral, and owner's equity contribution are also important considerations. All owners of twenty percent (20%) or more of the business are required to personally guarantee SBA loans.The SBA does not deny approval for a SBA Guarantee Loan solely due to lack of collateral; however, it can be used as a reason in addition to other credit factors. For more information on requirements on a SBA Guarantee Loan as well as our guarantee loan programs available, please visit us at SBA.

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Is there any business assistance available in my area? Yes. There are 375 SCORE: Counselors to America's Small Business chapters and approximately 1,000 Small Business Development Centers (SBDC) nationwide. SCORE provides free expert advice based on many years of firsthand experience and shared knowledge on virtually every aspect of business. The SBDC provides a variety of management and technical assistance services to small businesses and potential entrepreneurs. To locate the nearest SCORE or SBDC in your area

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Glossary of Terms ACCOUNTS PAYABLE Trade accounts of businesses representing obligations to pay for goods and services received. ACCOUNTS RECEIVABLE Trade accounts of businesses representing moneys due for goods sold or services rendered evidenced by notes, statements, invoices, or other written evidence of a present obligation. ACCOUNTING The recording, classifying, summarizing, and interpreting in a significant manner and in terms of money, transactions, and events of a financial character. ASSUMPTIONS The act of assuming/undertaking another's debts or obligations. AUCTION A public sale of goods to the highest bidder. AUTOMATIC DATA PROCESSING Data processing largely performed by automatic means. The discipline which deals with methods and techniques of automatic data processing. Pertaining to data processing equipment such as electrical accounting machines and electronic data processing equipment. BANKRUPTCY A condition in which a business cannot meet its debt obligations and petitions a federal district court for either reorganization of its debts or liquidation of its assets. In the action the property of a debtor is taken over by a receiver or trustee in bankruptcy for the benefit of the creditors. This action is conducted as prescribed by the National Bankruptcy Act, and may be voluntary or involuntary. BREAKEVEN POINT The breakeven point in any business is that point at which the volume of sales or revenues exactly equals total expenses - the point at which there is neither a profit nor loss - under varying levels of activity. The breakeven point tells the manager what level of output or activity is required before the firm can make a profit; reflects the relationship between costs, volume, and profits. BUSINESS BIRTH Formation of a new establishment or enterprise. BUSINESS DEATH Voluntary or involuntary closure of a firm or establishment. BUSINESS DISSOLUTION For enumeration purposes, the absence from any current record of a business that was present in a prior time period. BUSINESS FAILURE The closure of a business causing a loss to at least one creditor. BUSINESS PLAN A comprehensive planning document which clearly describes the business developmental objective of an existing or proposed business applying for assistance in SBA's 8(a) or lending programs. The plan outlines what and how and from where the resources needed to accomplish 19


the objective will be obtained and utilized. BUSINESS START For enumeration purposes, a business with a name or similar designation that did not exist in a prior time period. CANCELED LOAN The annulment or rescission of an approved loan prior to disbursement. CAPITAL Assets less liabilities, representing the ownership interest in a business; a stock of accumulated goods, especially at a specified time and in contrast to income received during a specified time period; accumulated goods devoted to the production of goods; (4) accumulated possessions calculated to bring income. CAPITAL EXPENDITURES Business spending on additional plant equipment and inventory. CAPITALIZED PROPERTY Personal property of the agency which has an average dollar value of $300.00 or more and a life expectancy of one year or more. Capitalized property shall be depreciated annually over the expected useful life to the agency. CASH DISCOUNT An incentive offered by the seller to encourage the buyer to pay within a stipulated time. For example, if the terms are 2/10/N 30, the buyer may deduct 2 percent from the amount of the invoice (if paid within 10 days); otherwise, the full amount is due in 30 days. CASH FLOW An accounting presentation showing how much of the cash generated by the business remains after both expenses (including interest) and principal repayment on financing are paid. A projected cash flow statement indicates whether the business will have cash to pay its expenses, loans, and make a profit. Cash flows can be calculated for any given period of time, normally done on a monthly basis. CHARACTER A letter, digit, or other symbol that is a part of the organization, control, or representation of data used in computer systems. CHARGE-OFF An accounting transaction removing an uncollectible balance from the active receivable accounts. CHARGED OFF LOAN An uncollectible loan for which the principal and accrued interest were removed from the receivable accounts. CLOSING Actions and procedures required to affect the documentation and disbursement of loan funds after the application has been approved and the execution of all required documentation and its filing and recording where required.

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CLOSED LOAN Any loan for which funds have been disbursed and all required documentation has been executed, received, and reviewed. For statistical purposes, first or total disbursement is counted as a closed loan. COLLATERAL Something of value - securities, evidence of deposit, or other property - pledged to support the repayment of an obligation. COLLATERAL DOCUMENT A legal document covering the item(s) pledged as collateral on a loan, i.e., note, mortgages, assignment, etc. CONSORTIUM A coalition of organizations, such as banks and corporations, set up to fund ventures requiring large capital resources. CORPORATION A group of persons granted a state charter legally recognizing them as a separate entity having its own rights, privileges, and liabilities distinct from those of its members. The process of incorporating should be completed with the state's secretary of state or state corporate counsel, and usually requires the services of an attorney. COMPROMISE The settlement of a claim resulting from a defaulted loan for less than the full amount due. Compromise settlement is a procedure available for use only in instances where the government cannot collect the full amount due within a reasonable time, by enforced collection proceedings, or where the cost of such proceedings would not justify such effort. CONTINGENT LIABILITY A potential obligation that may be incurred dependent upon the occurrence of a future event. Two examples are: (1) the liability of an endorser or guarantor of a note if the primary borrower fails to pay as agreed and (2) the liability that would be incurred if a pending lawsuit is resolved in the other party's favor. COSTS Money obligated for goods and services received during a given period of time, regardless of when ordered or whether paid for. CREDIT RATING A grade assigned to a business concern to denote the net worth and credit standing to which the concern is entitled in the opinion of the rating agency as a result of its investigation. DATA ELEMENT The basic unit of identifiable and definable information. A data element occupies the space provided by fields in a record or blocks on a form. It has an identifying name and value or values for expressing a specific fact. For example, a data element named "Color of Eyes" could have recorded values of "Blue (a name)," "Bl (an abbreviation)," "06 (a code)." Similarly, a data element named "Age of Employee" could have a recorded value of "28" (a numeric value). DEBENTURE Debt instrument evidencing the holder's right to receive interest and principal installments from the named obligor. Applies to all forms of unsecured, long-term debt evidenced by a certificate of debt. 21


DEBT CAPITAL Business financing that normally requires periodic interest payments and repayment of the principal within a specified time. DEBT FINANCING The provision of long term loans to small business concerns in exchange for debt securities or a note. DEED OF TRUST A document under seal which, when delivered, transfers a present interest in property. May be held as collateral. DEFAULTS The nonpayment of principal and/or interest on the due date as provided by the terms and conditions of the note. DEFERRED LOAN Loans whose principal and or interest installments are postponed for a specified period of time. DISBURSEMENT The actual payout to borrower of loan funds, in whole or part. It may be concurrent with the closing or follow it. DISBURSING OFFICER An employee authorized to pay out cash or issue checks in settlement of vouchers approved by a certifying officer. DIVESTITURE Change of ownership and/or control of a business from a majority (non-disadvantaged) to disadvantaged persons. EARNING POWER The demonstrated ability of a business to earn a profit, over time, while following good accounting practices. When a business shows a reasonable profit on invested capital after fully maintaining the business property, appropriately compensating its owner and employees, servicing its obligations, and fully recognizing its costs, the business may be said to have demonstrated earning power. Demonstrated earning power is the foremost test of the business risk in pressing upon an application for a loan. EASEMENT A right or privilege that a person may have on another's land, as the right of a way or ingress or egress. EMPLOYEE ASSISTANCE PROGRAM (EAP) COORDINATOR Coordinates the activities of Central Office or regional counselors, maintains a community resource list of available professional assistance to troubled employees, and a current roster of EAP counselors for the area of his/her jurisdiction. EAP COUNSELOR Conducts confidential consultations with troubled employees who so request, who are referred for objective analysis of a personal problem, and for identification of the best available assistance and/or professional services needed to resolve the employee's problem. ENTERPRISE Aggregation of all establishments owned by a parent company. An enterprise can consist of a single, independent establishment or it can include subsidiaries or other branch establishments under the same ownership and control. 22


ENTREPRENEUR One who assumes the financial risk of the initiation, operation, and management of a given business or undertaking. EQUITY An ownership interest in a business. EQUITY FINANCING The provision of funds for capital or operating expenses in exchange for capital stock, stock purchase warrants, and options in the business financed without any guaranteed return, but with the opportunity to share in the company's profits. Equity financing includes long-term subordinated securities containing stock options and/or warrants. Utilized in SBIC financing activities. EQUITY PARTNERSHIP A limited partnership arrangement for providing startup and seed capital to businesses. ESCROW ACCOUNTS Funds placed in trust with a third party by a borrower for a specific purpose and to be delivered to the borrower only upon the fulfillment of certain conditions. ESTABLISHMENT A single-location business unit, which may be independent - called a single- establishment enterprise - or owned by a parent enterprise. FINANCIAL REPORTS Reports commonly required from applicants request for financial assistance, e.g.: Balance Sheet - A report of the status of a firm's assets, liabilities and owner's equity at a given time. Income Statement - A report of revenue and expense which shows the results of business operations or net income for a specified period of time. Cash Flow A report which analyzes the actual or projected source and disposition of cash during a past or future accounting period. FINANCING New funds provided to a business, by either loans, purchase of debt securities, or capital stock. FLOW CHART A graphical representation for the definition, analysis, or solution of a problem, in which symbols are used to represent operations, data, flow, equipment, etc. FORECLOSURE The act by the mortgagee or trustee upon default in the payment of interest or principal of a mortgage of enforcing payment of the debt by selling the underlying security. FRANCHISING A continuing relationship in which the franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing, and managing in return for a consideration. Franchising is a form of business by which the owner (franchisor) of a product, service, or method obtains distribution through affiliated dealers (franchisees). The product, method, or service being marketed is usually identified by the franchisor's brand name, and the holder of the privilege (franchisee) is often given exclusive access to a defined geographical area. 23


GROSS DOMESTIC PRODUCT (GDP) The most comprehensive single measure of aggregate economic output. Represents the market value of the total output of the goods and services produced by a nation's economy. GROSS NATIONAL PRODUCT (GNP) A measure of a nation's aggregate economic output. Since 1991 GDP, a slightly different calculation, has replaced GNP as a measure of U.S. economic output. GUARANTEED LOAN A loan made and serviced by a lending institution under agreement that a governmental agency will purchase the guaranteed portion if the borrower defaults. HARDWARE A term used to describe the mechanical, electrical, and electronic elements of a data processing system. HAZARD INSURANCE Insurance required showing lender as loss payee covering certain risks on real and personal property used for securing loans. INCUBATOR A facility designed to encourage entrepreneurship and minimize obstacles to new business formation and growth, particularly for high technology firms, by housing a number of fledgling enterprises that share an array of services. These shared services may include meeting areas, secretarial services, accounting services, research libraries, on-site financial and management counseling, and word processing facilities. INDEPENDENT AND QUALIFIED PUBLIC ACCOUNTANTS Public accountants are independent when neither they nor any of their family have a material, direct, or indirect financial interest in the borrower other than as an accountant. They are qualified, unless there is contrary evidence, when they are either (1) certified, licensed, or otherwise registered if so required by the state in which they work, or (2) have worked as a public accountant for at least five years and are accepted by SBA. INDUSTRIAL REVENUE BOND (IRB) A tax-exempt bond issued by a state or local government agency to finance industrial or commercial projects that serve a public good. The bond usually is not backed by the full faith and credit of the government that issues it, but is repaid solely from the revenues of the project and requires a private sector commitment for repayment. INNOVATION Introduction of a new idea into the marketplace in the form of a new product or service or an improvement in organization or process. INSOLVENCY The inability of a borrower to meet financial obligations as they mature or having insufficient assets to pay legal debts. INTEREST An amount paid a lender for the use of funds. INVERSE ORDER OF MATURITY When payments are received from borrowers that are larger than the authorized repayment schedules, the overpayment is credited to the final installments of the principal, which reduces 24


the maturity of the loan and does not affect the original repayment schedule. INVESTMENT BANKING Businesses specializing in the formation of capital. This is done by outright purchase and sale of securities offered by the issuer, standby underwriting, or "best efforts selling." INVITATION FOR BIDS Formal solicitations for offerings to perform procurements by competitive bids when the specifications describe the requirements of the government clearly, accurately, and completely, but avoiding unnecessarily restrictive specifications or requirements which might unduly limit the number of bidders. JOB DESCRIPTION A written statement listing the elements of a particular job or occupation, e.g., purpose, duties, equipment used, qualifications, training, physical and mental demands, working conditions, etc. JUDGMENT Judicial determination of the existence of an indebtedness or other legal liability. JUDGMENT BY CONFESSION The act of debtors permitting judgment to be entered against them for a given sum with a statement to that effect, without the institution of legal proceedings. JUNK BOND A high-yield corporate bond issue with a below-investment rating that became a growing source of corporate funding in the 1980s. LEASE A contract between the owner (leassor) and the tenant (leassee) stating the conditions under which the tenant may occupy or use the property. LEGAL RATE OF INTEREST The maximum rate of interest fixed by the laws of the various states which a lender may charge a borrower for the use of money. LENDING INSTITUTION Any institution, including a commercial bank, savings and loan association, commercial finance company, or other lender qualified to participate with SBA in the making of loans. LEVERAGED BUY-OUT The purchase of a business with financing provided largely by borrowed money, often in the form of junk bonds. LIEN A charge upon or security interest in real or personal property maintained to ensure the satisfaction of a debt or duty ordinarily arising by operation of law. LIQUIDATION The disposal, at maximum prices, of the collateral securing a loan and the voluntary and enforced collection of the remaining loan balance from the obligators and/or guarantors. LIQUIDATION VALUE The net value realizable in the sale (ordinarily a forced sale) of a business or a particular asset. LITIGATION Refers to a loan in "liquidation status" which has been referred to attorneys for legal action. Also: The practice of taking legal action through the judicial process. LOAN AGREEMENT 25


Agreement to be executed by borrower, containing pertinent terms, conditions, covenants, and restrictions. LOAN PAYOFF AMOUNT The total amount of money needed to meet a borrower's obligation on a loan. It is arrived at by accruing gross interest for one day and multiplying this figure by the number of days that exist between the date of the last repayment and the date on which the loan is to be completely paid off. This amount, known as accrued interest, is combined with the latest principal and escrow balances that are applicable to what is now referred to as the loan payoff amount. In the case where prepaid interest exceeds the accrued interest, the latter is subtracted from the former and the difference is used to reduce the total amount owed. LOSS RATE A rate developed by comparing the ratio of total loans charged off to the total loans disbursed from inception of the program to the present date. LOSS RESERVE ADJUSTMENT RATE A reserve rate based upon the ratio of the aggregate net chargeoffs (chargeoffs less recoveries) for the most recent five years to the total average loans outstanding for the comparable 5-year period. MARKUP Markup is the difference between invoice cost and selling price. It may be expressed either as a percentage of the selling price or the cost price and is supposed to cover all the costs of doing business plus a profit. Whether markup is based on the selling price or the cost price, the base is always equal to 100 percent. MATURITY As applied to securities and commercial paper, the period end date when payment of principal is due. MATURITY EXTENSIONS Extensions of payment beyond the original period established for repayment of a loan. MERGER A combination of two or more corporations wherein the dominant unit absorbs the passive ones, the former continuing operation usually under the same name. In a consolidation two units combine and are succeeded by a new corporation, usually with a new title. MORTGAGE An instrument giving legal title to secure the repayment of a loan made by the mortgagee (lender). In legal contemplation there are two types: (1) title theory - operates as a transfer of the legal title of the property to the mortgagee, and (2) lien theory - creates a lien upon the property in favor of the mortgagee. NEGOTIATION The face to face process used by local unions and the employer to exchange their views on those matters involving personnel policies and practices or other matters affecting the working conditions of employees in the unit and reduced to a written binding agreement. Used also by contracting officers to reach agreement with potential contractors. NEGOTIATION DISPUTE That point in negotiations where labor and management cannot come to an agreement on some or all of the issues on the bargaining table and the services of the FMCS have not been utilized. NEGOTIATED GRIEVANCE PROCEDURE 26


The sole and exclusive procedure available to all employees in a bargaining unit and the employer for processing grievances and disputes. NET WORTH Property owned (assets), minus debts and obligations owed (liabilities), is the owner's equity (net worth). NOTES AND ACCOUNTS RECEIVABLE A secured or unsecured receivable evidenced by a note or open account arising from activities involving liquidation and disposal of loan collateral. OBLIGATIONS Technically defined as "amount of orders placed, contracts awarded, services received, and similar transactions during a given period which will require payments during the same or a future period." ORDINARY INTEREST Simple interest based on a year of 360 days, contrasting with exact interest having a base year of 365 days. OUTLAYS Net disbursements (cash payments in excess of cash receipts) for administrative expenses and for loans and related costs and expenses (e.g., gross disbursements for loans and expenses minus loan repayments, interest and fee income collected, and reimbursements received for services performed for other agencies). PARTNERSHIP A legal relationship existing between two or more persons contractually associated as joint principals in a business. PATENT A patent for an invention is the grant of a property right to the inventor, issued by the Patent and Trademark Office. The term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. US patent grants are effective only within the US, US territories, and US possessions. PRIME RATE Interest rate which is charged to business borrowers having the highest credit ratings for short term borrowing. PRO-Net An Internet-based database of information of small, disadvantaged, 8(a), and women-owned businesses seeking procurement contracts. PRODUCT LIABILITY Type of tort or civil liability that applies to product manufacturers and sellers. PROFESSIONAL AND TRADE ASSOCIATIONS Non-profit, cooperative, and voluntary organizations that are designed to help their members in dealing with problems of mutual interest. In many instances, professional and trade associations enter into an agreement with the SBA to provide volunteer counseling to the small business community. PROPRIETORSHIP The most common legal form of business ownership; about 85 percent of all small businesses are 27


proprietorships. The liability of the owner is unlimited in this form of ownership. PROTEST A statement in writing by any bidder or offeror on a particular procurement alleging that another bidder or offeror on such procurement is not a small business concern. RATIO Denotes relationships of items within and between financial statements, e.g., current ratio, quick ratio, inventory turnover ratio, and debt/net worth ratios. REQUEST FOR PROPOSALS Solicitations for offerings for competitive negotiated procurements when it is impossible to draft an invitation for bids containing adequate detailed description of the required property and services. There are 15 circumstances in the Federal Acquisition Regulations (FAR) which permit negotiated procurements. RETURN ON INVESTMENT The amount of profit (return) based on the amount of resources (funds) used to produce it. Also the ability of a given investment to earn a return for its use. SECONDARY MARKET Those who purchase an interest in a loan from an original lender, such as banks, institutional investors, insurance companies, credit unions, and pension funds. SERVICE CORPS OF RETIRED EXECUTIVES (SCORE) Retired and working successful business persons who volunteer to render assistance in counseling, training, and guiding small business clients. SMALL BUSINESS DEVELOPMENT CENTERS (SBDC) The SBDC is a university-based center for the delivery of joint government, academic, and private sector services for the benefit of small business and the national welfare. It is committed to the development and productivity of business and the economy in specific geographical regions. TURNOVER (Business) Turnover is the number of times that an average inventory of goods is sold during a fiscal year or some designated period. Care must be taken to ensure that the average inventory and net sales are both reduced to the same denominator; that is, divide inventory at cost into sales at cost or divide inventory at selling price into sales at selling price. Do not mix cost price with selling price. The turnover, when accurately computed, is one measure of the efficiency of a business. UNDELIVERED ORDERS The amount of orders for goods and services outstanding for which the liability has not yet accrued. For practical purposes, represents obligations incurred for which goods have not been delivered or services not performed. UNFAIR LABOR PRACTICE Action by either the employer or union which violates the provisions of EO 11491 as amended. UNIFORM COMMERCIAL CODE Codification of uniform laws concerning commercial transactions. In SBA parlance, generally refers to a uniform method of recording and enforcing a security interest or charge upon existing 28


or to be acquired personal property. USURY Interest which exceeds the legal rate charged to a borrower for the use of money. VENTURE CAPITAL Money used to support new or unusual commercial undertakings; equity, risk, or speculative capital. This funding is provided to new or existing firms that exhibit above-average growth rates, a significant potential for market expansion, and the need for additional financing for business maintenance or expansion. WORD PROCESSING The efficient and effective production of written communications at the lowest possible cost through the combined use of systems management procedures, automated technology, and accomplished personnel. The equipment used in word processing applications includes but is not limited to the following: dictation and transcription equipment, automatic repetitive typewriters, visual display text editing typewriters, keyboard terminals, etc. WORKERS' COMPENSATION A state-mandated form of insurance covering workers injured in job-related accidents. In some states the state is the insurer; in other states insurance must be acquired from commercial insurance firms. Insurance rates are based on a number of factors, including salaries, firm history, and risk of occupation.

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Starting Your Business One on One Starting a business requires you to complete a number of steps and make some key decisions. Though part of your overall plan, you’ll need to select a location, decide on a business structure, and obtain the necessary licenses and permits. In addition, determining which financing options will meet your short-term needs and long-term goals is crucial. Within this section, we’ll provide information on these topics along with guidance on buying an existing business, copyright and trademark issues, and getting support from an outside expert. Find a Mentor Never think you can do it alone! One of the best ways to insulate yourself against business failure is to find and work with a mentor, someone with business experience who can guide and assist you. Service Corps Of Retired Executives (SCORE) Link to retired professionals who are available to give you advice. Small Business Development Centers Link to organizations to help your small business grow and prosper. Network Of Training And Counseling Services Link to these connections to help with professional training and counseling.

StartUp Costs Every business is different and has its own specific cash needs at different stages of development; therefore there is no generic method for estimating your startup costs. Some businesses can be started on a shoestring budget, while others may require considerable investment in inventory or equipment. It is vital to know whether you will have enough money to launch your business venture. To determine your startup costs, you must identify all the expenses your business will incur during its startup phase. Some of these expenses will be one-time costs, such as the fee for incorporating your business and the price of a sign for your building. Some expenses will be ongoing, such as the cost of utilities, inventory, insurance, etc. While identifying these costs, decide whether they are essential or optional. A realistic startup budget should only include those elements that are necessary to start the business. These essential expenses can then be divided into two separate categories: fixed (overhead) expenses and variable (related to business sales) expenses. Fixed expenses will include figures like the monthly rent, utilities, and administrative and insurance costs. Variable expenses will include inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service.

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The most effective way to calculate your startup costs is to use a worksheet that lists the various categories of costs (both one-time and ongoing) that you will need to estimate prior to starting your business. Estimating Cost In order to determine how much seed money you will need, you must estimate the costs of your business for at least the first several months. Every business is different, and has its own specific cash needs at different stages of development, so there is no universal method for estimating your startup costs. Some businesses can be started on a shoestring budget, while others may require considerable investment in inventory or equipment. It is vitally important to know that you will have enough money to launch your business venture. To determine your startup costs, you must identify all the expenses that your business will incur during its startup phase. Some of these expenses will be one-time costs such as the fee for incorporating your business or price of a sign for your building. Some will be ongoing, such as the cost of utilities, inventory, insurance, etc. While identifying these costs, decide whether they are essential or optional. A realistic startup budget should only include those things that are necessary to start that business. These essential expenses can then be divided into two separate categories: fixed and variable. Fixed expenses include rent, utilities, administrative costs, and insurance costs. Variable expenses include inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service. The most effective way to calculate your startup costs is to use a worksheet that lists all the various categories of costs (both one-time and ongoing) that you will need to estimate prior to starting your business. Breaking Even Analysis Breakeven analysis is a tool used to determine when a business will be able to cover all its expenses and begin to make a profit. For the startup business, it is extremely important to know your startup costs, which provide you with the information you need to generate enough sales revenue to pay the ongoing expenses related to running your business. A startup business owner must understand that $5,000 of product sales will not cover $5,000 in monthly overhead expenses. The cost of selling $5,000 in retail goods could easily be $3,000 at the wholesale price, so the $5,000 in sales revenue only provides $2,000 in gross profit. The breakeven point is reached when revenue equals all business costs. To calculate your breakeven point, you will need to identify your fixed and variable costs. Fixed costs are expenses that do not vary with sales volume, such as rent and administrative salaries. These expenses must be paid regardless of sales, and are often referred to as overhead costs. Variable costs fluctuate directly with sales volume, such as purchasing inventory, shipping, and manufacturing a product. The formula for determining your breakeven point requires no more than simple arithmetic. 31


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Before seeking financial assistance, ask yourself the following: Do you need more capital or can you manage existing cash flow more effectively? How do you define your need? Do you need money to expand or as a cushion against risk? How urgent is your need? You can obtain the best terms when you anticipate your needs rather than looking for money under pressure. How great are your risks? All businesses carry risks, and the degree of risk will affect cost and available financing alternatives. In what state of development is the business? Needs are most critical during transitional stages. For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs. What is the state of your industry? Depressed, stable, or growth conditions require different approaches to money needs and sources. Businesses that prosper while others are in decline will often receive better funding terms. Is your business seasonal or cyclical? Seasonal needs for financing generally are short term. Loans advanced for cyclical industries such as construction are designed to support a business through depressed periods. How strong is your management team? Management is the most important element assessed by money sources. Perhaps most importantly, how does your need for financing mesh with your business plan? If you don't have a business plan, make writing one your first priority. All capital sources will want to see your business plan for the start-up and growth of your business. Not All Money Is the Same There are two types of financing: equity and debt financing. When looking for money, you must consider your company's debt-to-equity ratio - the relation between dollars you've borrowed and dollars you've invested in your business. The more money owners have invested in their business, the easier it is to attract financing. If your firm has a high ratio of equity to debt, you should probably seek debt financing. However, if your company has a high proportion of debt to equity, experts advise that you should increase your ownership capital (equity investment) for additional funds. That way you won't be overleveraged to the point of jeopardizing your company's survival. Equity Financing Most small or growth-stage businesses use limited equity financing. As with debt financing, additional equity often comes from non-professional investors such as friends, relatives, employees, customers, or industry colleagues. However, the most common source of professional equity funding comes from venture capitalists. These are institutional risk takers and may be groups of wealthy individuals, government-assisted sources, or major financial institutions. Most specialize in one or a few closely related industries. The high-tech industry of California's Silicon 32


Valley is a well-known example of capitalist investing. Venture capitalists are often seen as deep-pocketed financial gurus looking for start-ups in which to invest their money, but they most often prefer three-to-five-year old companies with the potential to become major regional or national concerns and return higher-than-average profits to their shareholders. Venture capitalists may scrutinize thousands of potential investments annually, but only invest in a handful. The possibility of a public stock offering is critical to venture capitalists. Quality management, a competitive or innovative advantage, and industry growth are also major concerns. Different venture capitalists have different approaches to management of the business in which they invest. They generally prefer to influence a business passively, but will react when a business does not perform as expected and may insist on changes in management or strategy. Relinquishing some of the decision-making and some of the potential for profits are the main disadvantages of equity financing. Debt Financing There are many sources for debt financing: banks, savings and loans, commercial finance companies, and the U.S. Small Business Administration (SBA) are the most common. State and local governments have developed many programs in recent years to encourage the growth of small businesses in recognition of their positive effects on the economy. Family members, friends, and former associates are all potential sources, especially when capital requirements are smaller. Traditionally, banks have been the major source of small business funding. Their principal role has been as a short-term lender offering demand loans, seasonal lines of credit, and singlepurpose loans for machinery and equipment. Banks generally have been reluctant to offer longterm loans to small firms. The SBA guaranteed lending program encourages banks and non-bank lenders to make long-term loans to small firms by reducing their risk and leveraging the funds they have available. The SBA's programs have been an integral part of the success stories of thousands of firms nationally. In addition to equity considerations, lenders commonly require the borrower's personal guarantees in case of default. This ensures that the borrower has a sufficient personal interest at stake to give paramount attention to the business. For most borrowers this is a burden, but also a necessity Information Provided By The Small Business Administration www.sba.gov

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The Economic Impact of Women-Owned Businesses In the United States Underwritten by:

Walmart National Women’s Business Council Center for Women’s Business Research October 2009

1760 Old Meadow Road, Suite 500 McLean, VA 22102

703-556-7162 www.womensbusinessresearch.org

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Acknowledgements The Center for Women’s Business Research would like to thank Walmart and the National Women’s Business Council (NWBC) for their generous support which made this research possible. We would also like to thank Women Impacting Public Policy (WIPP) for their support and highlighting the research at the 2009 Economic Summit in Washington, D.C. We would also like to thank the Jacksonville [Florida] Women’s Business Center, which initiated one of the first studies of this kind in the nation, and Dr. Gordon McClung of Waynesburg University, whose initiative and contributions were instrumental in the Jacksonville study. And last, but not least, we want to thank our co-authors of this study for their meticulous and diligent analyses of the data and the economic modeling used to produce the final results. Dr. Hassan Pordeli, Hugh F. Culverhouse Professor of Economics and Finance, Davis College of Business, Jacksonville University and Mr. Peter Wynkoop, Principal, The HPW Group and President of the Economic Roundtable of Jacksonville

Center for Women’s Business Research The Center for Women’s Business Research provides data-driven knowledge that propels the growth of women business owners and their enterprises to economic and social significance. We do this by setting the national agenda; creating insight on the status and achievements of women business owners; altering perceptions about the economic viability and progress of women-owned enterprises; and driving awareness of the economic and social impact of this vital business sector. Visit us online at www.womensbusinessresearch.org.

Walmart

Wal-Mart Stores, Inc. (NYSE: WMT), or “Walmart,” serves customers and members more than 200 million times per week at more than 8,000 retail units under 53 different banners in 15 countries. With fiscal year 2009 sales of $401 billion, Walmart employs more than 2.1 million associates worldwide. A leader in sustainability, corporate philanthropy and employment opportunity, Walmart ranked first among retailers in Fortune Magazine’s 2009 Most Admired Companies survey. Additional information about Walmart can be found by visiting www.walmartstores.com. Online merchandise sales are available at www.walmart.com and www.samsclub.com.

National Women’s Business Council (NWBC) The National Women’s Business Council is a bi-partisan Federal government council created to serve as an independent source of advice and counsel to the President, Congress, and the U.S. Small Business Administration on economic issues of importance to women business owners. Members of the Council are prominent women business owners and leaders of women’s business organizations. For more information about the Council, its mission and activities, visit www.nwbc.gov. 35


Women Impacting Public Policy (WIPP) Women Impacting Public Policy is a national bi-partisan group comprising over half a million members. The non-profit organization is the public policy voice for 49 national Women in Business groups and is The Voice for Women in Business in Our Nation’s Capital. WIPP strengthens its members’ sphere of influence in the legislative process, creates economicopportunities for members and builds alliances with other small business organizations. Visit www.wipp.org. Economic Impact of Women-Owned Firms

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Table of Contents Executive Summary

1

Introduction

2

Scope of the Study

2

How Women Business Owners Create Jobs and Income

3

Sample and Model Results

4

Output Effect

5

Income Effect

5

Employment Effect

5

National Projections

9

Conclusions

10

Methodology

11

IMPLAN Model

11

References

13

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Economic Impact of Women-Owned Firms

38


Table of Tables and Figures Figures Figure 1

How Women Business Owners Create Jobs and Income

4

Figure 2

Labor Income and Output

6

Figure 3

Employment

6

Figure 4

Women-Owned Businesses by Industry-2008

7

Figure 5

Sample Industries with Highest Revenues

8

Table 1

Women Business Owners Survey 2009 IMPLAN Analysis

5

Table 2

The Most Impacted Industries-Number of Firms

7

Table 3

Industries with Highest Revenues

8

Table 4

Women Business Owners Projected 2008 National Impact

9

Table 5

Projected Economic Impact of Majority-Women-Owned Businesses

9

Tables

Economic Impact of Women-Owned Firms

39


The Economic Impact of Women-Owned Businesses in The United States Executive Summary For the first time, the Center for Women’s Business Research, has utilized a methodology to measure the economic impact of the estimated 8 million U.S. businesses currently majority women-owned. Today, women-owned firms have an economic impact of $3 trillion annually that translates into the creation and/or maintenance of more than 23 million jobs - 16 percent of all U.S. jobs! These jobs not only sustain the individual worker, but contribute to the economic security of their families, the economic vitality of their communities and the nation.

If U.S.-based women-owned businesses were their own country, they would have th the 5 largest GDP in the world, trailing closely behind Germany, and ahead of countries including France, United Kingdom and Italy. The significance of the total amount of economic impact – $2.8 trillion – once again proves that women-owned firms are not a small, niche market but are a major contributor and player in the overall economy. It also reveals the magnitude of importance that small business plays in the overall economy. According to SBA’s Office of Advocacy, 99.7 percent of all employer firms are classified as “small businesses (less than 500 employees);” small businesses employ 51% of all people; have generated nearly two-thirds (64%) of net new jobs over the past decade and a half; and produce 13 times more patents per employee than large patenting firms. From 1997-2002, women-owned firms were growing at twice the rate of all other groups and while the current economic woes have dampened business growth for all segments, women continue to keep pace. However, in most public conversations and in most people’s minds, the important player in the economy is the large corporations – which only account for .03 percent of all firms and employ fewer people than small businesses do in total. This research illuminates the economic reality and calls for changing the conversation at a policy level and in the public sphere. The data indicate a continuing social and cultural shift for work and for women. Full or part time entrepreneurship is a well-established trend. From 1997 to 2002, the Census data report that nearly all growth in small businesses came in the non-employer segment and women had the largest growth compared to other groups. The overarching shift reflects the education, experience and characteristics of women at different stages of their lives. It also reflects the lack of opportunities and flexibility in major corporations and large businesses for women.

Economic Impact of Women-Owned Firms

1

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INTRODUCTION The Center for Women’s Business Research, with support from Walmart and the National Women’s Business Council, undertook a study to establish the economic impact of womenowned businesses on the U.S. economy. Women-owned businesses are defined as privatelyheld firms in which women own 51 percent or more of the business. This study provides a clear picture of the value and impact of this segment to the economy and a roadmap for the future. Women-owned businesses are growing at twice the rate of all businesses (1997-2002) and have done so for nearly three decades. It makes good business sense for government and each community to support these firms by providing knowledge, skills and tools for their growth. The research findings reveal that 28.2 percent of all businesses in the United States are owned by women. However, only 4.2 percent of all revenues are generated by women-owned businesses in the United States. One probable explanation is the fact that the majority of these businesses is relatively small and have been In business for a relatively short period of time. This study provides a comprehensive and detailed analysis of the tremendous economic impact of women business owners in the United States. The Center for Women’s Business Research collected survey data from women business owners across the United States. A model of economic activity and interdependencies representing this flow of economic activity in the U.S. provides the direct, indirect and induced impacts. The more detailed data results are shown in tables (1) through (5).

Scope of the Study This research mainly focuses on the economic impact of women-owned businesses on the U.S. economy and is comprised of several components. Specifically the report analyzes three types of economic impacts: 1. Output Effect: A measure of total sales or revenues generated by women business owners in the United States. 2. Income Effect: A measure of total income generated within the U.S. economy by women business owners. 3. Employment Effect: A measure of the number of jobs created in the U.S. economy by women-owned businesses. In addition, the direct, indirect and induced impacts of the above categories are generated by IMPLAN. These effects combine to reflect the total economic impact of the business activity of women-owned businesses.  Direct Impact: The direct output effect represents the purchase of goods and services by women business owners from other businesses in the U.S.  Indirect Impact: The indirect effect represents business-to-business transactions. These transactions occur when the suppliers of the women business owners purchase goods and services from other suppliers in the country. 41


 Induced Impact: The employees of the women business owners and the employees of the indirectly affected businesses purchase goods and services in the United States. These purchases create the second wave of economic impacts commonly known as the induced effect. One additional category of economic data that IMPLAN provides is Value Added. Four components comprise Value Added: • • • •

Employee compensation Proprietors’ income Other property type income Indirect business taxes.

How Women Business Owners Create Jobs and Income The products and services of women business owners create significant economic benefits that reach all industries in the United States. Figure (1) below depicts the circuit of economic activity that begins when WBO products and services are purchased by households or other businesses (G). From those receipts, WBOs make purchases from suppliers (A) and pay wages to their employees (B). Suppliers, in turn, purchase goods and services from their own suppliers (C), and so forth on down the line. During the process, all suppliers pay wages and other income to their employees, owners, etc. (D and E). The households of workers then purchase a full complement of household goods and services (F), as well as becoming customers of women business owners’ products and associated services (G) thus, begin the circuit again. The economic impact model and tables provided within the report address all three levels of impact that generate the total economic impact: The direct economic impact results from spending; The indirect impact follows from the subsequent purchases by the businesses of goods and services from their suppliers and in turn the suppliers to these suppliers; The induced impact refers to the spending by all employees of these inter-related businesses on their household market baskets. The discussion that follows provides an overview of the full economic impact generated by spending for women business owners’ products and services.

Economic Impact of Women-Owned Firms

3

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Figure (1) How Women Business Owners Create Jobs and Income Suppliers

A

(direct supplier to the retail, restaurant, É ) Agriculture Construction Manufacturing Wholesale Retail Transportation Communication Utilities Business Services Personal Services

Payments for Supplies And Services

G Purchase of Goods and Services.

Payments for Supplies and Services

B Wages, Profits, Interest, Rent, etc.

D Wages, Profits, Interest, Rent, etc.

C

(supplier to the direct supplier retail, restaurant, É )

Households/ Businesses

Wages, Profits, Interest, Rent, etc.

E Additional Indirect & Induced Production

Agriculture Construction Manufacturing Wholesale Retail Transportation Communication Utilities Business Services Personal Services

Expenditures by Women Business Owner Customers for Products And Services.

F Purchase of Goods and Services.

These firms produce & make purchases from each other.

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Sample and Model Results The sample used to generate results consists of 417 women business owners who own at least 51 percent of their business. The sample is representative of the larger population of womenowned firms, especially industry sector, revenues, and geography. Both employer and nonemployer firms are included in the sample as well. The direct employment and sales data generated by the 2009 survey of 417 women business owners in the United States provide useful information concerning the size and types of economic inflows created by activities of women business owners. However, there are additional and secondary economic impacts related to these activities. These secondary (multiplier) economic activities occur in the form of the indirect and induced effects that result when the women business owners and their employees use their revenues to buy goods and services from other businesses in the United States. The direct sales and revenues generated by women business owners produce a secondary effect (indirect and induced) throughout the U.S. economy, the sum of which represents the total economic output. The sales and employment data from the women-owned businesses are used in the IMPLAN model to estimate the total output, income and employment effects. These results are shown in table (1) and figures (2) and (3).

Output Effect The 2009 survey of 417 women-owned businesses in the United States shows that the sampled firms were directly responsible for the purchase of $59 million worth of goods and services from other businesses and suppliers. The indirect output effect of $37.4 million represents purchases made by women business owners’ suppliers from other businesses. The induced output effect of $51.4 million represents the amount of goods and services that women-owned businesses’ employees purchased from other vendors in the United States. The total output or sales created in the U.S. economy is estimated to be $147.8 million.

Income Effect The 417 women business owners in the United States directly paid $25.8 million in payroll and benefits to their employees in the form of labor income. This direct income generated $12.9 million worth of indirect income. In addition, the induced income is estimated to be $16.1 million. The total income effect that is the sum of direct, indirect and induced effects is estimated to be $54.8 million.

Employment Effect Women-owned businesses surveyed were directly responsible for creating 612 jobs and indirectly created 249 jobs. The spending of their employees created an additional 363 jobs. In aggregate, 417 women business owners surveyed created 1,224 jobs in the United States.

Table (1) Women Business Owners Survey 2009 IMPLAN Analysis


Labor Income Value Added Output Employment

Direct 25,792,909 35,788,101 58,965,133 612

Economic Impact of Women-Owned Firms

Indirect 12,888,354 20,710,353 37,392,088 249

Induced 16,105,684 27,617,838 51,436,161 363

Total 54,786,947 84,116,292 147,793,382 1,224

5


Figure (2)

Figure (3)

Number

Employment 1,400 1,200 1,000 800 600 400 200 0

Employment

Direct

Indirect

Induced

Total


Impacts

Table (2) and figure (4) below show the industry sectors with the greatest numbers of firms represented.

Table (2) The Most Impacted Industries – Number of Firms

Number of Firms 45 46 32

% 10.8 11.0 7.7

Industry Administrative, support, waste remediation Business services Communication, media

26 36 29 87 56 60

6.2 8.6 7.0 20.9 13.4 14.4

Financial, real estate, insurance Healthcare, social assistance Personal services Professional, scientific, technical services Retail, wholesale Other Figure (4)

Women-Owned Businesses by Industry- 2008

Healthcare, social assistance 8.6%

Professional, Personal Services scientific, technical 7% services Other 20.9% 14.4% Business services 11%

Professional, scientific, technical services

Retail, wholesale 13.4%

Financial, real estate, insurance 6.2%

Administrative, Support, waste remediation 11%

Business services Retail, wholesale Communication, Media Administrative,

Communication, Media 7.7%

Support, waste remediation Financial, real estate, insurance Healthcare, social assistance Other


Personal Services Table (3) and figure (5) show the sample industries that had the highest revenues or output.

Table (3) Industries with Highest Revenues Number of Firms 87 56 46 32 45

% 20.9 13.4 11.0 7.7 10.8

Industry Professional, scientific, technical services Retail, wholesale Business services Communication, media Administrative, support, waste remediation

Revenue $13,278,765 $11,603,235 $5,453,900 $5,433,000 $4,549,152

Figure (5)

National Projections The U.S. Economic Census, Survey of Business Owners provides data regarding the number, size and performance of women-owned businesses throughout the country. The last data


available are for 2002, therefore 2008 data is projected from prior census data. Table (4) below provides these projections.

Table (4) Women Business Owners Projected 2008 National Impact

Number of Firms wo/Employees w/Employees Revenue [$1K] wo/Employees [$1K] w/Employees [$1K] Number of Employees

1997

2002

2008 Projection

5,417,304 4,570,254 846,780

6,489,259 5,572,602 916,657

8,059,635 7,051,473 1,008,162

$818,669,084 $100,905,119 $717,763,965 7,076,081

$939,538,208 $136,686,713 $802,851,495 7,141,369

$1,108,362,219 $196,744,237 $918,373,839 7,220,510

NOTE: 1997 & 2002 data are derived from the U.S. Census; 2008 figures are estimated.

The 2009 survey of 417 U.S. women-owned businesses attained substantial results in each category. We compared our sample size with the size of the entire population of U.S. womenowned businesses [8,059,635] and applied this to the results of the sample analysis. Total labor income for majority-women-owned firms exceeds $1 trillion a year; the value-added totals $1.6 trillion giving us a grand total of nearly $3 trillion in annual economic impact! Furthermore, these firms directly and indirectly employ 23.7 million people! The data in Table (5) reflect the aggregate results.

Table (5) Projected Economic Impact of Majority-Women-Owned Businesses Direct

Indirect

Induced

Total

Labor Income [$B]

498.5

249.1

311.3

1,058.9

Value Added [$B]

691.7

400.3

533.8

1,625.8

Output [$B]

1,139.7

722.7

944.2

2,806.6

7,016,064

23,657,472

Employment

11,828,736 4,812,672

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Conclusions The Center for Women’s Business Research was founded on a belief that women business owners were not being recognized for their contribution to creating and maintaining a healthy and nimble national economy. The Center’s first major piece of research was to document the existence of – and thereby legitimize –larger businesses owned and run by women (previously Census did not collect “C Corp” data by gender). Most of the legislation, programming and women-business-owner advocacy organizations use the work of the Center for Women’s Business Research to provide the rationale for recommendations for programs and policies that support women-owned businesses. It is extremely gratifying that the Center for Women’s Business Research is again at the leading edge of producing data and knowledge that continues to make the world aware of the importance and value-add of women-owned firms. This study provides, for the first time, a comprehensive analysis of the economic impact of women-owned businesses in the United States by using primary data collected through direct surveys and government sources. We’ve never had information that reflected the overall economic impact of women-owned firms. By default, we used total annual revenues which were available from Census. The results of over $2.8 trillion dollars annually from majority-women-owned firms coupled with the more than 23 million people who are employed directly and indirectly by these firms again proves that women-owned firms are not a small, niche market but are a major contributor and player in the overall economy. The data also illustrate the need for new thinking and programming to support women who seek to grow their businesses. Most of the programming now offered through the public sector and much of the private sector is dated and focused on individuals who want to start a business. While these programs are important and meet a need, there are few solid programs that actually generate information and knowledge and engage entrepreneurs – especially women and minorities – to grow their businesses. The programs that do exist have little, if any, evaluative research behind their claims. Furthermore, this research highlights the lack of knowledge currently available on how to grow a business from point A to point B, becoming an employer firm, and moving from being the technical expert to the business leader. Over the past several years, funds for research from public and private sources have been limited and spread across a growing number of scholars and applied researchers. The Center for Women’s Business Research is taking the lead in 2010 by creating an Academic Council of Scholars (ACS) who conduct research in the area of women entrepreneurship and business ownership. The goal of this collaborative effort between the Center and ACS is to build knowledge that can be used directly by women business owners and organizations who support them. This historic initiative demands a public/private infusion of funding.

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Methodology This study provides a comprehensive and detailed example of the full economic impact of women business owners in the United States. The Center for Women’s Business Research, Washington D.C., collected survey data from women business owners across the United States. To qualify for the study, respondents had to be majority women-owned companies. For the proposed study, WBO’s were asked to complete an online survey. The survey contained the following questions: • • • • • • • • • •

Business Name NAICS Industry Code . Year Began Employees Percent Ownership Women/Men Location: City, County, State, Zip Annual Revenues Race/Ethnicity Age Education

Completed surveys were validated through Web sites and other data to assure the business existed and NAICS coding was correct. The sample used for the IMPLAN modeling includes 417 businesses located in 42 different states. Once the data collection was completed, survey data then were organized and coded for analysis and reporting. The survey data on annual sales and employment were used in the IMPLAN model to generate the total economic impact for the sample. The 2008 survey of women-owned businesses in the United States revealed substantial results in output, labor and employment categories.

IMPLAN Model IMPLAN is a PC-based impact analysis software system developed by the Minnesota IMPLAN Group, Inc. It is a complex and highly accurate forecasting model commonly used in economic impact studies to estimate the impacts associated with economic events, interindustry linkages and economic policies. The IMPLAN software system allows the projection of secondary or multiplier effects from changes in direct sales for one industry within a study region. Multipliers can be estimated for a county, a state or for the entire nation. They project changes in sales, income and employment. The total impact of WBOs is defined by three components: direct, indirect and induced impacts. The direct impact results from the total spending by WBOs’ customers. The indirect impact is the sum of inter-industry purchases made in response to the direct sales. The induced impact adds the household spending by employees and owners of all the firms with direct and indirect sales.

The economic impacts reported in this study are based on multiple sources including spending


obtained from the survey conducted by the Center for Women’s Business Research and secondary government data sources. The IMPLAN impact model for this sample of the United States was developed by Jacksonville University’s Davis College of Business. This model is based upon the standard economic input-output technique. The direct economic impact reported in this study will vary from direct customer spending in a subtle but important way. In order to accurately assess the impact of customers, purchases at retail stores must be converted from purchaser to producer prices. This process, called margining, assigns the correct proportion of customers’ expenditures to the manufacturer, transporter, wholesaler and retailer. To understand why this process is needed, remember that retailers provide a service. They purchase final goods from wholesalers to sell to consumers. Wholesalers similarly provide a service of distributing a final product from the manufacturer to the retailer. Assigning the entire purchase to the retail industry would exaggerate the performance of the retail sector and underestimate the importance of the wholesale and manufacturing sectors.

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References IMPLAN Professional. (2004). IMPLAN Professional Version 2.0. Social Accounting and Economic Impact Software, Analysis Guide, Stillwater, Minnesota, February, 2004. Minnesota IMPLAN Group, Inc. IMPLAN Professional (2004), Version 2.0 Social Accounting and Economic Analysis Software, Data Guide, Stillwater, Minnesota, February 2004. Minnesota IMPLAN Group, Inc. Introduction to IMPLAN. IMPLAN Pro. Stillwater, Minnesota. Minnesota IMPLAN Group, Inc. IMPLAN Professional. (2004), Version 2.0 Social Accounting and Economic Analysis Software, User Guide, Stillwater, Minnesota, February 2004. Minnesota IMPLAN Group, Inc. The Economic Impact of Women-Owned Businesses in the Greater Jacksonville Area, H. Pordeli, PhD, Jacksonville University, and G. McClung, PhD, Waynesburg University. U.S. Census Bureau. (n.d.). 1997 Economic Census Minority- and Women-Owned Businesses. Retrieved September, 2007, from http://www.census.gov/epcd/mwb97/fl/FL.html U.S. Census Bureau.(2006). 2002 Economic Census, Survey of Business Owners (SBO). Characteristics of Businesses (CB). Retrieved September 2007 from http://www.census.gov/csd/sbo/characteristics2002.htm U.S. Census Bureau. (2006). 2002 Survey of Business Owners (SBO). Characteristics of Business Owners (CBO) .Retrieved September 2007 from http://www.census.gov/csd/sbo/characteristics2002.htm U.S. Census Bureau. (2006). 2002 Survey of Business Owners(SBO). Company Summary 2002. Retrieved September 2007 from http://www.census.gov/csd/sbo/company2002.ht m U.S. Census Bureau. (2006). Women-Owned Firms: 2002 .2002 Economic Census Survey .Retrieved October 2007 from http://www.census.gov/prod/ec02/sb0200cswmnt.pdf

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