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VOL. 41 | NO. 29 | Friday, July 21, 2017

Pathway helps women find road to success

By Joe Morris

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Bunton

Sisters may be doing it for themselves, but a little help along the way never hurt anybody.

In Nashville, women entrepreneurs have benefited from the Pathway Women’s Business Center, which was opened by Pathway Lending after Nashville was chosen in 2014 by the U.S. Small Business Administration as one of six locations nationwide for a women’s business center.

In the two years since, the Pathway center has pursued an aggressive agenda of consulting, mentoring, training, peer-to-peer learning and more, all designed to help women start and succeed as entrepreneurs in any and all business sectors.

Over the last year, Pathway’s annual report states, the center served 991 unique clients and provided more than 5,600 hours of coaching and advisory services. From accessing capital to the fundamentals of business operation, no subject was overlooked, says Amy Bunton, president, who spoke with the Nashville Ledger about the Middle Tennessee entrepreneurial landscape as it applies to women:

How is the entrepreneurial scene in Middle Tennessee different for women now than it was 10 years ago? What are some major trends and shifts?

“It’s two words: growth and diversity. More women are starting and growing businesses now than ever before. At the national level over the past 10 years, the number of women-owned firms has grown by 45 percent as compared to just a 9 percent increase among small businesses in general. That’s five times faster than the national average.

“Tennessee has outpaced this growth and has seen a 53 percent increase according to the 2016 American Express OPEN Study. We are seeing this trend in the WBC. Just last year we helped 45 new businesses to launch.

“According to the same study, African-American women are starting businesses at a pace faster than any other group – six times the national average. We’re seeing that group heavily represented in the clients we serve, with 38 percent of the entrepreneurs we served in 2016 identifying as African-American.’’

You have talked about the rise of service businesses, such as boutiques, day cares, etc. Will these top out in terms of female-entrepreneur interest any time soon, or are they pretty evergreen?

“I don’t see these service businesses topping out any time soon for several reasons.

“First, women entrepreneurs still seek businesses and industries with lower cost barriers to entry because we tend to be risk-averse and tend to have smaller amounts of capital with which to start a company. It’s not common for women to launch manufacturing firms or buy an existing business.

“At Pathway WBC we want to encourage women to look at all their options, including the huge opportunities for women in government or sub-contracting.

“With Nashville in the midst of a building boom – with the airport redevelopment, the Yards and River North Projects – there are big opportunities in many areas for women-owned businesses to capture contracts if they can successfully bid and do the work. Our mission is to help them prepare for this growth.

“The conditions are right for women to not only grow service-based businesses, but also look to diversify their opportunities by thinking about non-traditional industries for women like construction, automotive, transportation and logistics, where women-owned firms are more likely to enjoy the same levels of employment, revenue and profitability as male-owned businesses.

“The American Express OPEN Study looks at these factors every year and the term they use for the combination of these factors is “economic clout.” When a firm reaches the point of economic clout, entrepreneurs can start finding economic empowerment not only for themselves but for their community. That’s where my heart is each day in our work at Pathway WBC.

“Second, some women look to entrepreneurship as a “second career” or when they reach a personal crossroads where they have to create a “necessity business.”

“Necessity businesses pop up when women need more flexibility in their personal lives to care for others or when they are facing positions of underemployment. At these points, they build upon their personal business experience, and often this has been in areas such as healthcare service provider, food industry, insurance and consulting. You can see how this supports the growth of service businesses.

“Third, in Nashville our local trends keep pointing to a continued demand for service-based businesses. We are enjoying population growth – the famous 100 people moving to Nashville a day phenomenon –and we are seeing the convergence of aging Baby Boomers and growth in Millennials with both sectors creating higher demands for service-based businesses. We need these service businesses to support our growing community.’’

Lots has been written about the lack of women-run companies in the tech sector in areas like Silicon Valley, and to a certain degree in Nashville. How much of a problem is that?

“I’m encouraged by what Nashville is experiencing related to growth for women in the tech sector, and I want to see us accelerate this momentum in an incremental way. Pathway WBC has been fortunate to partner with organizations like Women in Technology of Tennessee to work on this challenge. In May of this year we held our second “Tech Academy” in partnership with WiTT and focused on building women’s leadership and skills in tech and business.

“Nashville has some great women-run and started companies in the tech space, like Mixtroz, which is owned by a dynamic African American mother-daughter team, or Apto Global and Virsys 12. When firms like these grow, and make investments, Nashville benefits and that’s good for everyone.’’

What is the lending landscape for woman-owned startups now compared to a few years ago? Women used to have a tougher time getting loans, or at least that was the perception – is that still the case?

“We see the landscape as positive for women-owned start-ups. There are more resources than ever for women to attract capital for their businesses. What we try to help women understand is what type of funding is best for their business – equity, debt, personal investment, etc. – and the answer should be different depending on the vision for their company.

“Platforms like iFundWomen are coming into the market, traditional lenders are looking for ways to grow their portfolios and alternative lenders like Community Development Financial Institutions, like Pathway Lending are reaching out to women business owners to help them grow. In 2016, 36 percent (41 of 114 businesses) of all of Pathway’s loans were to women-owned firms.

“We’ve also got to remember that for loans of any type, the “5 C’s of credit” [character, capacity, capital, collateral and conditions] apply for funding to be a good business decision for all concerned. At Pathway, we use a 6th C which is “coachability,” because we’ve found it really helps bolster a business’s chances for success.

“Women are typically highly coachable, so we encourage all of the ladies we work with to educate and prepare themselves before pursuing funding for a startup and make sure they are starting with a sound business model and realistic projections.

What advice do you have for women who are looking to start a business, whether because they want to be their own boss, or to monetize a passion?

“My counsel would be to start with the end goal of your business in mind, and work to create a realistic business model with the capacity to be profitable enough to meet your personal goals.

“The second piece of advice is to not lose sight of how important understanding the financial aspects of your business will be. Professional passions are great – but without the financial reward it is hobby and not a sustainable business.

“Pathway WBC was created to be this resource for women entrepreneurs. We help women business owners with companies of all stages evaluate their business ideals models, and then use our expertise and resources to maximize success and future opportunity. This knowledge we offer comes from many years of working with small business owners – seeing both the mistakes and the successes.

“In 2016, Pathway WBC worked with nearly 1,000 entrepreneurs and provided 5,600 hours of assistance of training and technical assistance. We launched our new cohort model in 2017 to deepen the support system around our entrepreneurs, and we aren’t slowing down anytime soon.’’

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