Women Entrepreneurs Tackle Business Challenges

Some of the biggest issues affecting women business owners include the credit crunch, health-insurance costs and the challenge of winning more government contracts.

In the past year, tighter lending standards have made it more difficult for entrepreneurs to

obtain capital to start or expand a business. "With the credit crunch, women are having a problem getting a small-business loan," says Diane Turton, president of Diane Turton Realtors in Point Pleasant Beach, New Jersey. "Whereas two years ago, you could go to the bank and not have to pledge anything to get a loan for a business."

She adds that banks are now very reluctant to underwrite a loan unless the business owner has collateral. Without collateral, an entrepreneur will likely be rejected for a loan and will need to turn to private funds or other financial sources to support a new or growing business. "The money isn't available like it used to be," says Turton.

Meanwhile, obtaining more state contracts continues to be a major concern for women business owners. "Women and minorities in New Jersey are not getting their fair share of the contracts," says Paula Gould, executive director of the New Jersey Association of Women Business Owners (NJAWBO) in West Windsor.

Majority wo men-owned firms, or those that are at least 51 percent owned by women, made up 28 percent of small businesses in the state in 2006, according to the Office of the Governor. However, only 3 percent of businesses that were awarded state contracts that year were owned by minorities and women, and such firms received less than 2 percent of the more than $2 billion that New Jersey spent in 2006 to purchase goods and services, the Office of the Governor said.

Last year, Gov. Jon Corzine tackled the issue by signing an executive order that established a Division of Minority and Women Business Development within the Office of Economic Growth for the purpose of increasing the number of state contracts that go to women- and minority-owned businesses.

But Gould fears the order could easily be reversed once Corzine leaves office. She says NJAWBO has worked with Assemblyman John McKeon (D-Essex) to reinstate and amend legislation that was adopted in 1984 to set aside contracts for minority- and women-owned businesses but was revoked by Gov. James McGreevey in 2003. "It's important to assure that the bill that is passed is legal and will not be overturned by the courts," she says.

The rising cost of health care is another challenge for the state's women entrepreneurs, as with other small-business owners. Because the state mandates a very broad range of health benefits, many insurance companies are either unwilling to do business in New Jersey because of the lack of profitability, or charge high premiums for coverage, says Gould. Such premiums are often too much for many small women-owned firms to bear, she explains. "You just can't attract employees and retain employees if you don't have a health care/benefits program, even for a one- or two-person shop," she says.