Access to markets: landmark study reveals opportunities and obstacles for women business owners...

A first-ever study released earlier this year examines the track record of women's business enterprises seeking entry to corporate markets. While women's business enterprises are earning a significant percentage of their revenues from Fortune 1000 corporations, the study finds that these women's

These findings are from a new study, Access to Markets: Perspectives from Large Corporations and Women's Business Enterprises, conducted by Center for Women's Business Research and commissioned by the Women's Business Enterprise National Council (WBENC), Women Entrepreneurs' Connection at FleetBoston Financial and the Ewing Marion Kauffman Foundation. The study surveyed third-party certified women's business enterprises and Fortune 1000 purchasing executives.

"The importance of this market for women entrepreneurs is irrefutable," said Susan Bari, president of Women's Business Enterprise National Council. "Fifty-six percent (56%) of the revenues of women's business enterprises with $1 million of more in sales came from large corporations, and 40% of the revenues of companies with revenues below $1 million. Clearly, women business owners, regardless of the size of their firm, should not overlook the corporate market place."

While showing that many women are successfully selling to large corporations, the study also found that many challenges still remain. The top challenges cited by women entrepreneurs include: learning about opportunities (70%), reduction in the number of opportunities due to the bundling of smaller contracts into fewer large contracts 130'74,L and the increasing need for corporate cost cutting (45%).

The challenges cited by corporations with supplier diversity programs mirror those of the women seeking to sell to them. Fully 86% of corporate purchasing executives interviewed say that the push to cut costs is having an impact on purchasing and diversity efforts and 81% cite vendor consolidation. In addition, an average of just 38% of each corporation's spending is up for renewal or rebidding each year, decreasing opportunities for new vendors even more. Bundled contracts result in fewer contracts available for bidding.

Due to the growing practice of bundling con tracts, many large corporations (79%) report extending their diversity efforts into working with 1 st--tier suppliers to increase supplier diversity among 2 nd--tier contractors. Sixty-one percent (61%) report that they measure the use of women and minority business enterprise suppliers by 1 st -tier contractors. Yet, only 20% of the women business owners in the study reported that when their bid for a 1 st--tier contract was not successful that supplier diversity personnel put them in touch with the 1 st -tier supplier for a 2 nd--tier opportunity.

Despite this, the share of women's business enterprises with 2 nd--tier contracts has grown from 18% to 22% while the share with 1 st tier contracts has declined from 80% to 74% over the past three years.

"Women business owners are using a variety of strategies to counter these corporate realities," said Teri Cavanagh, senior rice president and director of the Women Entrepreneurs' Connection at FleetBoston Financial. "Nearly half the women surveyed (45%) report that they have formed a joint venture or strategic alliance to bid on an opportunity with a large corporation."

Women who were successful in obtaining corporate contracts have formed relationships inside the corporations as well. Ninety-seven percent (97%) of women entrepreneur respondents rated relationships with decision makers as a key success factor in doing business with large corporations; 70% cited relationships with purchasing personnel or end users; and 66% named relationships with other suppliers.

Large corporations with strong supplier diversity efforts in place say that doing business with women and minorities is a matter of good business practice. Forty-three percent (43%) of companies that rated themselves as having a good supplier diversity program say that their company's rationale for doing business with women--and minority-owned enterprises is that these firms offer competitive prices and quality products and services. Corporations that do not give, their diversity programs high marks are more likely to say that their company's rationale is that the changing demographics of the U.S. indicate that women and minorities an increasingly important (56%).

There is a range of practices utilized by corporate supplier diversity programs. Almost all (95%) of the corporations with strong programs have a list of database of women and minority enterprise suppliers available lo all company buyers, 80% of these companies have active CEO involvement in setting and communicating policies and goals, and 69% have a specific written goals for women business enterprise purchasing.

When asked what corporations can do to facilitate women's business enterprises doing business with large corporations, the women surveyed listed having names of contacts (9%), having corporations which actually want to haw, women-owned suppliers (8%), networking opportunities (8%), getting face-to-face meetings (8%), training on how to navigate the process (7%), notification of opportunities (7%) and referrals and introductions (6%).

"Despite the challenges facing them, women entrepreneurs are very optimistic about the corporate market," said Jasmin Rodriguez, manager of women's entrepreneurship initiatives at the Ewing Marion Kauffman Foundation. "Fully nine in ten (91%) of the women business owners surveyed, both those currently marketing to Fortune 1000 companies and those who are not, expect to be doing business with large corporations over the next three to five years."

Information provided by the Center for Women's Business Research.