While the number of women-owned businesses has increased exponentially over the past decade, we're not raising venture capital to grow our businesses.

What is venture capital, and why should it be on your radar?
Venture capital (VC) is a type of funding designed to help small companies become big companies; it's usually hitched to some form of "exit strategy," such as sale to a larger company. A business owner seeking traditional venture capital has to show the potential for rapid growth and extraordinary returns.

Consider this: “In 2006, only 4% of venture capital-backed companies had female chief executives, and those companies with women as leaders received just 3% of the total dollars raised from VC.” (source)



Just 4%? Why?

1. Women aren't starting “VC-worthy” companies projecting rapid growth
   and exit strategies. We want to run small
   companies, and avoid the headaches
   of leading large ones.
   
   
2. We're so resourceful and skilled when it comes to
   bootstrapping that we think we don't need VC.
   
   
3. We struggle, more than men, when it comes
   to asking for money.
   

Is this yet another glaring example of under-earning, or merely a reality in the innate difference between men and women?

We need to build networks
According to Amanda Clayman, a psychotherapist specializing in financial wellness, women are still limited by "trying to do it ourselves" and lack networks needed to grow our businesses. "Women, for the most part, still operate outside of the traditional power structure. It's time we direct more energy toward establishing our own power networks. In order to grow, we need to learn how to ask for resources, support — and investment — when we need it."

Please share your opinion below.

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LLCs, or Limited Liability Companies, are relative newbies to the business structure world, but they’re all the rage. Key among them is the limited liability. An LLC’s members (think of them as shareholders) are not personally liable for the business if it goes belly up. In addition, members pay taxes only once — on their earnings — rather than ponying up twice (corporate and individual taxes), which is what happens in a regular (C) corporation. And when tax time does come around, filing is easy if you’re an LLC. If you’re the only member, just follow a Schedule C with a 1040 form. If there are two or more members, the LLC files Form 1065 (an information return) with the IRS, and the members then report their share of income and deductions on their personal returns.

And the downsides: You'll have to cough up income taxes on your profits, and you’ll also have to pay self-employment tax to cover both the employer and employee share of Social Security and Medicare taxes on your net earnings. In other words, make money, and you’ll pay for it. The other hitch is that since LLCs are relatively new, how they’re taxed at the state level can vary from state to state.

 

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Barbara Weltman has been a tax and business attorney since 1977. Browse her list of published books, including J.K. Lasser’s Guide for Tough Times: Tax and Financial Solutions to See You Through and The Complete Idiot’s Guide To Starting a Home-Based Business. If you're starting or running a small business, you may want to sign up for her Idea of the Day (sm). Like DailyWorth, they're concisely written business and tax tips for the busy entrepreneur.

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I have two kids and run two businesses. My kids are a 7-month-old girl and a 3-year-old boy. My first business, a Web consultancy called Soapbxx, will gross $300,000 in 2009 and employs eight people. The second company, an online finance publication for women called DailyWorth (this website), requires a team of four part-time contractors to operate.

The best news? I'm not mad. I have plenty of time to be with my kids. I even manage to find time to have a leisurely lunch or extended "me" time.

Here's how I do it:

7am: Our baby girl wakes all of us up.
8am: We're downstairs, dressed, eating breakfast and packing lunches.
9am: My baby is cared for by a nanny. This nanny shows up at 9am and I hand my baby girl off. My 3-year-old goes to preschool. My husband always takes him to preschool. Bottom line: even if we're running late, I depart for my home office (top floor of our house) at 9am sharp. This is critical to me. 9am. Work.
9am-11am: After I clean out my inbox, I focus on DailyWorth, my finance blog for women. We send out a daily email, and this requires about two hours of my day to orchestrate.

11am-4:00pm: I focus on Soapbxx, my web consultancy. The tasks I concern myself with include:


I don't worry about Soapbxx's internal performance or quality because I've learned over the years how to hire only the best people. My team is exceptional and as a result, I don't have to micro-manage them or worry much. This did not happen by accident. I have 10 years practice hiring and firing. I've employed or contracted to 40 people over the last few years and only a select few remain.

4:00pm. I shut down my computer, scoop up my daughter, and drive to pick up my son from preschool. It feels incredible to me that I can run two companies and finish my workday by 4:00. Having been raised by a single mom who was forced into a strict 9-6 corporate work environment, I vowed to set up a life where I could be there for my kids more than my mom was for me. I don't blame my mom for her absence -- she did what she had to do to earn what she needed to earn in the 1980s. But I hated that she couldn't drive me to school, or be there for me after school. I'm structuring my life so that I can run my businesses and be there for my kids before and after school. In 2009, working moms can have it all if we plan properly.

4:00pm - 9pm. Family time! We run errands (Target, anyone?), make dinner, take baths, read books and every other bedtime ritual that makes having kids so special.

9pm - 11pm. Here's the part of my life that isn't so ideal. I generally boot up my Mac and do more work at 9pm. I know my husband would rather that I curl up on the sofa and watch True Blood with him. Sounds dreamy, really. But the truth is, these days I feel pulled to run through emails that came in from 3:30 - 7pm (there are often many) and finish tasks I wasn't able to finish during the day. I look forward to a day when I can stop work at 3:30pm and not resume until 9am the next day. Until my babies and businesses are more self-sufficient and systematized, it's a sacrifice I'm making, and hope that my husband realizes it's temporary.

11pm. Bed.

The keys to my operation:

1. I delegate a lot to very precocious people. I have a very responsible, motivated assistant. Without her, I'd be mad. She loves having her hands in everything from accounting to project management, and I love her for it. If she chooses to leave me (which she will some day), I'll have a very hard time replacing her.
2. I'm obsessed with cash flow and work with a great bookkeeper/accounting team. For Soapbxx to operate, we need to deposit $25,000 into our bank account every month. I plan quarterly and manage daily when and from whom checks will arrive. My bookkeeper claims I'm one of the best cash collectors she's ever worked with, and I'm proud to have mastered the science of receivables. Just last month, I got our receivables down to $0.
   
3. Once a month, I'll stay up until 4am if need be to push through things I owe. Sometimes, you just have to.

Does my story seem impossible to you? You have to take into consideration my manic, tightly-wound character. I'm more work-obsessed than your average mom. I love my companies and have very ambitious financial goals for myself (tens of millions, thank you). I don't exercise. I'm generally not eating proper lunches (note above: no lunch break). I do experience exhaustion. I wish I had more time to just be with my husband. For now, I'm satisfied with my structure and recommend it to my power mom friends.

Check out Soapbxx.

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Meetings, schedules, long hours and the inflexible thirty-minute lunch ... is it time to change the status quo? If your structured workplace is stifling creativity and hampering productivity, here's an idea: Talk to your colleagues about embracing a Results-Only Work Environment.

Great results occur when an company is flexible and supportive of its employees, not when people have to punch the clock or put in face time to keep management happy. Go for results instead. Get the work done, and meet your deadlines; how, when and where you do that is up to you.

If you want to learn more about the ROWE movement, check out Why Work Sucks and How to Fix It. Written by Cali Ressler and Jody Thompson, consultants, professional speakers and founders of CultureRX, this book looks at why our work environments have become so dysfunctional and “offers a dramatic new way to stop the toxic behaviors and beliefs that keep us from reaching our potential.”

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Last week I scored a drool-worthy sales meeting for my Web consulting company. Winning this contract would add a blue-chip client to our roster and serious inflation to our bank account.

The night before the meeting, I was anxious. What should I wear? To sales meetings, I usually wear nice slacks, an elegant shirt and heels. This prospect, of dot-com fame,  was more likely to be casual, so perhaps jeans would be better. I texted a trusted male colleague to get his opinion.

Me: What should I wear? Tight jeans, hipster shirt + flipflops? Or dressy pants, fem shirt, heels?

Male colleague: Tight jeans.

That's it. Two words. "Tight Jeans." OK, I get it. Point taken. My ass sells. Five years ago, that wouldn't have been the case (see my earlier post on weight loss). I remember being harassed at a night club on 14th street in New York City for having a very large butt, and we're not talking J Lo butt. I was depressed about it for weeks. I'm currently and have been for about four years, quite slender, but the psyche of "fat girl" still follows me around.

So my web consultancy means a lot to me, and its income feeds many families in the U.S. and abroad. I enjoy selling large, high-dollar deals that allow me to pay myself and my deserving team of hard-working web producers well. So, if wearing tight jeans helps sell deals, why shouldn't I? I'm sure my mother read me feminist rants as bedtime stories, but I love putting on my size 6 jeans. And if that helps me beat out the competition, I'd really prefer to suppress my inner Gloria Steinem, thank you.

What struck me even more than my colleague's curt reply was the willingness and ease with which I climbed into my skinny jeans the following day. I strutted my little tush past my husband, looking for a compliment, which he willingly bestowed. See, my thinness is definitely a source of pride, revenge on that jerk who called me "fat" in a bar oh so many moons ago, and something I work hard to maintain. It does give me power, I feel worthy of more attention (as twisted as that is), and I get it.

In the end, my prospective client showed up in a classic Brooks Brothers suit and I sorely regretted my choice of clothing. I still don't know if I won this particular contract. Regardless, I think my brain power overall was the selling point, not my clothing, and I don't think I'll be wearing jeans to a meeting like this again.

Talk about it on Twitter

Please use the Twitter hashtag "#DailyWorth" after any tweet.

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Network. Walk into an event or a lunch ready to rub elbows, shake hands, introduce yourself, exchange information. Opportunities are everywhere. Be ready to recognize and seize them. It means putting yourself out there to fail - or, more likely, succeed.

These days, networking can happen from your desk using services like ReadyTalk. Yes, face-to-face is better, but that's not always possible with kids, work and, that horrible recession we keep hearing about. Teleconferencing, as it's called, gets more sophisticated by the day. Do have your own blog, run an online store, or are you interested starting a new company? Check out the Women Who Tech Teleconference on May 12th (http://www.womenwhotech.com). Speakers include Charlene Li, co-author of the business bestseller, "Groundswell: Winning In A World Transformed By Social Technologies," Rashmi Sinha of SlideShare, and Lisa Stone of BlogHer. (Note: DailyWorth founder Amanda Steinberg, CEO of Soapbxx, is moderating the 11:00 am panel called "Women and Open Source.")

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In a recent conversation with my colleague Alice Hendricks, I learned that her business, Jackson River, earns far more than you'd expect from a 2-year-old consultancy (She asked me not to share numbers, so you have to take my word for it, but she's earning like a rock star.). How, you might ask? Her bottom line: efficiency.

Amanda: Your revenue blows past ordinary growth curves. How did you do it?

Ms. Hendricks: Our model is to charge only for services. Our philosophy is that clients should not spend a lot of money on consultants and when they do, it should be really necessary and specifically valuable. Although this seems contrary to achieving high revenues, I am convinced that it is the abundance principle in action. We approach our work with honesty and transparency. We keep our hourly rate low so we are affordable and keep a very tight rein on scope. Also, we are picky about our projects and only take ones that we feel will be successful.

Amanda: That's a great answer, but I'm not sure it explains your revenue success. Companies that earn ¼ of what you do could say the same thing.

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