Azmina Shamji-Kanji
Merrill Lynch client, Azmina Shamji-Kanji invested the profits from her first business to start more.

Women overcome financial hurdles to start businesses at twice the rate of men. How they do it offers lessons for all aspiring entrepreneurs. They are owning their own success.

The list of successful companies started by women includes many iconic brands—from Chanel to Learning Express, MinuteClinic to Zipcar. Network hardware giant Cisco and photo-sharing site Flickr were co-founded by women.

All successful entrepreneurs, no matter what their gender, are risk-takers, driven by a desire to innovate and, in the process, create wealth for themselves and jobs for others. For women, the motivation to go out on their own may also include the desire to circumvent the glass ceiling. Or they may see entrepreneurship as the best path back to professional life after years spent raising their families.

Whatever their reasons, more and more women are defying tough odds—more than 50% of startups fail in the first five years, according to the Small Business Administration. They’re taking this uphill path despite the fact that they often face greater challenges than men do: Women have fewer mentors and role models to coach and guide them, and they frequently must juggle work and family responsibilities.

More important, women can have a difficult time securing funding. They are also less apt than men are to ask for seed capital, which may help to explain why only 7% of the U.S.-based companies that received venture capital in 2010 were founded by women, according to Dow Jones VentureSource.

Yet despite these hurdles, the number of businesses owned by women grew by 44%—or twice the growth rate of male-owned companies—from 1997 through 2007, according to the U.S. Census Bureau. Today, women own almost a third of privately held companies, and one in five firms with revenue of at least $1 million was started by a woman, according to the National Women’s Business Council (NWBC). What’s more, women-owned firms with up to $1 million in revenue beat the national average for all firms when it comes to revenue growth, says the NWBC.

Leveling the Playing Field

Helping today’s women entrepreneurs overcome the challenges they can face are the many women who came before them. As more successful businesswomen become investors themselves, they’re taking other women entrepreneurs under their wing. “Women are very good at building sustainable businesses if they have access to financing and get to compete on a level playing field,” says Kay Koplovitz, chief executive of Koplovitz & Co., a media advisory and investment firm specializing in marketing and growth strategies for young companies.

Stage Photo

Koplovitz is a co-founder of Springboard Enterprises, a nonprofit that mentors, trains and showcases women entrepreneurs seeking capital. Of the 537 companies that Springboard helped to secure funding since 2000, more than 80% are still in business, and a third have been sold at a profit.

“That is so far in excess of national averages,” says Koplovitz. “When a venture capital firm invests in 10 companies, it hopes to hit one home run and have five companies perform fairly well, with the other four going out of business.”

Koplovitz credits the success rate of these women’s businesses in part to the mentoring and support the entrepreneurs have received. “Women need a supporting human and financial capital network behind them—something that men have enjoyed for a long time,” she says. She also points to the fact that many women entrepreneurs are primed to succeed. “Women in growth businesses often have 10 to 20 years of experience in their fields before they launch their own companies, so they are very adept at bringing new products to market.”


Amanda Steinberg, founder of the online women’s finance site Daily Worth, says women’s ability to multitask gives them a distinct edge. “I know countless women who have launched businesses while holding down full-time jobs and raising kids,” says Steinberg. That juggling act requires women “to be exceptional at delegating and team-building,” she says. “If you try to do everything yourself, your business will never grow.” Steinberg herself raised close to $1 million in venture and angel capital for Daily Worth “with a newborn in my arms.” She parlayed her own $25,000 investment in Daily Worth into the multimillion-dollar financial media company it is today.

Two Women Share Lessons Learned

For most women, having a financial safety net is key. It’s what allows them to feel comfortable with the risks they are taking. When Ena Love left Atlanta for Los Angeles after the end of a 25-year marriage, she was looking for a new start and fresh challenges. She wanted to channel the experience she’d gained while helping to grow her former husband’s telecommunications firm into two businesses of her own. Her plans, to create a record label and to become a partner in a high-end fashion boutique, promised all of that and more. Yet she also knew she couldn’t allow those new ventures to put her other financial goals in jeopardy.

With three teenage children only a few years from college, Love worked with her Merrill Lynch financial advisor, Mary Ellen Garrett, to determine how much of her wealth she might safely risk. They stress-tested her portfolio using a worst-case scenario: that both businesses would fail. “Ena wanted to ensure that her current assets would keep her secure for the rest of her life, so the amount she invested in her companies had to be a sum she could lose,” Garrett says. “Having a can-do attitude is vital too,” acknowledges Love. Her motto: “Never give up.”

That necessary balance—between the willingness to take a risk and the desire to preserve a solid financial base—has also guided Azmina Shamji-Kanji, an experienced entrepreneur who has launched one successful business after another, from daycare centers and corporate training centers to outpatient rehabilitation clinics. Starting each new business required tremendous drive and a huge investment of her time. “Being an entrepreneur is a 24/7 job, so you have to be prepared to work extremely hard,” Shamji- Kanji says. “And you have to be passionate about the work itself, because there may be times when you don’t have a paycheck. Passion and enthusiasm also help you more easily sell your product or service,” she points out.

Risk Reward

Through it all, Shamji-Kanji has been careful to minimize investment risks and maintain ample personal liquidity—objectives that Nadia Allaudin, her Merrill Lynch financial advisor, has helped her achieve. “My goal is to allow Azmina to concentrate on her businesses without having to spend a lot of time focusing on her investments,” Allaudin explains.



Finding the Funding

Aspiring entrepreneurs hoping to join their ranks could learn from this cautious financial approach. “Entrepreneurs frequently are somewhat optimistic about financial projections,” notes Jonathan Dowst, small business credit products executive for Bank of America. You need to be prepared to operate at a loss for a while, and it’s important to verify every assumption. Can you actually rent an adequate space for $1,000 a month? Have you double-checked your product cost estimates? “Only when you get clear answers to such questions can you begin to consider your funding options,” he says. And that means writing a business plan.

While both men and women tend to rely on personal or family savings as the primary initial source of funding for their business startups, women tend to rely more heavily on personal or business credit card use, according to the National Women’s Business Council. That can be risky, because it automatically commits you to inflexible monthly payments that can limit how much you can invest in building your business.

Business Plan

For help mapping out her business strategy, Love turned to Garrett. At Garrett’s urging, Love scaled back the amount of money she planned to put into the boutique so that she would have sufficient capital to make an investment in her true passion—the music business.

Love self-financed her businesses, but she was able to avoid liquidating investments by using her portfolio as collateral for a line of credit obtained through a Loan Management Account® offered by Bank of America. “Essentially, Ena is borrowing from herself and can pay herself back when her businesses start making a profit— not according to a fixed repayment schedule,” Garrett says. Although securities-based lending poses certain risks, it can also help Love avoid derailing her long-term investment strategy to meet her capital needs.

For serial entrepreneurs such as Shamji-Kanji, the success of one company often can be leveraged into startup funding for the next. After she emigrated from East Africa to the U.S. in the 1980s, her first businesses were day-care centers run from three homes, which she started and self-funded when her first child was born.

Next, in 1989, Shamji-Kanji bought a corporate training company, using money she’d saved from the day-care business, as well as her husband’s pharmacy and a loan from the Small Business Administration. After steadily expanding that company’s offerings, she sold it in 2001 for five times its original purchase price. Four years later, she bought a struggling outpatient rehabilitation clinic— a venture that she and a business partner have expanded to include four clinics in California and three in Washington state that provide therapy for elderly patients with respiratory conditions or physical therapy needs.

Taking the clinics to profitability required excellent customer service, effective marketing, well-controlled overhead and robust accounts-receivable collections, according to Shamji-Kanji. But her biggest challenge, she says, was creating that “perfect team—finding people who work as long and hard as I do.”


Solutions for Your Business
Running a small-to medium-sized business can offer a lot of opportunities—and challenges. A Financial Advisor can introduce you to solutions designed to help ease the day-to-day cash management and credit needs of your business.

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Bank of America Fall 2013 Small Business Owner Report
A semi-annual study that uncovers the concerns, aspirations and perspectives of small business owners across the country.

Starting or Selling a Business

Growing Pains

As hard as it can be for women to find startup capital, attracting investment to help the business grow can be equally challenging. Women are less likely than men to seek money for expansion, according to the National Women’s Business Council. And when they do seek funding, just 8.7% of women-owned firms are able to obtain a business loan from a bank or financial institution, compared with 18.8% of men-owned firms that get such assistance, says the Council.


Venture capital is another way to go, Koplovitz points out, and one that women also turn to less often than men do. While venture capitalists won’t consider funding a new company that lacks a solid customer base and revenue stream, angel investors—an increasing number of whom are women—are often willing to take the risk that a startup will be successful. In addition to Springboard Enterprises, Plum Alley, Golden Seeds and several other companies now give women entrepreneurs boot camp training and exposure to potential investors.

Self-funding expansion can be a quicker growth strategy, however. To satisfy Shamji-Kanji’s need for quick access to capital when she wants to invest in a new business or needs to cover expenses in her clinics, Allaudin helped her set up a Loan Management Account®. Whenever Shamji-Kanji is considering buying another business or a parcel of real estate to expand her assets, she and Allaudin first discuss the cash flow needs of the new venture and how it will affect her family’s overall net worth.

Crowdfunding, which pools financing from many small investors, typically online, could soon add a new, more accessible way for women entrepreneurs to raise capital. This year, the Securities and Exchange Commission eliminated a rule that prohibited entrepreneurs from promoting their fund-raising on social media, and a provision of the federal JOBS Act, passed in 2012, will allow entrepreneurs to raise startup money from any willing investor— rather than just from “accredited” high-net-worth individuals. “Crowdfunding democratizes access to capital by bringing millions of potential investors into the fold,” says Daily Worth’s Steinberg, and that could benefit women.

Cash Flow & Other Priorities

Financing aside, running a business means staying on top of wide ranging business priorities. As a busy entrepreneur, Shamji-Kanji needed help managing important details, such as protecting her businesses from liability and minimizing taxes. “Azmina moves at 100 miles an hour, and we had to encourage her to focus on creating a solid business foundation,” says Allaudin. “We suggested that she make sure the real estate she owns was properly titled, that the businesses were converted to limited liability corporations and that she consult tax specialists to help her ease the tax burden on her assets.” When she needed a new CPA. Allaudin helped her interview candidates.

To help Love manage similar important day-to-day details, Garrett introduced her to an accountant and a lawyer, with whom she reviews Love’s contracts. Garrett also checks Love’s monthly expenses against projections to keep her finances on track. And she acts as a reality check, making sure Love’s gut instincts are supported by sound business practices.

Cash Flow

One major ongoing challenge for small businesses is managing cash flow. Nearly half of female business owners cited not being paid on time as their biggest impediment to cash flow, according to Bank of America’s 2013 Small Business Owner Report. Both Garrett and Allaudin have access to Bank of America’s network of 1,000 small business bankers around the country—40% of them women—who can help their clients meet their cash management challenges and obtain business loans.

“Women bankers, many of whom have run their own small businesses, understand the unique needs of women entrepreneurs and their daily financial demands,” says Anna Colton, national sales executive for Bank of America’s small business bankers. “Helping a small business owner with a cash management strategy specific to her needs enables her to do more with the resources she has.” Colton notes that a small business banker can also help accelerate collections with online invoicing, for example, and establish flexible electronic payments to vendors.

The Right Balance

Keeping their companies going is twice as stressful as keeping a relationship with a spouse or partner healthy and causes nearly three times as much stress as raising children, said the women entrepreneurs surveyed in the Bank of America report.

For Shamji-Kanji, support from her family has proven invaluable. Her 29-year-old son, Faraaz, helps manage her clinics. And after a heart attack led her husband, Nausher, to sell several pharmacies that he owned, he joined his wife in one more business venture. Along with Shamji-Kanji’s business partner, they opened frozen yogurt franchises in the Dominican Republic and hope to open a yogurt manufacturing plant there.


  • Am I in a financial position to self-fund astartup? If not, what other resources might be available?
  • What steps can I take to protect my family’s financial future while I launch my business?
  • How can Merrill Lynch help me provide benefits for my employees?

But, she also relies heavily on support from Allaudin. “It’s important to surround yourself with people who help you grow in a different direction,” Shamji-Kanji says. “Nadia helped us become a little more fearless about investing, making the money work for us instead of having us work so hard, and opening our eyes about the need for longer-term thinking, which I would never have done on my own.”

Every woman starting her own business is bound to find the partnerships she forges with her mentors and advisors invaluable in helping her overcome the hurdles she’ll face along the way. Challenges aside, both Shamji-Kanji and Love agree that the rewards of being an entrepreneur far outweigh the financial risks and the long hours. “It’s very gratifying to be able to use my creative ideas without having to answer to anyone and to know that I have job security until I choose to stop,” Shamji-Kanji says.

Love’s biggest satisfaction: “Doing something that reflects who I am. I’m especially glad that I can teach my children that anything is possible when you believe in yourself.”

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