Few women know the upsides of growing a business better than Rebecca MacDonald. The executive chair of Energy Savings Income Fund, a provider of electricity and natural gas, has grown her Toronto-based company from $2 million in revenue in 1998 to $1.2 billion in fiscal 2006, and is now reaping the rewards: great personal wealth, a strong and stable company and the incredible satisfaction and pride that comes from creating something so successful from scratch. “I’m very happy about what I’ve been able to accomplish,” she says.
There should be more women like MacDonald. After all, female entrepreneurship is thriving, both globally and nationally. The number of women-owned businesses in Canada is rising 60% faster than those run by men, says a 2004 report by CIBC World Markets. If the current pace of growth is maintained, the number of women-run enterprises will top the one-million mark by the end of the decade.
Still, Rebecca MacDonalds are rare in Canadian entrepreneurship. Though women are starting companies at a fantastic rate, their firms tend to be small. According to the CIBC report, just 4.3% of women’s companies enjoy revenue of $1 million or more, while 10.7% of men’s companies can say the same.
That’s what makes the 2006 PROFIT W100: Canada’s Top Women Entrepreneurs so extraordinary. Only a small fraction of Canada’s 800,000 women-owned firms are as large as the firms on the eighth annual PROFIT W100, which range in size from $2.8 million to $1.2 billion in revenue.
How have the W100 bucked the trend? They refuse to limit themselves. They thrive on challenge, swiftly maneuvering around the barriers that businesswomen face. They spot underserved niches, penetrate markets around the world and produce remarkable innovations, from FDA-approved natural cold remedies to award-winning violin accessories used by virtuosos around the world.
But perhaps most important, they appreciate the incredible value of growing a company. And while they’re first to admit that growth can be trying at times, they know the rewards are worth it. Take your small business to the next level and you, too, could have a rock-solid company, less stress (believe it!), an easier time attracting and retaining top employees, personal wealth and, best of all, a feeling of accomplishment that’s beyond compare.
“Growth is everything. I can’t understand anyone not wanting to grow their business,” says MacDonald, whose firm (TSX: SIF.UN) tops the eighth annual PROFIT W100 list. “Unless your business is growing, it’s stagnating. Keeping the business small, you don’t have a diversification portfolio, so you are counting on all the eggs in one basket. You cannot sustain the bad times as much as a big business can. You can get in trouble way quicker.”
She’s not alone in the belief that growth strengthens your company, reducing vulnerabilities. “Thinking small has its risks,” says Lakshmi Raj (No. 39), co-CEO of Calgary-based Replicon Inc., a $9.9 million developer of Web-based billing and time-sheet technology. “You’ll have to reinvent if there’s a new player in the market. You’ll have to re-strategize and ask, ‘What’s unique about me now?'”
As someone whose bread and butter comes from serving some of Canada’s largest corporations, Victoria Sopik knows the financial clout and brand awareness that big businesses have — and the threat they pose to small businesses. “Imagine you’re a small bookstore, and all of a sudden Chapters opens down the street,” says Sopik (No. 60), president and CEO of Thornhill, Ont.-based corporate child-care firm Kids & Company Ltd. “There’s always the risk of someone bigger and better coming along with the same products at better margins.” Although no major daycare chains exist in her particular niche — full-time and emergency child-care for corporate employees — there’s no knowing when a domestic rival will pop up or an established U.S. business will move north of the border. That’s why she’s expanding aggressively, using venture capital, angel investors, Canadian banks and other sources of financing to establish new centres at a rapid clip. Last year, Kids & Company’s 15 centres generated revenue of almost $6.5 million, up 445% from 2003 — putting Sopik on track to reach her goal of 50 centres by 2010.
In many ways, running a large business is actually easier than running a small one. “With a bigger business, there’s more flexibility,” says Kate Bird (No. 43), president and CEO of Career Essentials Inc., a Markham, Ont.-based provider of skills training for unemployed and injured workers with 2005 revenue of $8.6 million. “There’s a period where you don’t see friends and family, but it’s actually easier for me to take a vacation now than it was five years ago.” In fact, Bird now spends just two days a week in the office and the rest of the time working part-time at home, enabling her to spend more time with her two young children, aged one and three.
Teresa Cascioli (No. 3) runs a $133-million-a-year brewery with 200 full-time staff, but says she’s not working any harder than the average small-business owner. “It’s the same amount of work, just more transactions through,” says Cascioli, chair and CEO of Hamilton-based Lakeport Brewing Income Fund (TSX: TFR.UN). Another benefit is the relative ease with which larger companies can attract employees, thanks to their more recognizable names and ability to offer richer benefit and compensation packages. Retention can also be less challenging for larger companies. “If you keep your business small, you could lose people,” says Cascioli. “Lots of people are motivated by where they can go in an organization.” Indeed, development and advancement opportunities are the most important consideration among members of Generation Y when choosing a company to work for.
Then there’s the money. The entrepreneurs behind large businesses can afford to pay themselves more — much more — than the average small-business owner, and plug that cash into anything from nice cars and vacation properties to retirement savings and their kids’ educations. It also helps CEOs make significant contributions to their communities. In 2003, MacDonald’s generous gift to Toronto’s Mount Sinai Hospital led it to launch the Rebecca MacDonald Centre for Arthritis and Autoimmune Disease, a one-of-a-kind outpatient facility specializing in the research and treatment of rheumatoid arthritis and other autoimmune diseases. Of course, large companies themselves can direct significant funding to worthwhile causes. Janis Grantham’s (No. 4) Ottawa-based Eagle Professional Resources Inc. has donated $250,000 over the past five years to the Children’s Aid Foundation, funding various projects and programs, including critical operating support to preschool, after-school tutoring and mentorship programs. In December 2005, Lakeport donated $100,000 to Hamilton Food Share and the Hamilton division of the Salvation Army. “I was born, raised and educated in Hamilton,” said Cascioli, “and am especially pleased Lakeport can participate in a small way to make the holidays better for families in our community.”
But what most W100 women see as one of the best outcomes of growth is the satisfaction and pride that comes from accomplishing something so remarkable. “Aside from bigger profits, [women with small businesses] are losing an ability to prove to themselves that they can reach where they never thought they could reach before,” says MacDonald. “That’s something I’m very grateful for — that I’ve pushed myself beyond limits.”
If there are so many obvious upsides to running a large company, then why do so few women seem to do so? Theories — and generalizations — abound, and even the CIBC World Markets report on women entrepreneurship concludes that the answer “is not easily determined.”
However, the women of the W100 have their opinions. More than half (53%) of the W100 believe that women may be unwilling to take the risks that come with growing a company from small to big. “A lot of women, by their nature, are risk-averse,” says MacDonald. “Unfortunately, a number of them think the cup is half-empty, and it’s just a general fear of failure.” MacDonald admits she was once in the same position. “You simply have to roll the dice at some point,” she says. “I’m a good example.”
The W100 also believe there’s truth in the theories that some women don’t want to (45%) or can’t (33%) sacrifice time with their families. “As women, we have other things we have to look after,” says Cascioli. “Many have children and other commitments that would require they have a good support network, and not every woman has one.” Accordingly, Cascioli had to give up a lot to grow Lakeport — she does not have children, and did not have a “significant other” in her life for many years. “I couldn’t dilute my energy from the business,” she says.
On the flip side, Sopik believes building a business while raising a family produces a net benefit for her kids. She believes that her long hours and bouts of stress have had a positive effect on her children. “It’s really great for kids to see the challenges of the business from a young age, because it helps them realize that what they choose to do isn’t necessarily going to be wonderful and easy.” Sopik is the poster child for managing against the odds: not only does she run the fastest-growing firm on the W100, she’s also a mother of eight.
Some 29% of the W100 believe women have weak business networks, placing another drag on growth. Bird of Career Essentials believes part of the problem lies in women’s tendency to downplay their company’s success and share credit rather than sing their own praises. “A lot of women I know aren’t very good at boasting about themselves,” she says. That’s a managerial weakness, given that businesspeople judge potential suppliers and partners on their accomplishments rather than their humility.
Despite the real and perceived obstacles to growing and running a big business, Cascioli abhors women who cite their gender as a barrier to success. “You shouldn’t use being a woman against you, saying, ‘I’m a woman, so I can’t do it.’ The whole notion is garbage. Forget gender. You have to behave like a businessperson.”
Does Cascioli wish more women would grow and run bigger businesses? “The best person for the job needs to run these companies,” she says. That opinion puts Cascioli in the minority among Canada’s Top Women Entrepreneurs. Some 86% of the W100 would love to see more women reap the rewards that come to entrepreneurs who take the risks and overcome the challenges accordant with growing a business — but with one caveat, quips Bird: “As long as they aren’t in my field and competing with me.”
Other highlights from the 2006 PROFIT W100:
The W100 became involved with their companies in a variety of ways. Some 74 founded their firms, either alone or with partners. Another 13 purchased their companies. Seven took over a family business, five took over an existing business and one joined as partner.
Fields of endeavour
The W100 companies continue to shine in industries traditionally dominated by male entrepreneurs, including manufacturing (21), construction (4) and software development (2). Fully 35 companies deliver services to business, and another 18 operate in the consumer-services sector. Twelve operate in wholesale or distribution; eight are in retail.
Ontario is home to 62 W100 firms, far out-distancing the 14 and 11 of runners-up British Columbia and Alberta, respectively. Quebec checks in with seven, New Brunswick and Saskatchewan are represented by two companies each, while Manitoba and Newfoundland each place one firm on the list.
They may be headquartered in Canada, but 54 W100 firms sell beyond our borders. Every exporter on the W100 derives some of its revenue from the U.S. market, while 35% sell to the U.K., 43% have clients in other parts of Western Europe and 26% boast customers in Australasia. The W100 also sell in significant quantities into India, China and Mexico.
How we ranked the PROFIT W100
The W100 were ranked by gross revenue in the most recently completed fiscal year of their firms. Figures were verified through review of financial statements. PROFIT solicited entries through nomination forms published in PROFIT, its sister publications Maclean’s and Canadian Business, and online at PROFITguide.com; direct mailings to past winners and other successful women business owners; plus nomination forms and information distributed by various organizations.
Special thanks to Jennifer O’Connor, who surveyed and qualified the PROFIT W100.
|Average revenue||$27.5 million|
|Median revenue||$7.6 million|
|Average three-year growth||137%|
|Average number of employees (FTEs)||100|
|Number of profitable firms||94|
The W100’s fastest-growing companies
|Victoria Sopik||Kids & Company Ltd.||3,376%|
|Jacqueline Shan||CV Technologies Inc.||2,727%|
|Sandra Wilson||Robeez Footwear Ltd.||1,172%|
|Jane Gowing||Gowing Contractors Ltd.||343%|
|Linda Hipp||Lija Style Inc.||295%|
*By three-year revenue growth, among companies with base-year revenue exceeding $100,000
|WHAT THEY DO
A sector-by-sector breakdown
|WHAT HOLDS WOMEN BACK
Only a tiny fraction of Canada’s 800,000 women-owned businesses are as large as those on the W100. PROFIT asked Canada’s Top Women Entrepreneurs why they think women tend to run small businesses
|Are unwilling to take the risks that come with growing a bigger business||53%|
|Don’t want to sacrifice time with their families||45%|
|Have insufficient access to capital||44%|
|Don’t “dream big enough”||42%|
|Can’t sacrifice time with their families||33%|
|Start companies with limited growth potential||32%|
|Have weaker business networks than men||29%|
|Lack the management experience/training needed to grow and run a large company||27%|
|Put lifestyle considerations (excluding family) ahead of business growth||22%|
|WHERE THEY ARE|
|No. who founded their company:||74|
|No. who say they’ve achieved balance||75|
|Favourite business books:|
|No. 1: Good to Great by Jim Collins|
|No. 2: The E-Myth by Michael E. Gerber|
|No. 3: Blue Ocean Strategy by W. Chan Kim and RenÃ©e Mauborgne|
|No. 4: How to Win Friends and Influence People by Dale Carnegie|