Redken leads survey of women-owned companies.

Redken leads survey of women-owned companies

Paula Kent Meehan's Redken Laboratories is the largest woman-owned business in Los Angeles County, according to a survey of women-owned businesses appearing on pages 27 through 30 of today's Business Journal.

Meehan's Canoga Park-based company, which posted $120 million in 1988 revenues, tops a list of the 100 largest women-owned business operating in L.A. County. The Business Journal survey shows that women have successfully undertaken everything from engineering and electrical contracting to securities brokerage and architecture.

The list is also further evidence of a Los Angeles County and U.S. industrial phenomenon: The galloping growth in the number of women-owned businesses.

Women-owned businesses constitute the fastest-growing segment of the small business community, according to the Small Business Administration. Between 1980 and 1986 the number of women-owned sole proprietorships rose 62.6 percent, vs. a 41.8 percent increase in all sole proprietorships. Los Angeles, according to some sources, has more women-owned businesses than any other city.

Women owners of Los Angeles County companies have ventured into some industries traditionally considered the domain of men only. For example, Lyncole XIT Grounding, a Torrance manufacturer of electrical protection systems with revenues of $1.1 million, is owned by Elizabeth Robertson.

The most common types of woman-owned businesses on the list are public relations agencies, consulting firms, and personnel services. So many women work in public relations, in fact, that the industry is sometimes known as a "pink collar ghetto."

Women-owned businesses are proliferating in Los Angeles and the rest of the country for a myriad of reasons, but among the reasons most commonly cited by experts are:

* Women have entered the work force in great numbers and gained skills they can use as entrepreneurs. The Small Business Administration reports 62 percent of the 23 million new jobs generated between 1976 and 1987 were filled by women.

"The training ground [for women] has been corporate America," said Kristine Morris, a partner at Cowen, Morris, and Berger, an executive search firm in Pasadena.

As part of mid-management, women learn to budget, sell, hire and develop products - all skills they can use when setting up shop, said Morris. Mergers and acquisitions have eliminated many mid-management positions, encouraging women to go out on their own.

* Growth has also been fueled by advances in technology, allowing women to start a business with less capital.

Myra Grenier and her partner Lynn Ecklund, for example, used an extra personal computer and began working as information brokers, accessing on-line databases. Grenier, who worked 25 years as a librarian at Aerojet General Corp. in Azusa and Ecklund, who was a librarian 19 years at Atlantic Richfield Co., each invested $10,000 and started Seek Information Service in Glendale.

* The computer has also "enabled women to earn a livelihood from home and be there for their children" at the same time, says Paul Edwards, who co-wrote the book "Working from Home" with his wife, Sarah, out of their Santa Monica condominium.

Christine Soderbergh started a home-based public relations firm six years ago with less than $3,000 after she had her first child. Soderbergh, who has three children now, is still working from her home in the Pacific Palisades. She can make her own schedule "doing phone interviews after hours."

Soderbergh's home-based enterprise, like Sarah and Paul Edwards', represents a growing trend. Paul quit his job as attorney and Sarah quit hers as a clinical social worker to start working from home several years ago. So many friends asked them how they did it that they "decided to write a book about working from home," said Sarah.

Among other things, Sarah now consults on starting home-based business and believes this trend is on the rise in Los Angeles, especially among women: "A full 8 percent of the 26 million people who work from home live here in L.A."

There are a number of ways that women can find help in starting a business. Sandy Steers, a member of the SBA's advisory council, encourages women to participate in the SBA "Mentor Program," which pairs women entrepreneurs with those who already have an established business.

Elizabeth Robertson considered getting a loan through the SBA to open Lyncole XIT Grounding, manufacturing electrical-related products. But she decided against it: "They wanted to write a business plan and I already had one." So she started her company by getting family members to cosign for the $100,000 loan she got from a small bank.

Patty DeDominic, founder of Los Angeles-based PDQ Personnel Services, noted "many women get frustrated because they think they need $100,000 to start a business." She said she believes it is possible to start some businesses with minimal capital.

Having built her agency virtually from scratch to a $12 million-a-year business, she suggests women do what she did when she started in 1979: offer their business services in exchange for the use of someone's office or store.

Those established within an industry for at least a year may qualify to obtain government contracts. "The law mandates public utilities companies to grant 5 percent of their annual contracts to women-owned enterprises," according to Clarence Hunt, president of Women and Minority Business Enterprise Advocates Corp. in San Francisco.

However, less than 2 percent of those who apply actually get a contract. If a request is rejected the appeal process "is time-excessive and costly," he said.

According to FutureScan, a newsletter published by Roger Selbert in Santa Monica, "the failure rate of businesses started by women is less than half that of the overall business failure rate. After their first five years, 77 percent of women-owned businesses still exist, and about a third of those have grown."

Experts agree that this success is due to women opening smaller businesses or working for themselves on a part-time basis. But, larger women-owned firms are becoming more visible.

Virginia Tanzmann says her success is due to her ability, among other things, to manage money. Tanzmann opened her architectural firm with $20,000 after nine years of experience. She learned "to make a penny scream" by watching her parents save every penny during the Depression. She said she has never borrowed money, advising it is better to grow slowly. She has run Tanzmann Associates since 1978 and now manages a staff of 25.

To avoid failure, Gene Call said women should do more networking. Call said women are afraid to go up to people and ask "how's business?" The Brentwoodbased Call thus offers "Word of Mouth Marketing," a seminar where he teaches professionals to be their own publicists.

Knowing where the opportunities are may make it easier for women to stay in business.

For women who would like to work at home, Paul Edwards said desktop publishing is a business that can be started with little money. Home-office furniture manufacturers and distributors can also capitalize on the growth of home-based businesses.

Tina Floyd said she deliberately chose to specialize in the medical field, which she knew would not collapse during any economic turbulences. Doctors' Corner, a 22-year-old, Tarzana-based temporary help service that provides medical personnel, is opening its fourth office.

Still, juggling a personal life while owning a business is a tough task.

If Barbara Nyden Rodstein, named 1990 Women Business Owner of the Year by the Los Angeles chapter of the National Association of Women Business Owners, were starting now, she "would [have gotten] a personal life in there," and would have delegated more. Rodstein now runs Harden Industries, a $25 million-a-year company that manufactures upscale bath fixtures.

A rewarding family life is possible if "the teeter-totter is evenly balanced," says Edie Lopez Lusk, founder of Pasadena-based Lopez Lusk Consulting. "It's the quality of time you spend together, even if it's just two or three hours a day," Lopez says.

Table : Profile of NAWBO members(*)

Ownership

   83%          founded their business
    8%          bought their business
  1.8%          inherited their business
   60%          are incomporated
   33%          are sole proprietorships
    6%          are partnerships

Family

   66%          have children
   62%          are married

(*)The National Association of Women Business Owners

Table : Percentage of women-owned small businesses

                    Millions of              Percent
Year                   woman                ownership
1977                   11.6                    23%
1982                   12.8                    26
1984                   15.9                    29
1988                   18.9                    38
2000                   30.0                    50

Sources: Entrepreneur Magazine; IRS; The Census Bureau; Small Business Administration