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3 rules for female small business leaders

Shelly  Gigante

Posted on October 05, 2020

Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.

It takes more than blind luck to get a struggling small business back on its feet. It takes leadership, resolve, and no small measure of expertise, particularly for women in a traditionally male-dominated field.

Just ask Sandy Smith and Laura Bohle, the sisters from southern Idaho who took the helm of Idaho Industrial Inc. in 2003, their father’s business, which operates two hardware stores. With key management decisions right out of the gate, Smith and Bohle helped to bolster the company’s bottom line at breakneck speed.

And they did it by following simple rules:

“If not for Sandy and Laura, the business probably would have failed,” said Keven Prather, the MassMutual financial professional with TransitioNext Advisors in Cleveland, Ohio, whom Smith and Bohle engaged in 2008 to help develop a business transition plan. “Neither one of these two women would view themselves as pioneers in any way, but I think they are absolute groundbreakers in their communities.”

They are much more than that. Smith and Bohle are among a growing contingent of women (more than 10 million strong) across the U.S. who either own or lead businesses.Their journeys weave a tapestry of insight for the next generation of female entrepreneurs, who continue to face barriers to success, including limited funding, gender bias, and a lack of established support networks, according to 2019 research by Babson College’s Center for Women’s Entrepreneurial Leadership and Bank of America Private Bank.2

“Women entrepreneurs have often had their leadership position questioned due to their gender and also find that their businesses are subject to additional scrutiny due to gendered assumptions about the markets they are serving,” according to the report, which is based on interviews with 30 female business owners across all industries. “Women entrepreneurs are aware of the barriers they face to obtaining startup and growth capital. The lack of capital also creates new, ongoing challenges. They must plan for, and incorporate, organic growth, which is typically a slower process and more difficult to manage. This lack of capital can also impact recruitment and retention of talented employees, a critical step for growing any business.”


Sandy Smith (left) and Laura Bohle at one of their stores.

The upside, the report found, is that “these barriers haven’t stopped these women. Instead, they have developed strategies to grow their businesses and succeed.”

Pay fairly

For Smith and Bohle, that began with offering better benefits and wages to their 34 employees at Idaho Industrial Inc., which owns two Ace Hardware stores in Rupert and Burley, Idaho.

“Taking care of our employees is our main goal,” said Smith. “We train them well in customer service, and they know that they come first. We were once minimum wage workers ourselves, so we can identify.”

Competitive compensation is widely viewed as the most effective tool for attracting and retaining talent. It also saves money, counterintuitively, by reducing costly turnover.

More than 40 million U.S. workers voluntarily left their jobs in 2019, costing businesses more than $630 billion in expenses related to the termination, replacement, vacancy costs (number of days the job remained unfilled), and learning curve loss, since it takes time for new hires to become productive.3

Employees who are paid fairly for their work are also more invested in their jobs and likely to be more productive, according to an analysis of data by the Aspen Institute.4

Manage risk

Many small-business owners make an effort to plan for their personal financial security, but far too few prioritize planning for the future of their business, according to a 2018 Business Owner Perspectives Study by MassMutual.

If your business is your largest asset, however, it is critical that you develop a framework to protect your source of income for both yourself and your family.

Financial professionals who specialize in succession planning can help protect your business from the death or disability of an owner or key employee, help you determine the value of your business, and work with you to create a plan to distribute business assets tax efficiently from the owner’s estate to his or her heirs. (Related: The value of a financial professional)

Smith and Bohle have Prather in their corner, who has provided financial guidance to the family since he helped their father create a transition plan into retirement. Using MassMutual’s holistic CoreValue software tool, he helped benchmark the value of Idaho Industrial so that Smith and Bohle can concentrate their energy on value drivers, including brand development, operations, and financial management.

“He’s kind of like the brother we never had,” said Laura. “I can call him up on a Sunday and say, ‘Hey, what do you think of this?’ and he’s always available. He never tells us what we can or cannot do, but shows us what might happen if we make this choice or that one.”

Control debt

For most small businesses, loans are necessary to leverage growth. But too much debt reduces cash flow, which makes it harder to purchase inventory, pay employees, and cover operating costs.

Smith knew she could improve Idaho Industrial’s cash flow position by paying down debt and controlling inventory.

“We had a swell of inventory with merchandise filling the basement and upstairs offices and some of it had been checked in two years ago, but never put on the shelves,” said Laura. “Sandy put us on a financial diet and we could no longer order items willy-nilly—only what we absolutely needed. We estimated that it would take five years to dig out of debt. Sandy had us out in three.”

Other tips for managing small business debt include reviewing the interest rates on your existing loans and renegotiating with the lender (assuming your credit rating is strong), negotiating discounts with suppliers, consolidating multiple loans for a lower single payment, optimizing space on your premises (including subletting underutilized square footage), and reducing any staff redundancies, according to Small Business Trends.

Smith and Bohle take personal pride in the fact that all of Idaho Industrial’s loans are now paid off and that the business is once again thriving, as it was when their father ran the stores. They are also proud to serve as role models for their daughters, who have each gone on to earn a master’s degree in their respective fields.

The challenges that confront female business owners are significant, but not insurmountable. By sharing their strategies for success, women who run small businesses can help strengthen their support network and become active participants in the continued fight for gender equality.

Discover more from MassMutual…

Business owners: Gauging your exit readiness

Should you stay in charge or leave the business?

Need financial advice? Contact us


National Association of Women Business Owners.

Babson College’s Center for Women’s Entrepreneurial Leadership and Bank of America Private Bank, “Beyond the Bucks: Growth strategies of successful women entrepreneurs,” 2019.

Work Institute, “2020 Retention Report: State of the Workforce,” 2020.

Aspen Institute, “The Link Between Wages and Productivity Is Strong,” Feb. 4, 2019.  

The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of MassMutual.