Joseph Pryweller PLASTICS NEWS STAFF
Entrepreneur Sheri Orlowitz recently decided to fulfill a dream of owning her own manufacturing company.
But after giving a bank two shots at approving her financing with agreeable terms, she ended up walking away. Fortunately for her, another bank gave her a fairer shake, she said.
"The [first] bank wouldn't have offered the same package to a man at the point of discussions we were in," said Orlowitz, who owns manufacturing holding company Shan Industries LLC of Hamburg, N.J. "My whole life, I've borrowed millions of dollars. I knew that the deal they presented me was not acceptable."
In January, Orlowitz acquired Broken Arrow, Okla.-based rotational molder Armin Thermodynamics and steel processor Accurate Forming, launching a business with combined sales projected at about $17 million for this year.
Orlowitz said the playing field is not level yet for women entering plastics, even compared with other minorities.
Conversations with the women owners of close to two-dozen plastics companies and industry experts revealed roadblocks similar to Orlowitz's. Securing bank loans, especially for large amounts, can be a source of consternation.
And major corporations and government agencies have been slow to meet — or even set — specific targets to buy goods from woman-owned companies. In fact, even identifying those processors can be a challenge: Certification of woman-owned businesses is just starting to gain force.
Those factors — and the late entry of many women to college engineering programs — contribute to an arid landscape for woman-owned processors. Less than a dozen woman-owned plastics companies in North America have sales of more than $10 million annually, and the total number of companies is few.
Numbers are climbing for women business owners in other industries, especially for nontraditional and service occupations. And almost 22 percent of plastic and metal machine operators now are female, according to 1999 figures from the Bureau of Labor Statistics.
Today there are 9.1 million woman-owned companies, accounting for $3.6 trillion in annual sales, according to figures from the Census Bureau. But that bounty has yet to spread to plastics companies. In fact, most aren't even aware of the others.
"I haven't met any other women doing this," said Martha Lewis, president and chief executive officer of Lewis Pipe Co., a PVC pipe producer based in Ardmore, Ala. "All my peers are men. I haven't given too much thought to it, and I don't need excuses to be a woman in a man's world."
All but a handful of women who own plastics processors took over businesses formerly owned by a relative — which in some cases thrust them into the spotlight.
For women, opportunities and funding are five to 10 years behind that of other minority owners, said Christopher Brown, president of Capital Across America Inc., a private funding group for woman-owned businesses based in Nashville, Tenn.
"Women are minorities, too, but they aren't always treated that way," Brown said. "As the years have gone by, women have been slotted differently from men. They face all sorts of growing pains."
Minority-owned companies may benefit from aggressive purchasing programs, especially from U.S.-based automakers. But those programs generally do not include women, unless they belong to another minority group.
Women business owners have traveled a tougher road, but one that has helped those companies earn respect, said Robin Hunt, president of H&W Plastics Inc. of Bowling Green, Ky.
Few strong women mentors exist, so most women have broken through the glass ceiling by running a business on their own, she said. And that is fine with Hunt. She, like others, was not in favor of set-aside programs for women.
"I didn't spend thousands of dollars getting QS- and ISO-certified just to be given business because I wear a skirt," Hunt said. "But we've paid our dues, and we'd like equality."
But equality can be a slippery slope. A recent scan of a list of woman-owned plastics businesses from the U.S. Small Business Administration shows holes in coverage.
More than half of the companies calling themselves woman-owned actually are operated by men or feature women as minority stakeholders. Those companies are excluded from professional certification and some government-guaranteed loans targeted at women. Yet, many potential customers use that same SBA roster when seeking woman-owned processors.
SBA acknowledges the problem, saying it does not have the resources to professionally certify companies. The list is self-reported, said Sherrye Henry, assistant administrator for the SBA Office of Women's Business Ownership in Washington.
"It's a huge problem," she said. "The outright lying that goes on in other businesses in order to get contracts is a real problem for women."
Two not-for-profit groups, the National Women Business Owners Corp. and the Women Business Enterprise National Council, are among those that have started third-party certification. The groups require that a woman own more than half of the company and control daily operations.
The Washington-based groups are attempting to stop companies from making excuses for not hiring woman-owned businesses, said Janet Harris-Lange, certification director for National Women Business Owners.
"Companies want to attract women to the dollars they spend, but they're not comfortable doing that without thorough standards," Harris-Lange said. "They're afraid that business is not going to a viable, woman-owned company or is being passed through a shell company to a male-owned business."
Yet, the number of women who are board-certified still is low, Harris-Lange said. She expects to see a surge in activity in the next several years.
Many companies are using certification to award contracts to disadvantaged companies, said Susan Phillips Bari, president of the Women's Business Enterprise National Council. Among those with women-based supplier diversity programs are General Electric Co., Lucent Technologies Inc., Motorola Inc., Hewlett-Packard Co. and IBM Corp.
Thousands of certifiers on the state and local levels are starting to certify women, she said.
"Many companies claim to be women-owned when, in fact, they don't understand what the criteria are," Bari said.
A case in point is Harmony Systems and Service Inc., an injection molder based in Piqua, Ohio. The company is run jointly by the husband-and-wife team of Edward and Nellie Adams. Both had worked at General Motors Corp. for years and wanted to go into business for themselves.
They reported their new company in 1994 to the SBA as a woman-owned business, said Chief Executive Officer Edward Adams. That point is even made in a company brochure.
"We thought it might benefit us," he said. "But it really hasn't. We've grown by recognition of our good performance."
Achieving standards has been tricky on the government level, too. In 1995, the government announced a plan, developed by the SBA, to raise the level of federal contracts to woman-owned companies. The plan called for doubling the share of contracts going to woman-owned businesses to 5 percent of the $200 billion spent annually by government agencies.
Yet, to date, the level of government spending has not exceeded 2.3 percent, up a scant 0.4 percent from 1995 levels, Henry said.
"At most, it's still a goal," said Henry, who added that a renewed federal mandate will attempt to hike the percentage.
Still, SBA and other groups offer women a phalanx of business-training and education programs and online chat rooms. Many of those programs are offered at SBA's 80 business centers for women.
SBA also offers a microloan program, guaranteeing a loan of as much as $25,000. Since 1993, more than $11 billion in SBA-backed loans have been granted to woman-run businesses, Henry said. Of that total, $38.6 million has gone to plastics firms.
The guaranteed loan amounts, however, are a droplet for a plastics company hungering to buy equipment with a hefty price tag. Banks have not always been the most friendly source of capital to women. Many women business owners spoke of self-funding their businesses or operating with only a small credit line while getting started.
A case in point is Pacific Plastics & Engineering of Soquel, Calif. The injection molder — specializing in tight-tolerance parts for the medical and biotechnology fields — had to rely on its own funding sources for several years, said CEO Stephanie Harkness.
Harkness and her husband, Jack, bought the company in 1989, with Stephanie set up to run the company as majority owner. The company needed a turnaround, so the couple cleaned house and started over.
Financing was difficult, which Stephanie Harkness attributed partly to her status as owner and CEO. The Harknesses sank their retirement funds and all profit back into the business.
"It will be a few more generations before we equalize things with men," she said. "Access to capital isn't so easy. We need a little helping hand, a little push, now and then."
Problems with bank loans are an institutional problem, said Peg Wyant, managing director of Isabella Capital, a Cincinnati-based venture-capital firm specializing in woman-owned companies.
"Typically, women work outside of financial networks and are not able to penetrate them," said Wyant, whose firm specializes in high-tech companies. "You're not fraternity brothers with these guys, not in the same clubs, didn't play golf on the same teams. Money is controlled by men."
And while women run 38 percent of all U.S. companies, fewer than 3 percent of those companies use venture-capital funding, according to figures from several industry groups.
Since June 1998, SBA has offered capital funding to woman-owned businesses through three small business investment companies, called SBICs. That trio of firms has provided $80 million of equity funds, SBA's Henry said.
The ultimate goal of these emerging programs is to create a land of opportunity for all companies, said Deborah Waddell, owner of thermoforming and injection molding companies Curd Enterprises Inc. and Multiplastics Georgia LLC.
Waddell has gone through a state certification process in Mount Pleasant, S.C., where Curd is located. And she is happy to have it — with some reservations.
"I don't believe that you should judge a business by the owner's sex," Waddell said. "But you have to take advantage of the opportunities out there to be grabbed. If this helps us compete equally, then I'm all for it."