Despite the challenges of a down economy, many women business owners believe their firms will grow in 2009.
Nearly three in five (58%) women business owners anticipate that their organizations’ revenues will grow in 2009, and nearly one-half (44%) do not expect difficulty in obtaining access to credit, according to the 2008 Business Risk Survey conducted by the Chubb Group of Insurance Companies and the Women Presidents’ Organization (WPO). The 2008 Business Risk Survey was conducted online in October 2008 and queried 160 women chief executive officers and presidents who are members of the Women Presidents’ Organization
“It’s not surprising to see that so many women presidents are optimistic about their companies’ future growth, despite current economic conditions,” said WPO President and founder Marsha Firestone, Ph.D. “As women have successfully built their businesses, they have been faced with many challenges. Their optimistic outlook, in conjunction with their business savvy, has been essential to their success. Faced with yet another challenge as a result of the current economic environment, WPO members—owners of multimillion dollar businesses—recognize that future revenue growth requires that they change the way they do business by broadening their product or service offerings, opening new offices, expanding their global reach and developing innovations.”
“However, the very same activities that will help these women grow their businesses may also increase their companies’ exposure to a liability lawsuit,” said Lisa Jones, vice president, Chubb & Son, a private commercial product manager for Chubb Specialty Insurance. “Small to medium-sized firms with more limited resources may be particularly vulnerable to the costs associated with a liability lawsuit.”
One-half of the respondents (54%) noted that their company is likely to broaden its product offering in 2009. “New products bring new opportunities for growth,” said Jones, “and opportunities for product liability and errors and omissions claims.”
Thirteen percent said they would add international offices. “Although this enhanced multinational footprint can help further grow revenues, it may also create property exposures and open the door to liability lawsuits in countries with laws and regulations that differ from those in the United States,” said Jones.
Jones also noted that links in a company’s global supply chain will be under pressure to cut costs. As a result, many suppliers may be forced to lay off workers and products may not be thoroughly inspected, increasing the risk that defective materials could travel through the supply chain to the finished product. In 2007, the U.S. Consumer Product Safety Commission reported the largest number of voluntary recalls (472) in the past decade, and about two-thirds of all U.S. consumer product recalls involved imported products.
“Supply chain management has become a very complex issue,” said Jones. “To help prevent a product liability lawsuit, know your supply chain and their supply chain. Make sure their corporate values and safety standards align with yours.”
Survey respondents indicated that in 2009 their companies are likely to outsource functions or operations (24%), reduce their workforce (19%), and reduce or eliminate some employee benefits (13%).
“Anticipating continued economic turmoil, survey respondents foresee making changes to make their businesses more competitive. However, economic conditions can have a negative impact on employment-related claims and lawsuits,” said Jones. “Although a majority of the survey respondents (89%) indicated that they are not concerned about employment practices liability risk increasing in 2009, our experience has shown that when companies lay off employees or reduce employee benefits, there is generally a corresponding spike in employment practices liability lawsuits, as well as incidents of workplace violence.”