Japanese women: the new faces of small business

Businesswomen on the verge of financial breakthrough

by Yuko Naito

Most people would assume that to start a business you need plenty of time and money, or at least experience working in a relevant field. But an increasing number of Japanese women are proving this assumption wrong by setting up their own companies based on little more than a good idea and the will to succeed.

A housewife for over 20 years, Aiko Ishibashi now heads the Kawasaki Shimin Sekken Plant (Kawasaki Citizens’ Soap Plant), a co-operative venture employing 21 people, including herself.

Before establishing the company, Ishibashi had been engaged in volunteer activities as a member of a local co-operative. Her involvement in various recycling projects prompted her to start thinking about making soap with used cooking oil, which is usually dumped or burned causing environmental pollution. Unlike synthetic detergents, natural soap can be dissolved in water and is more friendly to the environment.

Urged on by a sense of mission, she managed to collect venture capital of almost 40 million yen and formed the company in 1989. One month later she had found several women willing to work with her and created the workers’ collective Sabonso, which now manages the company. Today, they employ 14 workers suffering from emotional disturbances such as depression, who would normally have difficulty in finding a job.

The company produces about 10 tons of powder and liquid soap a month, using used oil collected from homes, restaurants, and school and company cafeterias.

But the going has not been easy.

“It is difficult to change people’s pattern of consumption. Even though they know natural soap is less irritating to the skin and better for the environment, few people stop using synthetic detergents,” Ishibashi says. “Synthetic detergents are fairly cheap and easier to use because they do not form lumps like powdered natural soap. But I knew from the beginning that it would not be a profitable business. I just want to keep it going as long as possible. It’s a way of educating people to be more eco-conscious.”

These days, female company presidents are no longer a rarity. According to a survey by Teikoku Databank, the number of women-owned or women-run companies first topped 60,000 (60,593) in 1999, although they made up only 5.4 percent of the total number of businesses and 80 percent were companies handed down to them by their families or husbands.

“I have a feeling that there are many more businesses run by women than that,” says Kyoko Okutani of Women’s World Banking Japan, more widely known as WWB Japan. “About 60-70 percent of women’s companies are one-woman affairs, or very small firms with only a couple of employees. Many of them have not been registered as corporations, and accordingly they are not counted in Teikoku Databank’s data.”

WWB Japan is a nonprofit organization established in 1990, and is backed by the United Nations and the World Bank. While financially supporting prospective female entrepreneurs, it has regularly held seminars to teach them how to start up businesses. Only about 10 people attended their first seminar 10 years ago, but today around 40 people squeeze into the classes, which have an official capacity of 30.

“I’m always impressed with their eagerness in class,” says Okutani about the women in attendance. “One out of four participants actually establishes a company, which I think is a pretty high percentage.”

According to a survey by the National Life Finance Corporation Research Institute, the three areas in which women most commonly launched businesses in 1998 were: the personal service industry (23.5 percent), the food trade (21.0 percent) and retail (19.9 percent). In a book published in 1997, the institute says that female entrepreneurs try to offer services or products they feel are lacking in their everyday life.

In the case of Toyoko Suenobu, the experience of nursing her sick mother for over 10 years was the primary stimulus for founding her company, Care Design Station. “If I had not had that experience, I would not have been interested in a business related to elderly people,” she says.

A former freelance interior coordinator, Suenobu is now a consultant on living environments for elderly people. She plans barrier-free houses, advises on house renovations such as the installation of railings or ramps and consults on interior design and furniture arrangements catering to seniors’ physical limitations.

“The nursing care insurance system came into effect this April, and more and more people will be expected to take care of their old family members at home. I think more houses will have to be modified for elderly people,” she says.

Since Suenobu started her business a year ago, most orders have come from people she knows personally. So far she is the only staff member and does not have an office, but hopes to expand the business in the future.

The biggest problem is a lack of time, Suenobu says. A housewife and mother of two, she is obliged to do domestic affairs and take care of her family in addition to running her business. “I don’t have enough time for my family, or for the business, either,” she says with a sigh.

Obviously, many working women who are married have similar problems to Suenobu’s. Some experts, however, criticize them for using this as an excuse for not being as serious as their male counterparts.

“Unfortunately, I must say many women seem to consider their business as a kind of hobby, because even if the business does not go well they will never starve as long as they can rely on their husbands’ income,” says Kazuyo Kihara, the president of a real-estate agency catering to women and aged people.

Kihara founded her company E Life Inc. 10 years ago. The first years were tough financially, but she never relied on her husband for money, working instead until after midnight every day. It took her five years to get the corporation on its feet.

Before establishing her company, Kihara worked for two major real-estate agencies for a total of 15 years. She recollects that she was often offended by how women and elderly people were treated when they tried to buy or rent real estate, and wanted very much to help them.

Everyone who heard of her idea of founding a real-estate agency targeted at women and the elderly was against it, saying it would not pay. And in fact Kihara is far from becoming a millionaire, despite being such a hard worker. She can afford to employ only one full-time staff member and a student part-time worker.

“I spend too much time on each client. That’s why I cannot make much money,” Kihara says. She thoroughly investigates every property she deals with and tries to find exactly the right one for each client. She consults on financing, too. “It is the client’s responsibility to decide where to live or where to borrow money, but we have to give them as much information as possible, because it is a business. They pay for my service.”

Most businesses operated by women are targeted at relatively small markets so profits are also small. However, women are likely to be motivated by the desire to express themselves or to contribute to the community through work, rather than money, says Okutani of WWB Japan.

Now is a good time for women to start up a new business, Okutani says, because more and more private and public organizations — including the government — have begun supporting prospective female entrepreneurs in various ways. Some offer information necessary for founding a company, and others provide opportunities to network and exchange opinions with businesspeople.

“It is good for Japanese society too,” says Okutani. “Female entrepreneurs can create new employment and help stimulate the economy.”