Capital Intentions: Female Proprietors in San Francisco, 1850-1920

Chapter 3. How Women Started Businesses

CHAPTER 3 How Women Started Businesses Once San Francisco women seized on proprietorship as a way to overcome the economic, legal, and personal restrictions that limited their employment choices, they faced the daunting task of getting their businesses started. This too was a test of a woman’s capital intentions. For what start-up strategy she adopted might determine whether or not her enterprise took off at all. Such a decision involved careful consideration of the risks and requirements of each approach. Because female proprietors had few other income options to turn to, prudence was necessary every step of the way. Easy access to credit during the flush and male-dominated years of the gold rush made starting a business during the early s simple. This was particularly true for white women, who were idealized in nineteenth-century American culture as nurturers and homemakers. Demand for their domestic skills and services, fueled by a dramatic gender imbalance, meant female proprietors were unusually safe risks in the eyes of most creditors, and women enjoyed generous terms for financing new enterprises as a result. A woman with an ‘‘honest face’’—typically the face of a married white woman—found she needed little else to access almost unlimited credit. Yet such beneficial commercial conditions were short-lived. Indeed, the gold rush era was the only period when their gender seemed to be an advantage for some women.1 Thereafter women found access to credit—that is, the ability to purchase necessary inventory and fixtures with extended payment plans—particularly difficult. By at least the s, credit dispensation became an impersonal, rationalized process in which ‘‘an honest face’’ counted for very little. Instead , creditors relied on evaluations of a proprietor’s capital assets and experience . This put all women at a distinct disadvantage both because most came into proprietorship with no previous business experience and because the economic and legal restrictions on women’s ability to earn and control money made saving cash out of reach for most would-be female proprietors. These financial disadvantages, in combination with women’s lack of alternative employment options, made San Francisco women cautious when it came to how they started their businesses. First and foremost among their concerns were practicality and cost. Women sought ways to limit the capital they needed to get started as well as to contain their liability. Their start-up strategies reflect this. Instead of expensive loans from institutional lenders, the city’s female proprietors sought out loans with more-lenient and forgiving terms from informal lending networks comprised of female and male acquaintances . Partnership, a second strategy, contained both the amount of money and the responsibility a businesswoman took on for her new business. But because a partnership also made a woman liable for someone else’s blunders , it increased the risks of business start-up, and therefore relatively few women employed this strategy. The most popular means of start-up by far was taking over or buying out an already established business. As this chapter will show, San Francisco female proprietors utilized this strategy to a much larger degree than men, who may have viewed it as a compromise to their independence . But for women it was the safest way to start because it enabled a first-time proprietor to build her own business on the successful foundation that another had already established. Instead of risking the complete unknown, any businesswoman who utilized this strategy got started with a solid track record already in place and did not have to build her enterprise from the ground up. Lenient payment terms made getting started this way widely available. Thus buying out or taking over another person’s business contained both cost and risk, making it the best approach for the city’s new businesswomen. These start-up strategies tell us that when it came to how women commenced business, penny-pinching practicality characterized San Francisco’s female proprietors throughout the post–gold rush years. The costs were too high, the alternatives too few, and the risks too great to adopt any other approach .  How Women Started Businesses credit Luzena StanleyWilson had no money in , so getting herself, herchildren, and her stove from Sacramento to Nevada City, where she intended to start the El Dorado Hotel, seemed hopeless. But then Wilson met ‘‘a man with an idle team’’ who said he would take the party and offered...