It's not often that a new business unit can turn a profit in its first year of operation. But Harris Trust and Savings Bank did it with a lucrative market: women.

In February 1991, Judith M. Phillips, a vice president at the Chicago-based bank, formed a four-person team whose sole purpose was to fund women entrepreneurs. Within one year, she said, the unit was in the black and customer demand was growing.

"This is a terrific market with tremendous growth potential," Ms. Phillips said.

Indeed, 50% of all small businesses in the United States will be owned by women by the year 2000, according to Helen S. Brown, program coordinator at the Women's Business Development Center in Chicago.

The Harris bankers found that they had tapped into an aggressive and somewhat angry market. Many female business owners felt their banks "did not take them seriously," Ms. Phillips said. Their banking needs, however, were as diverse as those of male business owners, she said.

The bankers limit their marketing to businesses with depository and credit needs of over $100,000 "because under that amount would not be profitable for us," Ms. Phillips said.

Customers include established businesses and start-up companies.

The Harris team makes contacts the conventional way - by learning the turf. Ms. Phillips and her team, which includes one man, regularly attend meetings of professional groups, such as Women Construction Owners and Executives and the local chapter of National Association of Women Business Owners.

Personal Attention

The Harris unit aggressively pushes loans and refers clients to the bank's trust and cash management departments. But nurturing relations with a burgeoning class of entrepreneurs demands a lot of personal attention.

The bankers call their female customers "at least every two to three weeks" to determine "what's going right and what is not with their business and with their relationship with Harris," said Ms. Phillips.

Loans, of course, continue to be a big part of the business.

"Many of the women business owners we see can afford and should borrow to build their businesses, but they don't," said Ms. Phillips, who previously worked as a lending officer in Harris's middle-market segment.

She also said that the women, like many of their male counterparts, tend to ignore their personal circumstances in the early stages of building a business.

"Many women finance their businesses solely from cash flow, plowing everything back into the business and leaving little for their personal accounts," Ms. Phillips said.

Harris, which tracks new business generated from the women's unit in its Community Re-investment Act records, last year made a determined effort to increase its outreach programs to various minorities after receiving a "needs to improve" rating.

"I don't know whether it was a consideration in getting the program started," Ms. Phillips said. "But it certainly didn't hurt."

As part of its nurturing, Harris offers numerous seminars on subjects like personal finance and estate planning. Some have a distinctly feminine slant.

Next week, for example, Ms. Phillips will treat her clients to an early-morning fashion show at the Marshall Field department store, then follow it with a seminar on personal finance.

And if her customers need advice the bank doesn't offer, like developing a business plan? "I will direct them to a group such as the Women's Business Development Center, which conducts seminars on the subject," Ms. Phillips said.

She also urges clients to speak up if bank services fall short.

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