44 Simple Financial Steps Every Female Entrepreneur Should Consider
Starting a new business is no easy feat, but if you are determined to make your dream come true and simply don’t know where to start, it’s wise to begin with a gradual, step-by-step approach. Here are a few considerations as you embark on your new endeavor. These tips will help at every stage of building your business.
Work on a business plan
If you have not done this yet, I recommend putting your ideas into a business plan. This will give you structure and help you consider various scenarios. Think about:
What does your business do?
Who will your clients be?
Do you understand the markets you are entering?
Who are your competitors?
What is your competitive distinction?
What are the barriers to entry?
What business structure will you use?
What resources — financial and otherwise — are available to you?
How do you envision your growth over time? This can require some basic forecasting, so be sure to find reliable data about your industry, and list all assumptions you are making in your forecasting.
Do you need to secure funding or are you going to bootstrap your venture?
Consider different scenarios from base case (expected growth) to best case to worst case and plan for each.
If you are at the initial stages of planning for your business, this step is crucial to set you up for success. There is no such thing as over researching. Educating yourself is a big part of getting started, and it’s key you rely on reputable sources such as those I list below. These considerations will help you create a more formal business plan and set realistic goals for your business. Having a well-thought-out business plan will help with future lending needs you may consider, but it will also help shape your ideas into actionable steps.
Start networking online and in person
It can take time to develop a business plan and get a business off the ground, so if you have a regular job, consider keeping it while you are in this planning stage to help with your cash flow.
Leverage your contacts and network, network, network. Expand your network with like-minded individuals.
Look for and join local (or national) networking groups on LinkedIn, Facebook, or elsewhere that might benefit you or your business.
Check for local meetups in your area. Bounce ideas off other female entrepreneurs and learn from their experiences.
Access resources targeted at female-owned businesses; this can be a powerful networking opportunity and you can most likely access financing options, grants, and other programs. One resource is Small Business Administration (SBA). The SBA helps all small business owners, but has programs for women entrepreneurs to launch new businesses and compete in the marketplace. There are a number of training and funding opportunities specifically for women, and the SBA website also lists other organizations focused on training, education, networking, and funding for women-owned businesses.
Measure your Key Performance Indicators
Set performance metrics. These can be known as key performance indicators (KPI), and they will help you stay on track. It is essential to understand your business using data metrics.
What is driving profitability — or lack thereof?
What are your biggest expenses?
Which expenses are fixed and which are variable?
What are your margins (or profits as a percentage of your costs) compared to similar businesses in your field?
Identify any bottlenecks. What can you do to improve efficiency?
What are your current and future cash flow requirements?
Stay flexible and follow the data. You will know when it is time to pivot or adjust your goals.
Build confidence as a female entrepreneur
Don’t be afraid to ask for help. Starting your own business can be overwhelming, but your trusted network and inner circle are there for you at times of stress.
Can you reach out to family and friends for assistance?
Similarly, do you know another trusted contact that can help provide a different perspective?
What activities help you decompress and re-focus?
Believe in yourself. As women, we tend to doubt ourselves at times.
Know your worth and project your confidence.
Can you practice your pitch with your inner circle?
Be assertive. Can you run through different worst case scenarios and role-play your responses?
What is the area where you feel most out of your comfort zone? Practice will make perfect.
Be patient. Rome was not built in a day. There will be good and bad days but keep moving forward. Building a business takes time, but you will get there.
If you are not comfortable with negotiations, I suggest honing your negotiating skills. As a female entrepreneur, you will need to constantly negotiate — with your own team as you build it or with external service providers.
Are there any negotiation workshops you can participate in?
Who is the toughest negotiator you know? Can you ask for tips from that person?
Do not be afraid to ask for what you want.
Have a clear sense of what your brand represents. What needs are you solving for?
What is the distinctive value of your services?
Surround yourself with a team of experts
You cannot do it all by yourself. You have a vision and you’re executing on it, but you need to have access to experts that will help you with other areas such as accounting, marketing, and planning for your own future.
An experienced CPA will be a key asset to have as your business grows.
Partner with a knowledgeable wealth advisor for other moves you can be making on the corporate or personal side and to consider your financial picture in a holistic manner.
Ensure you have a retirement plan
Don’t ignore saving for the future.
If you are self-employed, you will not have access to typical corporate benefits such as a 401(k), but there are many options for self-employed individuals such as a Solo 401(k), a SEP IRA, and a few other options that can help you save for retirement. Also, if you begin to have excess liquidity — meaning you have cash to invest — you’ll want to discuss and understand different options, and the pros and cons of investing excess funds with your financial advisor. [Editor’s note: for retirement tips for women listen to veteran journalist Mary Beth Franklin, CFA, in SheVentures Episode 101]
You can discuss liquidity needs for the short, intermediate, and long term and invest your money accordingly. For the short term, you can discuss a laddered treasury bill portfolio with your wealth advisor.
For intermediate needs, a high-quality fixed income portfolio with varying maturities and some exposure to blue chip stocks might make sense.
For longer term investing, your wealth advisor can construct a portfolio that aims to meet your growth and income goals.
The Bottom Line
Starting a new business isn’t easy. Be tenacious. Do not give up and do not take no for an answer. You got this!I hope these suggestions will help you on your journey.
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This expert produced this original thought leadership piece free of charge to SheVentures. This expert values educating female entrepreneurs and the SheVentures community. SheVentures is not receiving affiliate compensation from the author/expert. Questions? Contact social@sheventurespodcast.com.
