Thinking about managing finances but not knowing the proper way to start, not to worry; take advice from these mindful women entrepreneurs.
Managing finances is one vital step to taking your business ahead, flourishing, and profiteering. It has often seen many women-founded businesses fail, because of the lack of information related to the market, following not knowing where to spend and the right time to fund.
The tactics for managing finances are not rocket science; you don’t need to spend all your days and nights looking for the right tips; all you need is a helping hand and the right guide to dictate which direction to choose.
Here’s some advice from successful female entrepreneurs who learned the art of managing finances by taking small steps every day and continue working on themselves to avoid unnecessary hurdles.
These are some kick-ass female entrepreneurs who have overcome misfortune and launched their own successful businesses. Show some support for this inspiring community of women, and check out their wisdom below!
Following Steps, Women Can Take Right Now To Help Their Business in the future.
Consider making some partnerships to align your business with others. We all have strengths and weaknesses, and at some point, you are going to need to turn to others for help and support, said Valerie Bihet, Director, VIBE Agency…
She further says that “if you do that in the beginning, you might be able to find someone who has the strength where you are weak, and together you can grow to something even bigger.”
“I had good credit personally, and that helped me a lot in the beginning, but credit should not be used as a substitute for having cash on hand. I use it if I need to help get through the month with payroll, expenses, etc., but it’s not a substitute for cash. There are times I need to pay vendors upfront, and that is where cash is needed.”
Start saving at an early age in life.
“You should begin saving as soon as possible in your life. Saving even a small amount will not only establish a habit but will also give you a head start. Over time, the power of compounding will work in your favor, and you may see exponential growth in your savings. Do not procrastinate and begin saving as soon as possible because you will require a smaller amount compared to a larger amount if you start later. Save first, then spend: The general rule of saving is to spend what is left over after you have deducted your savings from your income. Check your bank accounts: Most of us have multiple bank accounts.” Nikita Gupta Founder at Sprout and Press
Planning is vital.
“First, have a plan. Know the big numbers: basic expenses, revenue goal, set margin goal, salary goal, etc. A good business leader needs to have a clear vision of their numbers and what they are working towards in order to find the right ways to reach their goals and where to spend money, and how much needs to be reinvested in the business to sustain an economic crisis or simply finance future growth.” Valerie Bihet, Director of VIBE Agency.
Keep improving your financial skills and understanding of your finances.
“The third foremost tip for you is to take the time to understand the basics of accounting, such as how to balance your checkbook. Once you know your income and expenses, start making a budget- this will help you make sure that you allocate your money correctly before it’s gone! Then, make sure to stay within your predetermined limits.”
As you continue to grow, you can compare your growth rate against the industry average. If you’re doing exceptionally well, take some time to think about how you might improve- finding an investor or partnering with another company may be good options for growing even faster. If things aren’t going as well, look back at your budget and see what changes would be helpful. You may have been spending too much money in a particular area- you might want to take a few days and go through every expense category to make sure it aligns with your priorities.
The top advice that helped me on my financial journey was always knowing exactly where my money was going and then increasing the income that I had. Some of the best advice that helped me along the way is to be careful about entering into any large purchases right before you need more funds- it will make you feel more self-confident in your business if you can show that you are still growing—Paula Glynn Director of Search Marketing & Digital Strategy at Pixelstorm
Use different accounts for different purposes.
“Money management is the key to accumulating riches. One method is to divide the money into separate accounts for different purposes, assigning each account to a different aspect of your life and using it solely for that purpose. Then, assign a percentage to each account every time you receive money.”
Invest your money wisely rather than saving.
“Money is just too volatile to be solely concerned with saving. Aim to save money in order to invest it and earn more money. It is beneficial to be an active investor and, more importantly, to comprehend the method chosen.” Susan Melony, Editor-in-Chief at Best Hearing Health
Avoid buying unnecessary stuff.
“Thumb role: Female founders should keep to a set budget and avoid any unnecessary purchases. If the last two years have shown us anything, it’s that in uncertain times, every penny counts. When launching a business, it’s important to keep your expenses at an all-time low and only make purchases that will benefit your business. This means spending less on supplies, spending more time comparing prices for vendors and services you use, and finding budget-friendly ways to market your brand.” Lissele Pratt, Director & Co-Founder of Capitalixe
Setting a budget is important.
“Monitor your key numbers regularly. It’s a bit like a navigation system for an aeroplane! In the same way that a planes navigation structure utilizes its embedded computer system to constantly determine the various parameters of an aircraft’s flight position and orientation to keep its journey safely on track, you need to set yourself a budget at the start of each year, a goal, and some smart KPI’s that your team can work towards. From there, you need to regularly check that your projections are on track to reach your destination successfully.”
“Financial projections are vital to understanding where your business is heading and what you want to achieve as a business. It will also help you identify highs and lows in advance to allow you to factor them and deal with the issue before it becomes a much bigger problem.” Joanne Bell, Managing Director of Bells Accountants
Prepare for the unexpected:
“Whether you are a beginner or an intermediate, this financial tip saves everyone. Keep yourself prepared for the worst-case scenario by purchasing insurance for your business, life, and other valuable assets that could be damaged or destroyed, which could negatively influence your net worth. You should have emergency money set up for any job, production, or personal crises that may happen (this should be three to six months of your revenue).” Susan Melony Founder | Editor-in-Chief of Home Improvement/Kitchen/Bathroom Blog: Product Diggers
Get a banker at your side.
“A business banker can be a very valuable resource for your business, regardless of whether you are a male or female entrepreneur. When you seek financial support and help to grow your business, the better the relationship you have with yourself.”
“You can work with a banker to establish a solid credit profile, as well as to access capital if you are ready. As part of your business planning, a banker can assist with creating a solid financial foundation. Keep your banker updated on significant changes and successes in your business to build the relationship.” Erin Mastopietro, Founder of Dopedogtreats
Cash flow management should be your concern.
“Cash flow management is the number one finance issue small business owners face. It starts at the beginning, when you are working but not able to bill until the end of the month or project. It continues as your company grows and takes on employees and contract labor. As soon as you are able, secure a business line of credit. This means that you’ll need to establish a relationship with a bank or other financial institution as soon as possible. When our clients are late in paying – not often, but once is enough – we rely on that BLOC to pay the employees. The annual fee and interest are a small price to pay for sleeping well at night.” Joyce Kristiansson, Founder of Kristiansson LLC
What things a female entrepreneur needs to avoid?
Spending money when you don’t have a plan. Think of it like the Titanic. Valerie told us, “they could have avoided an iceberg if they had paid more attention upfront or slowed down a bit.”
Instead, they pushed ahead against the advice of others and sank. The same could be said for your business. If you try to grow too fast, you can lose control of the systems and the budget and end up throwing more money away by simply trying to keep up.
It’s important not to overspend. You can allocate 10% of your gross margin to marketing and 10% to overhead expenses.
Don’t make a high income for yourself. Take maybe a small portion and see what you have left in the business; then as you scale, you can increase your income. You need cash flow in order to actually operate the business and continue sustaining the marketing strategy that you have planned for your business’ growth.
There is certainly much to learn from successful female entrepreneurs in today’s ever-changing and challenging business environment.