Women own nearly 20% of the businesses that employ people in the United States, and countless more women run their businesses without employees. There are over one million women-owned firms. They employ over 10 million people and generate nearly $1.8 trillion in revenue annually.1
If you are a female entrepreneur, you help create these stunning statistics. You also may face interesting challenges with personal and business finances. To analyze your finances as a female entrepreneur, check out these tips.
To master your finances as a female entrepreneur, consider developing an in-depth understanding of business, accounting, and financial planning. Regardless how much you know, there is always more to learn. Subscribe to financial newsletters or business journals, sign up for seminars, and consider looking for a successful female entrepreneur to mentor you. After your success, consider mentoring an up-and-coming business leader — we can all learn a lot from teaching others.
Have a Safety Net for Your Cash Flow
Adequate cash flow is a challenge for virtually all businesses. When you launch your business, have a safety net in place. For many burgeoning entrepreneurs, that can mean keeping your day job until your business is thriving. In other cases, you may want to bring on investors, set up an emergency line of credit, or take additional steps to avoid running out of cash.
Address the Emotional Side of Finances
There is a strong emotional element to finances. Feelings about money that often dictate how people manage their finances.
For instance, people with a strong tendency toward short-term satisfaction may struggle to save and may spend impulsively. But that psychological element may make those people more decisive business leaders.
People who tend toward long-term satisfaction might save more easily, but they may miss out on opportunities because they are afraid to act quickly.
To manage your personal and business finances more effectively, understand your psychological feelings about money.
Invest in Yourself
You are the leader of your business. You are the core talent that is going to make your organization thrive. Honor and respect this role in your company by investing in yourself.
Many woman are tempted to put our own needs aside and take care of everything and everyone else first. Avoid this pitfall by investing in yourself.
Commit to getting enough sleep, relaxing, and treating yourself once in a while. You may have more energy and creativity to pour into your business if you feel good.
Safeguard Your Credit
It’s often said that “you have to spend money to make money”. In business, that may mean borrowing money. A strong credit rating is essential for a successful business owner. You can borrow money more easily and at cheaper rates when you have good credit.
Poor credit may make it difficult to grow your business. Take steps to improve your personal credit rating. Then, as your business establishes its credit score, stay on top of your bills, do not use up all of your credit lines, and monitor your credit score.
Strong finances may support your business. Keep an eye on your financial health, and commit to improving and learning more. As needed, pull in people or resources to help you. Sometimes, seeking advice from a financial professional is a strategy to consider for you and your business.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
1 Women Business Ownership in America on the Rise, The United States Census Bureau, https://www.census.gov/library/stories/2021/03/women-business-ownership-in-america-on-rise.html