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 but may also 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, you need an in-depth understanding of business, accounting, and financial planning. Regardless of 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 — you may learn a lot from teaching others.
Adequate cash flow is a challenge for almost all new businesses. When you launch your business, have a safety net in place. For many burgeoning entrepreneurs, that means keeping your day job until your business is thriving. In other cases, you may need to bring on more investors, set up an emergency line of credit, or take additional steps to avoid running out of cash.
There is a strong emotional element to finances. People have psychological relationships with money that often dictate how they manage their money. For instance, people with a strong tendency toward short-term satisfaction often struggle to save and may spend impulsively. However, this psychological element may make these people 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. Get to understand your psychological feelings toward finances. You may manage your personal and business finances more effectively if you know your emotional side.
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. As a woman, it may be tempting to put your needs aside and take care of everything and everyone else first.
You may avoid this pitfall if you invest 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.
You have to spend money to make money, but often, in business, that means 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.
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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