Recently I attended a webinar for small women-led businesses, on how one can start their entrepreneurial journey and build their brand. During the session the speaker asked the participants to mention one business related task or activity that they find most daunting. To surprise (or actually not so!) most women in the session wrote about things related to money and finances.
It is not just about this one session or group of women. A survey conducted by MYRE Capital, revealed that only 27% of women make their own financial decisions. Another report by PayNearby’s Women Financial Index (PWFI) showed that 74% of women still depend on family members when navigating investment decisions.
“Mujhe apne pati se poochna padege.” (I need to ask my husband) or “Mujhe apne bete se baat karni padegi iske baare main.” (I would like to talk about this with my son once) – Statements like these are commonly heard from women homepreneurs and those with small businesses. Call it years of conditioning or just lack of knowledge, when it comes to financial knowledge and decision-making most women lack a certain confidence still.
So keeping this in mind, we asked some Business coaches and finance experts to share with us some simple finance tips for women entrepreneurs to know. These tips would help women-led businesses build a stronger relationship with finance and money management.
#1. Set clear goals and create a budget
One of the first steps women entrepreneurs should take when it comes to finances is to set clear financial goals and budget.
Priyanka Bhatia, the founder of WOW (Women on Wealth), underscores the necessity of having clear goal in mind when it comes to your business. “Define your short-term and long-term financial objectives for your business. And, establish a budget for your business expenses, including overhead costs, marketing, and salaries,” says Priyanka.
#2. Know your numbers yourself
Whether you are relying on a family member or accountant when it comes to financial advice, as a woman entrepreneur you should know your numbers yourself. This is something that Business mentor and sales coach, Neetu V. Bansal also reiterates. “I understand that many women entrepreneurs find this uncomfortable, like looking at a school report card, but knowing your numbers is essential.”
Neetu explains that you don’t need a finance degree to do this. Start with a simple income and expenditure statement to track your daily cash flow. Expand this to monthly and yearly totals to get a comprehensive view. This helps you monitor the results of your day-to-day operations.
It’s the only way to see if you’re succeeding or if there are areas that need improvement. As a woman business owner, you should know your monthly earnings, expenses, and net profits.”
#2. Understand and Own Your Numbers
Just knowing your numbers is not enough, you need to track them, understand them as well as own them, especially if you have a small business.
As Neetu Bansal explains – “Start with your goals. How much do you want to earn? What sales targets do you want to hit? How many customers do you want to serve? How much do you want to save and invest? Recording these goals gives you direction and purpose. Imagine marathon runners without a finish line – how would you know who won or who needs more training?
Next, track your daily, monthly, and annual progress against these goals to ensure you’re on the right track. This is the time to analyze what’s working and what needs improvement. This habit is key to creating sustainable success for your business.” This is something that you can start doing immediately and slowly start learning more about as you go.
#4. Build emergency funds
As a woman entrepreneur who is just starting out or have a small business, there are a lot of things that might not go your way. First year is always a journey filled with struggle and learnings for many businesses.
Priyanka Bhatia tells us, “Prepare for unexpected expenses or downturns in your business by setting aside emergency funds. Aim to have at least three to six months’ worth of expenses saved up.”
#5. Don’t ignore Marketing
A key finance tip that Nishita Mantry, a business coach for women solopreneur shares with us is related to the importance of marketing for small businesses.
“While budgeting on your business plan, always keep 20% of funds for marketing. Most businesses fail due to lack of funds for marketing,” says Nishita.
Many home-based businesses especially fail as they forget the importance of right exposure. Marketing is a crucial expenditure if you wish to grow your business that you cannot afford to overlook when it comes to creating your financial plan.
Conversation around finances and money management may seem daunting, but if you wish to grow in your journey as a woman entrepreneur, you must learn some of the basics. “Numbers are the language of business. You have to understand them to ensure success for your business,” says Neetu V Bansal. And this is especially true for small women-led businesses.
Also Read: Changing or restarting career after 30s – Stories of real women who made it happen
Also Read: How to build a strong Personal Brand as a Woman Homepreneur