Women entrepreneurs face unique funding challenges when it comes to money management—specifically getting the money they need to start and run a business.
For all of the women entrepreneurs below, solid money management comes down to common sense and understanding that just like growing a business, business finance is a journey, not a destination.
Let's have a look at the key themes that empowered these women to improve their money management skills so you can, in turn, improve your own.
Leaving Debt in the Dust
Debbi King wasn't always the personal finance pundit she is today. Twenty-one years ago, she was a single mom making $10,000 a year with $200,000 in debt looming over her head.
“Even though I had a degree in accounting, I never learned the key elements to money management," says King. “The biggest element? How to handle the emotional side [of money]."
King's journey took her down a path towards financial savvy, and today, she's a published author in the personal finance space and runs a debt-free business. Her own desire to help other people avoid the money situation she found herself in created the foundation for her now-thriving business.
King tells her clients that money management is 10 percent financial and 90 percent emotional. Have a solid look at your business (and personal) spending decisions, why you make them and when. Knowing why and how you spend money can help lead to better decisions earlier on in your business and help avoid having debt threaten the future of your business.
Trading Cost for Value
When you're busy growing a business, you're looking to save where you can. This can lead to money-saving decisions that can hurt your business and cost you future business.
Early in Laura Gassner Otting's consulting and speaking career, she might have booked the cheapest red-eye flight for her next-day speaking engagement.
"Sure, taking the red-eye was cheaper but I was going to be in terrible shape for my clients, and that wouldn't lead to bookings," she says.
Now, she makes it a practice to fly in a day in advance (not to mention booking a fully-refundable backup flight) so she has time to rest and refresh. With a book about to hit bookstands and a speaking tour lining up, this practice alone helps keep her refreshed and speaking at the top of her game.
Look at the ways you try to cut corners and save cash with your spending. If spending a bit more on a flight so you're rested for a meeting gives you a better opportunity to book the gig, that's money well-managed and directed towards the ongoing growth of your business.
Seeking Out Mentors
Sometimes it would be nice just to have the advice of someone who's been where you are and can tell you how they got through the situation.
King long overlooked the people in her life who were the most admirable with their money management: her parents and her grandmother. Studying their behaviors and belief gave her models to help shift her own financial practices.
There's nothing wrong with a second set of trained financial eyes on your revenue and expenses to help you build a money management strategy that's made to last.
Local chapters of women's business groups or even your local chamber of commerce can put you in touch with fellow business owners who could have just the financial advice you need.
You can also look to the people in your circle of family and friends like King did to find practices close to home that you can emulate.
Diversifying Access to Capital
Three years into starting Derma Health Skin and Laser, founder and CEO Trish Gulbranson felt she had her money management strategies on lock. She began her career as a CPA and then became another company's CFO. Handling her own business finances was a breeze.
“I was humming along and using a line of credit for the times that I had any cash flow fluctuations," says Gulbranson. “It was working well until the housing crash of 2008 happened."
Gulbranson discovered that even though her business had good credit and good payment history, the bank shut down her lines of credit immediately and without notice.
“Keep in mind that just because you have good credit, it doesn't mean you're safe."
When creating a money management strategy for the future of your business, make sure that you diversify your access to capital. This can help prevent cash-flow problems like what Gulbranson encountered and keep the cash flowing even during lulls.
Working capital loans and invoice financing are common financial tools that may help with cash infusions.
Next Steps for Smart Money Management
Wherever your money management strategies are today, there's always room for improvement. The tips above show that financial missteps can have a lesson waiting in them.
The one thing that everyone agreed with was the importance of hiring a money management pro to have your business' back. (As you can see, even the trained financial professionals had room to learn.)
Finding a trusted advisor to outsource your finances or come in for quarterly check-ups can offer significant assistance. There's nothing wrong with a second set of trained financial eyes on your revenue and expenses to help you build a money management strategy that's made to last.
Read more articles on managing money.
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