Money is the scorecard of business success. In honor of National Women’s Small Business Month, we asked women business owners to share their best advice about managing business and personal finances.
What’s your best advice about business financial management?
Rachel Braun Scherl, Managing Partner/co-founder, SPARK Solutions for Growth, a company that designs and implements practical strategies for accelerating business growth
Often you are going into meetings where the men in the room assume you won’t be on top of the financials. Be rock solid in terms of the business drivers and numbers of your business. Know your P&L, balance sheet, lifetime customer value and other key numbers backwards and forwards.
Joanna Sobran, CEO, MXOtech Inc., an IT consulting company based in Chicago
Negotiate multi-year contracts with your customers. This has given my organization long-term financial stability, allowing [me] to plan for the future and form a foundation for strong relationships. In 13 years, I have not had to borrow money.
Deborah Sweeney sold her business, MyCorporation, to Deluxe in 2018 and still runs the division.
Be keenly aware of the ROI on all investments and business initiatives, whether that is hiring, marketing, investing in technology or taking on a new business partner. Understand your measurements of success. Do more of what gets you a higher ROI; cut the lower ROI initiatives.
Donna Miller, founder, C3Workplace, a provider of coworking, consulting and educational programs for B2B professionals
Understand what your numbers mean and how they can be leveraged to drive the growth of your business. Learn to (or hire the skill to) think in Excel. All business decisions should start with solid financial data (which will allow you to find the most profitable projects and markets consistent with your company's products and services) and marketing data (which will allow you to determine the proper demographics, psychographics and trends that align with your company's products and services).
Felicia Kelly, founder, Cyrus Anointing Consulting, a personal and professional development company
Double your expense projection and cut your sales projection in half. This is not to say you should lower your goals. In fact, this method gives you the opportunity to always come in below budget and above revenue projections so that the time it takes to turn a profit is significantly shorter.
Lozelle Mathai, CEO, Closing Your Books LLC, a financial accounting consulting firm focused on women-owned businesses
Have a yearly budget broken out monthly. The budget should be in line with business goals, should include a significant reserve, and should be reviewed monthly. This ensures all facets of the business are financially on the same page.
Laura Spawn, CEO and co-founder, Virtual Vocations, the largest hand-screened database of telecommuting jobs online
Pay yourself first. Without a traditional job that provides retirement benefits and easy ways to save, it’s even more essential for business owners to plan for the future. Whether your business is flourishing or whether you’ve hit a plateau, make sure you add something to your savings account, IRA or other retirement fund every month.
Sobran: Set yourself up for success by not putting all your eggs in one basket. Diversify your investments with the help of a financial advisor who can help you make more informed investment decisions. I have put together a “life plan” with my financial advisor, creating a holistic approach to my finances that balances my life and business goals.
Kelly: Understand that starting a business does not solve your money problems. How you handle money is typically exposed and amplified once you start a business. It’s important to master your personal money management upfront, or your business finances will be just as much of a burden as your personal finances.
Miller: It’s low tech, but it’s life-changing: Establish a firm budget that allows you to live within your means.
What’s your best advice about getting outside financing?
Sweeney: Maintain a strong [personal] credit score. The way you handle yourself personally is also how you will likely handle the finances of your business. You are a much more creditworthy candidate for financing when you can show that you can manage your personal finances well.
Scherl: Raising money is about telling a story that is motivating to your funding targets. Your audience will be listening from their own points of reference, areas of expertise and investment thesis, so one size does not fit all. Your passion for the business, knowledge of the market, awareness of competitive opportunities, points of differentiation and business strategy should be presented with awareness of and through the filter of your audience’s specific perspective.
Sobran: When you apply for funding, you don’t want to be another name on a piece of paper. Create relationships with your bank and other financial institutions. When I was building my business and needed outside financing, I made sure to consistently communicate all business updates with the organizations I worked with. I was transparent on my business growth and overall vision. I expressed my commitment and made sure to show my sincere character. It made all the difference because I formed relationships with people who believed in my organization.
About Rieva Lesonsky
Rieva Lesonsky is CEO and Co-founder of GrowBiz Media, a custom content and media company focusing on small business and entrepreneurship, and the blog SmallBizDaily.com. A nationally known speaker and authority on entrepreneurship, Rieva has been covering America’s entrepreneurs for more than 30 years. Before co-founding GrowBiz Media, Lesonsky was the long-time Editorial Director of Entrepreneur Magazine. Lesonsky has appeared on hundreds of radio shows and numerous local and national television programs, including the Today Show, Good Morning America, CNN, The Martha Stewart Show and Oprah.
Lesonsky regularly writes about small business for numerous websites and for corporations targeting entrepreneurs. Many organizations have recognized Lesonsky for her tireless devotion to helping entrepreneurs. She served on the Small Business Administration’s National Advisory Council for six years, was honored by the SBA as a Small Business Media Advocate and a Woman in Business Advocate, and received the prestigious Lou Campanelli award from SCORE. She is a long-time member of the Business Journalists Hall of Fame.
Bank of America, N.A. engages with Rieva Lesonsky to provide materials for informational purposes only, and is not responsible for, and does not guarantee or endorse any of the third-party products or services mentioned. All third-party logos and company names mentioned herein are the property of their respective owners and are used under license from Rieva Lesonsky.
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