by Rieva Lesonsky

 

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. women owners tips couch pic.jpg

 

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.

 

What’s your best advice for personal financial management?women business owners pic.jpg

 

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.

 

 

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.

 

Bank of America, N.A. Member FDIC. ©2019 Bank of America Corporation

Similar Content