5 Financial Mistakes Women Business Owners Make
How to Avoid Them
1. - Failure to plan. - Like the wise saying goes, “If you fail to plan, you plan to fail.” It’s especially true for women-owned businesses. Fewer than 10 percent of all businesses both new and established take the time to create a plan.
2. - Not managing accounts receivable. - Small business owners are consistently challenged by accounts receivable. You know your customers are going to pay you, however, it may take 60 or 90 days for them to do so. The challenge is that your vendors want to be paid within 30 days. Obviously, planning and budgeting make managing this process easier.
3. - Making personal guarantees. - Business owners should, if at all possible, avoid personal guarantees. While banks advocate for them, as an entrepreneur, you’re already investing a huge amount of your personal assets into your business. If you have trouble getting financing, look into other options and evaluate your current plan and approach. It may save you from financial and personal trouble down the line.
4. - Doing everything themselves. - When you’re starting your own business, relying on your family and friends is a natural inclination. Remember that you get when you pay for. Find people who know the business and have experience with companies.
5. - Avoiding a working knowledge of financials. - While hiring a team, in-house accountant or meeting with a CPA is important, it’s still key that you have an understanding of your finances. Knowing the basics allows you to monitor your progress in between sessions with your financial counselor and puts you in a position to spot any problems should they arise.
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Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.
Advice for women entrepreneurs.
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