Financial Mistakes Women Business Owners Make
And 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.
Your business plan is your overall blueprint for success and a financial plan is an important part of that. Your plan should include income, expenses and overall cash flow forecasts. Companies most often fail because they have no plan to measure progress against and don’t see roadblocks coming.
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. You’ll also need to make collections calls. Despite your efforts, particularly in the current economy, you may still not get paid. Another option is Accounts Receivable Insurance that gives you more leverage. After an account passes 60 days, it gets turned over to the insurer, who handles it from there.
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 small companies. Check with your fellow NAWBO members for leads or referrals on someone who has worked with other women business owners. “The single biggest mistake that I see women business owners make, is not securing a really good accountant and business financial advisor,” says Carla Bainbridge, President and CEO, PredictiveProfiles. “Pay the extra money, and do not chance on this necessity.” Small Business Builder Maria Marsala, Elevating Your Business agrees, “Not asking for help because “we know what to do” or trying to do it all is a huge mistake. Get good help upfront.”
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.
Read the full article at: nawbo
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.
Financial strategies for small business.
Business consulting for women entrepreneurs in Houston, Advice for women entrepreneurs, Business Coach in Houston, Growth strategies for small business, Business continuation for women, Growth for women-owned businesses, Houston business coaching, Financial strategies for small business, Small business consulting in Houston, Business management consultant, Business, Consulting, Women, Entrepreneurs, Houston, Coach, Growth, Strategies, Coaching, Continuation, Owned, Owner, Financial, Consulting, Management,
