Women entrepreneurs have a tremendous desire to give back to others. Many women start off their businesses with a plan to give a portion to a charitable cause long before making their first dollar. Too often this plan, even though it is carefully crafted into the business plan, can be the catalyst to business failure. Why?
No one wants to hear that being charitable can actually be bad for business, but as a business coach I must encourage my clients to focus only on the startup, growth and success of the business, at minimum for the first five years. Launching a business is difficult and generating enough revenues in order to pay back the startup costs and allow investment to grow the company happens in less than 10% of all startups. A savvy entrepreneur separates her personal desire from what is best for her company. Companies need cash like babies need milk. If you take away a new born's nourishment to share with others you'll have a screaming, malnutrition infant on your hands. Unfortunately, the first year of a business, or an infant, requires extra investment after delivery. This is the critical 'do or die' stage when the smallest mistake or lack of attention can lead to extinction.
Cause marketing is another method where businesses can work to pay it forward to charitable causes while at the same time promoting the business. This often is a win-win for business and charity, but generally not for a startup business. Startups must keep the blinders on as they navigate the waters of finding their niche. If a startup aligns itself too early with a cause that is not identical to its mission and with its target market, the new business loses its opportunity for the buzz. All startups have a chance to get some early media interest: web, print, tv, radio, social etc. Don't blur this buzz with that of a charitable cause.
Women entrepreneurs must restrain their desire to help others while launching a startup. The business needs every ounce of energy, time and cash available in order to succeed. Once the business has reached a point where revenues exceed expenses day after day, month after month and year after year, then and only then, should the business develop a pay it forward model.
If you can launch a winning business you will have plenty of opportunities to give back. You may even choose to launch a foundation arm to your business which is, in many ways, is a business of its owned (nonprofit).
We all want to support our community and help out in special ways. Entrepreneurs often get a chance to do this uniquely. But take heed that during the early years of your business you should pay it forward only at the end of the year with personal income after you have made the appropriate investment into the business to keep it growing. The more successful your business becomes the greater gift you will be able to give the world.
To all women entrepreneurs who desire to pay it forward - remember you can begin doing this every day by supporting other women in business as when one woman wins all women win.