Women entrepreneurs do not need to watch television or listen to the radio to understand that there is a debt crisis because they have always been more likely to fund their businesses with credit cards than men. Access to capital for women entrepreneurs hasn't improved much since it was the headline around the country when women began starting more businesses than men in the late 1990s.
Today, however, entrepreneurs of both genders watch in amazement as the government tries to pretend that it can continue to spend money it doesn't have to grow a government (business) that has no plan to repay the debt.
Yes, I am making the business vs. government analogy of income vs. expenses - in other words, you can't continue to spend more money than your business can generate in revenues.
The first need for money for every women entrepreneur will be for startup costs, and these generally can take a year or more to recoup. Here's where our analogy with our current government plays out. You as a small business owner will find it difficult to get funding for these costs. Banks don't like funding startups. You are not like the U.S. government - you cannot spend money you don't have and particularly money that you don't plan on paying back. I promise you your credit card company will come aknocking if you do not regularly pay down your startup debt.
Next every startup must develop a budget based on your assumption for income and expenses. Of course, projecting what your expenses will be monthly is similar to creating a home budget. What bills will you need to pay? Rent, utilities, technology, payroll, payroll tax, health insurance, other insurance, legal, accounting, marketing, entertainment, travel, automobile gas/repair, office expense, consultants, postage, bank charges, credit card charges - these are the basics. Depending on your business, you will also have to estimate costs of goods, packaging etc. The more honest you are with these figures the more likely you are to succeed in NOT going into debt.
The hardest part of developing a budget for your business is making the sales assumptions. Since you are just starting you need to guess at how much you will sell and how quickly your business will ramp up. For example, if you are opening a graphic design firm you must estimate how fast you can bring customers in and whether or not you will charge them as a project or on retainer. Yes, you MUST make these decisions before going out and selling your service. Why?
Because you need to figure out how much you need to charge in order to cover your costs (expenses) and make a profit! For example, if you know that your business expenses are $3000 per month and you plan to begin your business as a sole proprietor (no employees) you need to plan to consider a dollar amount for your time to create a true picture of how your company can grow.
3 clients at $1000 per month retainer may sound like your are breaking even, but since you are doing all the work you must make sure that you haven't exhausted your time for growing the company.
Too often this is where entrepreneurs, particularly women entrepreneurs, make their biggest mistake. Your time is a commodity just like all your other expenses. You must be a value on it and make sure that that value is always included in pricing your service -- and sometimes in your product. You will only be able to hire employees if you have put a monetary value on the time it takes to deliver your product and/or service as this will be the money you'll need to pay that employee.
If you plan your business carefully and accurately you will not be tearing your hair out like the U.S. government is currently doing because you are unable to pay your debt. There is no reason to have debt if you monitor how much comes in and how much goes out. You can tighten your belt when and where needed and make do with less until business picks up. You can work smarter and ask your vendors to sharpen their pencils so that they are your partners in business and what's good for them is good for you.
Please take a lesson from our current government's lack of leadership and take control of your business by keeping your eye on your finances and not pushing off for tomorrow what you need to accomplish today. It is your leadership as a savvy women entrepreneur that will get this economy running again. I believe in you.
