Maybe you didn’t know, but October is National Women’s Small Business Month, celebrating women who work at being successful business owners. Maybe you also didn’t know that more than 10 million small businesses in the United States are owned by women. That’s encouraging news for female entrepreneurs. Like all business owners, though, successful businesses are built on successful financial habits. Even if you’ve been in business for a while, it’s a good idea to review basic best practices to make sure you’re staying on track for growth. Let’s take a look at four of these practices.
Keep the Budget
The word “budget” can bring up images of horrific looking ledgers and reports. Men and women alike find budgeting daunting. While certainly budgets are detailed, I like to think of them in simpler terms when discussing good practices. A business budget is a listing of how much money a business has and where the money is being spent.
A good budget will show you how your income and expenses change. You should be seeing changes taking place from month to month and year to year. Budgeting allows the business owner to see growth in concrete terms (which is a real morale booster), as well as notice any financial discrepancies that may come up.
As a business owner, you will need to review the budget regularly – not only the income, but the amount and types of expenses. The amounts of insurance, employees or taxes may change dramatically, depending on where the business is financially. Take a look at your budget today. Are you where you want to be?
Pay the Boss
As a business owner, of course, you’re the boss. But many business owners ignore their personal needs and return as much of the revenue back into the business as they can. Personal expenses do not go away, and by not paying yourself, you probably are putting your personal budget at risk. Pay yourself!
In the beginning, your salary may be budgeted to be just enough income to cover personal bills, food and other living expenses. As the business grows, successful owners pay themselves what they are worth, enjoying the fruits of their labor.
When paying the boss, remember there are no sick days or vacation days accruing, so consider rewarding yourself in other ways. And when thinking about what is a needed to cover personal expenses, don’t forget savings, life insurance, retirement and other elements that make for a solid benefits package and financial plan.
Remember the Taxes
Taxes seem to be an ever-changing expense, and the laws around them are also ever-changing. Business owners need to be prepared for many different kinds of taxes, such as income, employment, property, sales and more, many at the federal state and local levels. The kind of business you own will dictate when and how you pay taxes. As a business owner, you will want to make sure you have a good CPA to help you navigate the system.
Strong connections can make a huge difference for a business. For example, even if you don’t need capital right now, build a relationship with a banker or lending institution that has a track record of working with female entrepreneurs or who may have lending programs focused on women-owned businesses.
Connecting with other women business owners for mentoring and peer networking is another successful habit. Organizations such as National Association of Women Business Owners (NAWBO), The Small Business Administration’s Women Business Centers and local economic growth organizations offer workshops, seminars and mentorships with other successful female entrepreneurs. Some Chambers of Commerce also offer opportunity specifically for women business owners.
Finally, many women business owners work with financial planners. A financial planner who understands the unique needs of women entrepreneurs can guide you through the transitions that come with building a successful business, while helping you maintain a solid personal financial base. No matter which business you choose, seek a planner that you connect with, then work together to help you meet your goals.
Linden Oak Wealth Partners offers fee-only financial advising customized for women, in particular, women in transition. Our goal is to create an environment where financial planning is efficient, simplified and easy to understand. We want clients to feel empowered and engaged every step of the way. Please contact us to schedule an initial consultation today.
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