An empowered female entrepreneur builds her success with strong business foundations. Being knowledgeable and proactive about the concepts that worry you, including finances, will significantly help your business.
Having a basic understanding of finances is fundamental for any small business, but practising financial skills is a surer way of succeeding in a competitive business market. It’s important for female entrepreneurs to not only understand the ins-and-outs of finances but to have supportive foundations and systems in place when taking on the risks of entrepreneurship.
This belief is one of the core fundamentals of Financially Empowered; my purpose is to ensure business women are equipped with the financial knowledge they need to propel their small business towards triumph. By following these basic steps, and building on them later, you can set your sights on a little more entrepreneurial stability.
So, let’s not shy away from this any longer! If you’re ready to start or strengthen your entrepreneurship, here are my 6 best basic finance tips for every entrepreneur:
1. Find the Right Insurance
Insuring your entrepreneurship is important, but choosing the right insurance policy is paramount. If you already have a policy, review it. If you’re unsatisfied, start searching other insurance policies.
Have you advised your insurer of any changed circumstances that could potentially affect your premiums?
Have you sought advice and quotes from more than one broker?
The worst time to find out your under-insured is after an incident occurs when you’re trying to put a claim through.
2. Consider Superannuation
If you’ve ever considered superannuation, you may have one or multiple super funds already in place. Did you know that the less super you have, the fewer number of super management fees you incur, ultimately leaving more money for future investments?
It may be in your interest to contribute extra super in addition to the mandatory 9.25% super paid by your employer; however, find out and understand the tax implications of this before doing so. It’s important to also check for any lost super by going to www.ato.gov.au/Calculators-and-tools/SuperSeeker
3. Set Detailed Financial Goals
Just as you plan out your business, your marketing, your growth, put some thought into your financial goals. What are your goals for your business, as well as for your personal finances? Maybe you’re aiming to buy a house for you and your family, but you vaguely have a set price range.
Establish goals and their deadlines. You could aim to save $50,000 towards a house deposit by the end of this year, but the attainability may be dependent on how much you profit. So, you could increase sales by 10% in the next 3 months as a means of profiting strategically in order to save $50,000.
Know your goals, and figure out how you will make your business adapt to work towards them.
4. Avoid Bank Fees
Review your current bank accounts and figure out if they are suitable for your business and personal life. Can you get the same, efficient service for cheaper using a different bank?
If you are a start-up company, certain banks will waive the monthly bank fee from your account for up to a year. Talk to your bank representative and see what kinds of accounts are available. There are also simpler ways of avoiding bank fees as well, such as using ATMs only affiliated with your bank.
5. Budget Effectively
You work hard for your money so you can support yourself, your loved ones, or those who benefit from your small business. Make a plan on how you will spend and preserve your money.
When you don’t budget, you can potentially spend carelessly, further depriving yourself the financial umbrella you may need on a rainy day.
When budgeting, take your entrepreneurial and personal goals into account. Ask yourself if you need to make changes in your business as well as in your personal life. Work out your budget on spreadsheets. The way someone spends their money is a reflection of their values, and if you value your small business, budget effectively and with care.
6. Seek Advice!
This is probably my very best finance tip entrepreneurs!
Because many of us are so good at juggling, learning new things, taking on more responsibility, sorting out how we’re going to handle it all, it can be easy to fall into a trap of not asking for help when you need it.
If you are unclear about anything in relation to your finances; be it taxes, savings, debt elimination, or investments, speak to someone trustworthy. Confide in bank representatives, financial advisers, or entrepreneurial organisations.
You can also learn from others’ mistakes by reading books and keeping up to date with financial magazines. According to Entrepreneur Magazine, some of the common qualities among successful small businesses are financial planning, practised strategies, and a work-life balance.
You could also read testimonial articles about other entrepreneurs’ experiences.
Your response and recovery from your mistakes define you, not the mistakes themselves.
There’s probably never been a better time for women to start a small business. We’re connected, we’re savvy, and the statistics show we’re having great success.
But, as all small business owners do, we face challenges. Having a strong foundation and system set in place depends on an entrepreneur’s financial strategies. There are the basic finance tips every entrepreneur should follow, but there are also entrepreneurial organisations that can help you work on your business strategies and systematic functions.
My mission at Financially Empowered is to teach women how to gain the confidence and financial skills needed to sustain their small businesses in an ever-growing competitive business world. I want to see us all flourish and shine bright. The female, entrepreneurial empowerment movement is growing, let’s get advice from each other to really help our business.