Did you know that today, more women than men are starting businesses?
It’s a good new/bad news kind of a story though.
YES! We’re starting businesses, and that’s incredible. However, women-owned companies tend to employ fewer workers, have lower revenue and less profits than male owned companies.
According to Womenable’s 2016 State of Women-Owned Businesses Report, there were 11,313,900 woman-owned business in the nation, but the average number of employees (beside the owner) is .8. That’s not even a whole person.
Imagine, if only 5% of women-led companies hired ONE employee, we would create 565,695 jobs. Imagine if it were more.
But there’s a very real barrier which is preventing that from happening. Regardless of how long they’ve been in business, most women entrepreneurs identify their number one skills gap as deficiency in finance, accounting and math. WE NYC Research
Whether due to perception or an actual skills gap, this belief weakens women entrepreneurs in so many ways: It affects their ability to set a competitive price, navigate financial reports and confidently sit at a negotiating table.
So, even though it’s an exciting time to be a woman in business—we have a lot of ground to make up before we reach our financial and economic success potential.
Honestly, I didn’t set out to build CFO on Speed Dial to specifically serve women entrepreneurs. But I am of course a woman entrepreneur, so I instinctively speak to women entrepreneurs in a way that mirrors our shared experience. The result: 90% of my client companies are led by women.
Closing this (real or perceived) financial skill gap and supporting financial and economic success for women entrepreneurs is a foundational pillar of the work I do. I know it is the key to reshaping economic power.
There are many ways to help women raise their financial proficiency. First on my list, of course, is helping you to master the management of money in your business. Knowing your way around your financials and accounting is, after all, a prerequisite for financial empowerment.
Just last week I was working with a client who owns a young, rapidly growing company. In 2015, the company struggled to get traction. But in 2016 they had steady sales and fairly low costs so she ended the year profitable—with almost $100,000 in the bank!
However, and this is a BIG however, the owner hadn’t paid herself a salary all year, because she didn’t have enough trust in the finances to know what she could afford to pay.
Before we ended our meeting I helped her set targets for profit and for owners’ pay (and a reserve fund to cover taxes) then, while we were meeting, she used her phone to pay herself a regular month’s salary for the first time since starting her company in 2015. Her actual pay will go up and down with sales, but from now forward a reasonable percentage of her revenue will pay for the value of her work building the company.
Paying yourself may seem obvious to you, but far too many women businesses owners miss these simple, yet hugely meaningful acts - actions that change the course of their business’ profitability and longevity.
Finances really matter, and when you stop being confused, and therefore overwhelmed by them, you begin to harness the full power and potential of your role as a woman leader. If you’re a business owner who feels swamped by your financials, then I offer two ways you can get the support you need: I can coach you as you develop your own skill in building profits and managing finances; or you can hire CFO on Speed Dial as your partner managing finances and growth. Either way, I recommend starting with a quick strategy call where I can answer your most pressing questions about how to build your financial skill and confidence. Apply for a free Strategy session!