Guest Post :: Inc. Magazine surveyed a group of women entrepreneurs to learn about the challenges they overcame in order to found their successful businesses. These women business leaders presented many challenges that they faced, which may or may not have been related to their gender. However, the first challenge that most of the female entrepreneurs mentioned all fell into the category of managing and/or raising money. These women needed initial investments to fund their startups and later, they were in need of even more funding to grow and truly thrive in their respective, competitive industries. The women from the survey agreed that this was one roadblock that they all had to overcome at one point or another.
Despite the fact that this challenge is faced by the majority of female entrepreneurs in the business world, there are ways that women business owners can overcome the obstacle and ensure that their companies can grow and thrive long-term. Financial management is a key skill for all business owners and is essential to helping female entrepreneurs start and run a small business. Financial management is a complex multi-faceted skill that takes time to master, but there are aspects that women entrepreneurs can start to focus on today, which can ensure not only that their small businesses are successful, but that their business finances are managed as efficiently and effectively as possible.
Two Ways Women Entrepreneurs Can Manage Their Finances Better
The challenge of obtaining business funding might not be unique to one gender, but, at the same time, it’s fair to observe that women don’t earn the same average wages as men and are therefore unable to save as much to start and grow a business. Since an average female entrepreneur may not have as much capital to invest in her business as her male counterpart, it’s impossible to ignore the fact that a lack of capital is one of the primary reasons that new companies started by women entrepreneurs fail.
Does this common struggle mean that women should not try to turn their great ideas into thriving companies? Of course it doesn’t. This simply means that women have to really hone in on managing their finances in order to compete. These financial management tips are geared towards inspiring women to become better at managing their company’s finances and their small business as a whole:
- Cash Flow Management
The one universal indicator of a company’s success or failure is cash flow management. Companies can earn great piles of revenue and still fail if they can’t pay operating expenses because costs are also high. Businesses need time to grow and sustain themselves. The reality is that limited funding is the main reason that new companies struggle. When so many female entrepreneurs agree that obtaining money for their company is a big barrier, how can women overcome this problem?
Because of advances in financial technology, online lenders might provide a good solution for the problem of funding for female entrepreneurs. Typically, these lenders look for a variety of indicators to verify that the business is legitimate. For example, they may use information from accounting software, online payment processors, business checking accounts, or even online retail sites. They don’t just rely upon the traditional system of needing established business credit and a high owner stake in the company.
These alternative lending companies may provide the perfect solution for a company that has been in business for several months but not had time to establish credit or build cash reserves. For example, access to a business line of credit can help business owners run their company without worrying about having to balance the chance to buy new supplies at a discount with concerns over meeting payroll the next month.
- Decision Making
Any business that needs to conserve cash and operate on a tight budget requires tools to help owners and managers make good decisions. In today’s fast-paced business environment, these choices may have to get made very quickly. With the right software, women business owners can use their own past data to help them make the right decision without having to rely upon guesswork.
Software can keep track of cash flow. Business owners can see how much revenue they make and how much money they spend. Female business owners can access the data and all sorts of different reports and trends by clicking a few buttons from almost any kind of computerized device. This kind of information helps savvy entrepreneurs decide how to advertise, which products to sell, and when it is time to buy inventory.
Any tools that can help business owners make faster and better decisions are going to benefit women in business. Payment processing systems, accounting systems, customer retention systems, and predictive analytics tools may all be integrated together seamlessly. Most businesses can improve their processes just by learning to use a few financial management tools like these.
Better Financial Management Equals Better Businesses
Women entrepreneurs need to learn a lot of different things in order to run successful companies. They must learn to lead, establish a positive company culture, and promote their companies and themselves. Obviously, the first goal of any business is to increase revenues and profits. Hopefully, these financial management tips can help women become better money managers. In turn, they will have more time and resources to also become better at everything else.
Through its data and technology platform, Kabbage Inc. provides fully automated funding to small businesses. Customers apply online in minutes to connect existing business information generated through accounting data, online sales, shipping and dozens of other sources. Kabbage provides an instant decision and gives qualified small businesses ongoing access to lines of credit up to $100,000. Customers can use any increment they need up to once per day and can access their account online or through the Kabbage mobile app.
Kabbage is TRUSTe certified and A+ rated by the Better Business Bureau. Since Kabbage began lending in 2011, the company has extended nearly $2 billion to 70,000+ small businesses.