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.
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.
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.
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.
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.
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.
Despite the rise in female entrepreneurship and female presence previously male-dominated industries, most women still don’t fully comprehend all the ins and outs of how finances work. If they do, sometimes they still aren’t sure how to manage and invest their income.