By Joanna G. Burish
Women have blazed past the days of standing behind men in business startup. Today women own four out of every 10 new businesses! We’ve experienced a 27.5% increase in just the last decade with great improvements in career opportunities. According to a 2020 study, the U.S. has 12.3 million women business enterprises (WBE) which generate $1.8 trillion and employ nine million people! Women started 1,821 new businesses each day last year.
Eighty-four percent of these WBE are sole proprietorships. The flexibility a sole proprietorship gives for parenting or caregiving is a key factor in today’s female goals of work-life balance. To add, WBE perform with 10% more cumulative revenue over a five- year timeframe. This is a lot to celebrate with #Braudpower!
Despite this, only 4.2% achieve $1 million or more in revenue. There are four main reasons for this:
- Access to capital – Only 7% of venture capital (VC) goes to WBE, lending limits are 31% less than those for men and women tend to ask for less capital than men.
- Having a lack of sufficient financial knowledge. This tends to be the “Achilles heel” for WBE and results in poor financial planning, management and having diverse options to a cash runway.
- Having an “I can do it all myself” attitude — women tend to be multi-taskers to their own detriment! We are hard workers filled with so much passion, which can lead to emotional, physical and spiritual burnout!
- We HAVE to check our self-talk when societal beliefs and stigmas hit our front doors. This fact is changing, but it’s still here today: It’s absolutely acceptable for a dad to work or travel long hours, but when mom does it, societal stigmas place harsh judgements.
How can a WBE take her brilliant vision and still have an excellent execution despite these four setbacks?
RESPECTIVELY, HERE ARE SOME SOLUTIONS:
- There are many local and national organizations that specifically help connect you with VC opportunities as well as local lenders, including the Women’s Business Enterprise National Council (WBENC) and Doyenne, in Madison. Some are specific to your service or product. Finally, talk to a financial advisor on how to diversify your holistic financial planning so that having access to cash when needed includes tax mindfulness. Many go straight to pulling funds out of taxable accounts such as a 401(k), and that gets expensive if you’re under 59 1⁄2 years old!
- Develop your TRIFECTA team! This team consists of a great financial advisor, attorney, and accountant. These are your superhero partners! Holistic planning is SUCH a key factor for your business and your personal financial planning security. Also, what does your buy/ sell agreement say will happen should you and your business partner decide to part ways? Was it your money that funded the initial startup? The amount of knowledge and tax savings alone is worth at least an hour with a financial advisor to help you create this team.
- To empower yourself, learn how to identify your star players on your team to mentor and DELEGATE to. Make sure you understand
the value of benefits to keep them! Consider coaching options, health, life and disability insurance. Additionally, what will happen to your business should something happen to you OR this key employee — know your options to make sure this one event doesn’t cause the demise of all your hard work! Ask a financial advisor about key-man insurance on yourself and this key employee. This alone could save your company. Finally, do you know what your exit strategy, or your succession plan is? Talk to a financial advisor for solutions in these areas!
- Consider joining a powerhouse female network like The Brauds Network or The Dames to learn how they handle that glaring judgmental light. In addition, getting a coach or an advisor may be the biggest favor you can do for yourself!
These four solutions are the things that can take you from good to GREAT to get that last 10-15% of the “Wow” factor!
Contact Joanna Burish directly at 608-658-3482 or joannaburish.nm.com
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) (life and disability insurance, annuities and life insurance with long-term care benefits) and its subsidiaries. Joanna Burish is an Insurance Agent of NM. There may be instances when this agent represents companies in addition to NM or its subsidiaries.
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