Women entrepreneurs are emerging as winners in the business landscape as gender bias is no longer a reason to worry. If you wish to try your luck, breaking the glass ceiling will be easier than ever. Several success stories prove that female business leaders have the grit and penchant for beating their male counterparts. But one area where most women can use help is financial planning and management. A little knowledge can take you a long way in building a financially sustainable enterprise. Here is the best financial planning advice women entrepreneurs can rely on.
Segregate business and personal goals
Before anything else, goal setting should be your priority while planning finances. Essentially, draw a line between business and personal goals so that you do not compromise one for the other. Perhaps you want to expand your business but also set aside funds for your child’s education. Distinguish the two and plan separately to ensure the fulfillment of both goals. Also, have separate checking accounts to avoid mixing money.
Focus on liquidity
While building a financially sound business always matters, you must also ensure liquidity. Cash is the primary liquidity metric, so keep track of KPIs like cash conversion cycle, days payable outstanding, and days sales outstanding. Try having more assets than liabilities to ensure a financial buffer to address emergencies. Also, have a reliable source of external funding at hand to get help if you fall short of money at any point.
Manage accounts and taxes
Another aspect no woman entrepreneur should overlook is accounting tax management. It is easy to fall short of accounting and tax planning when new to the landscape. But you can Contact an Accountant for your financial needs to stay ahead of bookkeeping, accounting and audits, and taxes. The best thing about collaborating with an expert is that you can get reliable financial advice for your business. This way, you have good chances of avoiding money mistakes down the line.
Stay ahead of risks
Women entrepreneurs should identify and mitigate money risks to keep their businesses afloat in the long haul. It is vital to have a plan that addresses the potential perils, but you may find it a daunting task. Consider narrowing the list and implementing control measures such as a crisis communications plan and cybersecurity insurance. The idea is to ensure business continuity during emergencies. You may have to spend a bit on such safeguards, but it is worthwhile.
Plan for retirement
As a business owner, you may retire at some point. It is crucial to plan for a seamless exit and a smooth retirement with enough money at hand. Women must go the extra mile for retirement planning for evident reasons. Experts recommend setting aside at least 15% of your pretax income for retirement. Putting the money in a tax-advantaged plan is a good option as it serves the benefits of tax savings right now and financial security in the long run.
Women entrepreneurs can get wise with financial planning with these simple ideas. Implement them right from the start for a lucrative business and secure future.
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