Money Lessons for Entrepreneurs
I feel like women entrepreneurs are all around me! I recently wrote a blog post on "Can You Start a Business From Your Passion?" Then as I was getting my daily fix of the Huffington Post, I saw an article that discussed "Money Challenge for Entrepreneurs". The advice and points made were right on target. I'm adding my two cents and personal experience of 10+ years working with women, money and entrepreneurs.
How are you going to pay your rent or mortgage while you are starting your business? And how long will that last?
Cashflow is probably the most challenging issue in that you may not have enough or you do not have a handle on it. An area of concern that my entrepreneur clients run into is they did not forecast their expenses, start up costs or over assumed revenue growth. Go back and look at your numbers with a new eye. If you already have revenue coming in, a simple, but fundamental formula, that works for my entrepreneurs is:
1) What is my revenue for the next month to three months?
2) What are my exact fixed expenses for the next month?
3) What am I paying myself (even a minute amount) to put into savings and then to live on a weekly basis for food and other variable expenses?
This is an exercise that needs to be done every week! Rain or shine, clients or not.... After a while it becomes a habit, second nature and relieves the stress of money worry.
Your Financial Community .... When I would give seminars at the Freelancers Union, I would always say: You Are the CFO of your business - act like it. This means, understand your financials (Profit and Loss Statement, for example). If you can't figure it out through Quick Books, then hire a bookkeeper. Make that an essential part of your community. If your cashflow is truly lagging and you don't foresee revenues for some time, consider raising money through crowdfunding (such as Kickstarter) or angel investing (such as the Pipeline Fellowship). Go out there and discover your financial community.