Every woman and girl should have the opportunity to follow their dreams. Because women do 66% of the world’s work – yet earn 10% of the world’s income – helping women entrepreneurs get their businesses up and running is an important step towards making this goal a reality.
Women’s Entrepreneurship Day, founded by Wendy Diamond, is global “educational event” aimed at educating businesswomen in the ways they can empower one another financially, thus improving the likelihood of their long-term success.
Today there are an estimated 11.3 million women-owned businesses in the United States, according to The State of Women-Owned Businesses 2016 report from American Express OPEN and Womenable. Generating over $1.6 trillion in revenue, these ventures drive economic activity and improve employment in their communities.
If you’re hoping to join this ever-growing group of entrepreneurs, one of the first considerations you’ll likely have to make is how you’re going to fund your new business – in good times and in bad. Here are seven helpful tips to get you started.
- Take Ownership of Your Credit
Whether you’ve been building your credit for a while or you simply are starting with no credit, it’s a good idea to know where you stand before applying for a loan, your first credit card or seeking any other kind of financing.
“Many women forget about their credit scores, particularly if they are married or sharing a bank account,” Meredith Wood, vice president of content for Fundera, a free site for finding small business loans, said. “Make sure you own your credit so that you can apply for capital.”
- Don’t Fear Asking for Help
“Don’t be afraid to ask — for help, for funding, for free stuff,” Alex Niemczewski, CEO of BallotReady, an online voter guide, said. “If you don’t ask, the answer is always no.”
Niemczewski said it’s a good idea to start talking with potential investors early, “even if you’re still in the idea stage. The earlier you are, the less you have thought through everything, but that’s okay. Potential investors are incredible sources of advice and connections.”
You don’t just have to be asking for something — it’s good to remember that it’s okay to simply be asking for a fresh perspective from someone you trust. “Sometimes it helps to seek another opinion,” Wood said. “You need to understand how your offers compare before making a decision.”
- Use Resources Designed Just for You
There are programs dedicated to women in your exact situation, like those offered by the U.S. Small Business Administration (SBA), where you can also turn for guidance or answers to your questions.
“These WBCs, as we call them, offer women entrepreneurs, especially those who are economically or socially disadvantaged, comprehensive training and counseling on a vast array of topics, such as financing, marketing, federal contracting, international trade and manufacturing,” Andrea Roebker, regional communications director for the SBA, said.
- Start Small
“My advice to all women entrepreneurs is to think lean when figuring out your finances,” said Lauren Milligan, a career coach in Chicago. “Can you work from your home office rather than paying rent? Can you outsource to freelancers rather than bringing on an employee? Can you use interns rather than outsourcing business functions to expensive vendors?”
All the business plans in the world cannot predict the challenges that lie ahead – don’t quit your day job right away, and don’t bite off more than you can chew. By trying it first on a small scale, you allow yourself both the room and the time to build credible, trustworthy relationships.
- Know What’s Essential
“Resist the temptation to spend your seed money on furniture and stationery,” said Angelique Pivoine, CEO of Good Thinking Agency, a company that helps freelancers and small businesses draw media attention. “I really recommend that you make a list of essential expenses and fees to start a business and keep it afloat for six months before spending money on a new chair or potted plants.”
Milligan also suggested that you “look at every expense you have and see how you can chip away at it, so that you don’t have to take on unnecessary debt.”
- Consider Angel Investors
“Women starting a company should be aware that there are more and more female-led, angel investors who are seeking great concepts and experienced leaders,” Stephanie Sprangers, CEO and founder of Glamhive, a fashion app, said. “You’ll want to find early-stage angel investors who are open to investing in pre-revenue and even pre-tech build companies. These angel investors provide capital, advice and connections.” She recommends looking for them by searching for “angel investor” on sites like LinkedIn.
- Look at Other Financing Options
“Do your research about grants for women entrepreneurs, small loans, credit cards — a wealth of options exist online if you’re denied by banks,” Wood said.
Pivoine also suggested finding a “trustworthy partner or investor” to help you fund your business. “I recommend, though, that you iron out the details of the partnership beforehand, [including] how much percentage of the business each partner has, how long until the partner who provided the cash recuperates their investment cost, etc.”
On Women’s Entrepreneurship Day and every day, it’s important to recognize the contributions being made to society by women-led businesses as well as the challenges that still lie ahead. Strong, empowered women in business are crucial catalysts for positive change both within their communities and the wider world. As we look forward to this event, remember your own dreams – and then lay a plan to start putting them to action.