Welcome to our #AskACPA feature where we answer financial, accounting and business questions.
Question: As a woman small business owner, what goals should I have for my small business this year?
New year goals are not just for individuals. They’re also for businesses looking to continue to grow, expand and do well in the future. In the wake of the COVID-19 pandemic, many, if not most of the businesses impacted are, unsurprisingly, women-owned small businesses. According to a 2020 survey by the U.S Chamber of Commerce, women-owned small businesses have been more significantly impacted by the COVID-19 pandemic than their male counterparts. Additionally, these businesses also have less optimistic revenue prospects, among general fragile recovery prospects for all business owners.
More than ever in recent history, women entrepreneurs, despite their numerous achievements even in the midst of this global health crisis, are faced with a tough battle ahead. Hence the need to set and commit to solid future goals. To keep things simple yet effective, here are three goals women small business owners can shoot for as we usher in a brand new year:
- Own your accounting and financial processes
One of the biggest misconceptions and mistakes committed by small business owners is to neglect their accounting and financial processes. Proper accounting and finances are the foundations and the language of healthy businesses. As such, when small business owners do not proactively take ownership of their accounting and finances, or relinquish them entirely to others’ control (even if these are financial experts), they also relinquish effective control and ownership of their businesses.
This is all the more important for female small business owners, who face exponentially larger barriers including funding limitations. The key here is to get familiar with your most basic accounting and financial information first, such as the amount of revenues and expenses for the period to start. Understanding how the business operates in terms of its cash receipts and expenditures, and being able to own its financial story and be accountable for it, is crucial.
- Create systems and processes
Running a small business is A LOT of work! Running a small business and staying on top of your accounting and finances is even MORE work! This is why it’s crucial, especially for women small business owners, who also wear many other hats such as working moms and caregivers among others, to create systems and processes to efficiently and effectively track their finances.
Using apps such as Quickbooks or Freshbooks, as well as creating efficient workflows for invoice, revenue and expense tracking, can go a long way to save time, energy and costly business mistakes.
- Commit to continuous accounting and financial education
Financial literacy is extremely important for female entrepreneurs, who are most often at the helm of businesses that are disproportionately impacted by lack of funding and scarcity of financial resources. While this gap largely stems from structural and societal This is why it is crucial for female business owners to work at bridging this gap through continuous accounting and financial education through books such as “Million Dollar Women: the Essential Guide for Female Entrepreneurs” by Julia Pimsleur, formal programs, as well as mentoring, and accounting apps such as Quickbooks.
Overall, the importance of setting clear, defined and effective business goals as small business owners cannot be overstated. By keeping these goals simple and actionable, focusing on priorities such as owning your accounting and finances, creating efficient systems and processes and investing in continuous financial education, women-owned small businesses have better chances to succeed in the new year.
What goals are you setting for your small business?
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