2020 has been the year of lessons for small businesses worldwide. Women-owned small businesses in particular, have been especially impacted. From the challenge of work-life balance arising from household and childcare responsibilities being shifted to women, to navigating current times and challenges to adapt their business model to the new economy, many women small business owners have been struggling to say the least.
Despite advances made by and for women business leaders, including the 1988 Women’s Business Ownership Act promoting female entrepreneurs, and the nearly 13 millions women-owned small businesses employing 9.4 millions individuals and earning $1.3 trillion in revenue, there is still a lot of progress to be made. The pandemic has taken some of this progress away, instead penalizing women for owning businesses.
A business is an endless source of learning and applied lessons. As contexts and business environements change, as they certainly did in 2020, so are small business owners expected to learn new trends, new concepts, and new ways of doing business. This is even more important for women-owned businesses that are more at a risk of not surviving than others.
Know your business inside out.
Do you really know your business, from your vendors to your customer base and cash flow? Many small businesses fail to survive or stay stagnant because of a basic lack of understanding of the business itself. While you don’t have to be an expert in all areas of your business, you should understand it well enough.
Focus your business.
An unfocused business is a business at greater risk. The more you can focus your business, from streamlining your operations to simplifying your offerings, the more you can control your business and the quicker you can adapt to change.
Plan for childcare.
As a woman business owner, you may have to deal with the responsibility of childcare, along with running your business. Whereas before, your life and business could have been running somewhat smoothly together, now they are blended more than ever. Planning for childcare in a way that allows you to be the best mother and the best business owner you can be, is a priority.
Mind your cash flow.
Most businesses fail because of poor cash flow management. Women-owned businesses are no exception. A cash-poor business is a business that is limited and unable to expand. Make it a point to manage your cash flow, and work to increase it so you have access to additional resources in times of economic strain.
Explore new streams of income.
A successful business is a business with multiple options to create income. This doesn’t mean that you need a gazillion product or service offerings. However, it implies being able to maximize your current products and services so as to create multiple streams of income that can prove helpful in times of crisis.
Mind your costs.
Along with managing your cash flow, you must also make managing your costs a priority. Where can you cut costs in an efficient manner? How can you consolidate some of your costs? These are questions you must periodically ask yourself in order to run a lean and efficient business that can survive and thrive in times of crisis.
Have an emergency plan.
Do you have a contingency plan in case of emergency? Do you have business savings you can potentially dip into when the going gets tough? Due to lack of funding and financial precariousness, many women-owned businesses may not have the necessary emergency structure to help them navigate difficult times. This is a reminder to invest in emergency plans and savings in your business.
Get online: you MUST have a website.
The 2020 pandemic has shifted most businesses to their online platform and offerings as a way to survive at a time when in-person contact was prohibited. This has emphasized the importance of having and developing an online presence as a business.
Diversify payment options.
How can your customers reward you for your products and services? When in-person contact is out of the question, can your business still receive revenue in different forms? Diversifying your payment options, through online and remote alternatives mostly, can also help your business make it through challenging times.
Invest in mentors.
As women-owned businesses face more challenges, especially as related to funding and growth opportunities, than men-owned businesses, having expert guidance can tremendously help. Investing in mentors in and outside of your industry and business type can help you get to the next level, and address challenges and obstacles in a more focused and informed manner.
Focus on hiring and retaining employees.
The 2020 crisis has seen an unprecedented rise in unemployment, which has contributed in weakening businesses at an alarming rate. Hiring and retaining employees has thus proven to be one of the greatest challenges brought on by the pandemic. Yet, it is also one of the greatest business needs faced by small businesses.
Learn about financing options.
While women have historically been at a disadvantage when it comes to business financing and funding, there have been increased efforts to grow and develop resources to fill this gap. Make it a point to learn as much as possible about financing options and prepare your business to avail yourself of these.
Create a flexible business structure
A heavy, clunky business structure is also one that doesn’t lend itself to change and growth. Whether it’s around your operations, your personnel, or your finances, ensuring that you can be flexible in case of change, or even worse, crisis, can help you maintain and grow your business over time.
Embrace innovation.
Necessity is truly the mother of invention. When you need to create something out of nothing in your business, and to remedy the lack of resources and results as experienced during the pandemic, you need to innovate. Embrace doing things in a different, still efficient manner, rather than being attached to the same processes and outcomes.
Prioritize relationships.
Business is done through relationships. Being away from each other during this pandemic has reinforced this notion, confirming that businesses really suffer in the absence of concrete, healthy relationships.
Charge what you’re worth.
Women are notorious for not charging what they’re worth, be it through salary or business negotiations. The feminine instinct to help, coupled with a disadvantageous lack of confidence, keep us from truly maximizing our gifts and talents and asking for what we are truly worth. This is also what keeps us from building successful and sustainable businesses, amplifying the impact of crisis like the 2020 pandemic.
Prepare to deal with uncertainty.
Uncertainty is par for the course when it comes to business and life in general, as we’ve seen in 2020. Part of building a great business is also building a foundation that can survive in times of uncertainty and change, through flexibility, adaptability and innovation.
Do it now or never.
Time is not promised to us. Neither is the possibility of starting and running a powerful business. Many women fall prey to insecurity and lack of confidence, foregoing their chances to build the business of their dreams. Don’t be one.
Technology is your friend.
Last but not least, 2020 has shown us all the incredible power of technology in times of crisis. This is a power that as women small business owners, we must learn to harness and use to our advantage to not only bridge the female entrepreneurial gap, but thrive through it.
What other lessons have you learnt as a woman small business owner?
During any regular time, starting and maintaining a small business is a challenge. From developing a viable business plan, to raising capital and managing revenue and expenses, it’s no small feat. As a matter of fact, 15% of small businesses fail in their first year, while 40% do not make it past the fifth year. These statistics are even worse for women-owned small businesses, especially during the 2020 COVID-19 pandemic where they find themselves disproportionately impacted, as reported by a recent U.S. Chamber of Commerce survey. The survey reveals a 13-point decrease in female business owners’ overall ranking of their business health, as compared to a mere 5% decline for male-owned small businesses. As a Certified Public Accountant (CPA), I’ve had the privilege and pleasure to work with and learn from a number of women-owned small businesses, especially in times of economic crisis like the one we’re currently facing.
Unfortunately, the prospects for recovery for women-owned small businesses after the COVID-19 pandemic are also quite dim, with less than half of small business owners feeling optimistic about future revenue increases. However, despite the severe impact the pandemic has had on small businesses, especially women and minority-owned, there are still ways to improve future outcomes.
To this end, here are 7 best accounting tips for women-owned businesses to survive, and even thrive, during tough economic times such as the current COVID-19 pandemic:
Determine where your business finances stand:
Knowing where you stand in your business finances is a crucial first step in times of crisis. Your cash flow statement is a good place to start for this. Using accounting software such as Freshbooks or Intuit Quickbooks allows you to keep track of your revenue and expenses, as well as your business’ main financial statements. Look at your current cash situation and find out:
If you have any cash reserves, and if any, how long you can sustain operations with these?
Which ones of your expenditures, especially cash-related, are the most essential to be attended to at the moment?
Which ones of your expenditures, especially cash-related ones, can be pushed back until you can muster enough cash on hand?
If you haven’t already, begin the Negotiating Game with your creditors and customers
This is where managing your accounts receivable, or the money your customers owe you, comes in handy. Call each one of your customers owing you money, and find out if they can pay you any faster, thus improving your cash flows.
In the same way, you should look into getting arrangements to defer your loans and bills, or even reduce and eliminate them entirely. You’d be surprised what can be done, and how many, if not most people, are willing to help if you’re willing to negotiate.
Trim the fat and find ways to be more efficient in your business
Times of crisis are opportunities to reframe your business and trim the fat. What expenditures can be reduced or eliminated? What can you do to operate a leaner machine, instead of bleeding cash everywhere? Should you invest in more effective processes and tools?
Take a good hard look at how you operate your business on a day-to-day basis, and don’t hesitate to cut where needed. In the same token, don’t hesitate to invest, if you can, where needed as well.
Keep up with the changing times
Just like times of crisis are ripe with cost-trimming opportunities, they’re also full of opportunities to reposition your business. The current pandemic we’re facing is changing the very nature of business, what with the advent of remote work and social distancing.
If you’ve been operating an in-person business, repositioning it as a more virtual operation using web hosting services such as GoDaddy for instance may improve your chances of surviving and even thriving during the crisis. It may also help create entirely new streams of revenue for your business, even after the recovery.
Determine if you need to apply for small business financing
You may decide after taking the pulse of your business finances, that you need extra money to attend to various expenses, such as buying supplies, paying your business mortgage or rent, or meeting payroll demands. The Small Business Administration website offers useful resources pertaining to Small Business Guidance and Loan Resourcesduring COVID times.
Additionally, the Coronavirus Aid, Relief and Economic Security Act (CARES) Act, implemented in March 2020, helps small businesses with loans, grants and debt forgiveness during the pandemic. Through it, you can also apply to reduce your tax liability, and/or obtain tax credits, along with more beneficial tax treatment of net operating losses, business interest deductions, and Alternative Minimum Tax (AMT) credits.
Invest in professional development
As market trends and business prospects are changing in times of crisis, professional development becomes increasingly important to adapt to, survive and thrive in times of crisis. Getting a new certification or acquiring new skills can go a long way towards maintaining your business afloat, and even set yourself up for success in future periods.
Don’t do this alone! Use the power of networking and mentorship
Last but not least, don’t go at it alone! Running a small business, especially in times of crisis, is incredibly difficult. This is why taking advantage of networking and mentoring opportunities is crucial!
Take some time to attend networking events, even if virtual, and continue to create new opportunities to meet and collaborate with people in and outside of your industry.
All in all, surviving and even thriving as a woman-owned business in times of crisis is possible during tough times, granted you apply some basic tips and continue to push through despite the challenges.
For more women-centered small business and career tips, visit us at https://www.thecorporate sister.com
One thing this pandemic has taught so many of us is that our financial situations can change from one day to the other. While some were able to save money working from home, many lost their jobs during the pandemic, and others were furloughed, uncertain as to their futures. During times of uncertainty like these, it can be hard to think about saving any money at all when we’re barely making ends meet, if at all.
However, it’s in times of harsh crisis that we learn our most valuable and powerful lessons. Most of my financial learning didn’t come from books or classes, but rather from lean episodes of my life during which I had to learn to budget, save and avoid financial mistakes the hard way. This pandemic is no exception.
Being at home as a result of the COVID-19 pandemic also means potentially falling prey to a host of temptations, among which online shopping and impulse spending. With the world at our fingertips with a decent wi-fi connection, whipping out our credit cards is far too easy and convenient…until it no longer is.
The first step to saving money in any circumstances, and especially in times of crisis, is to control one’s impulses. This is not just a matter of willpower, but also and most importantly one of setting up the right processes and systems in place not to fall prey to the spending call. One of these systems can be a realistic yet tight budget, setting up automatic payments to avoid the temptation to over-spend, or even having an accountability partner. It can also be reflected in small daily decisions such as opting to cook more at home as opposed to ordering out, or replacing the time spent shopping online with exercise or educational pursuits.
Be proactive about saving
Saving money, especially during a crisis, requires being proactive about it. It takes being mindful of one’s expenses, and researching the appropriate outlets and systems, to succeed in setting money aside during an unpredictable time such as this.
This may mean researching cheaper deals through applications such as Groupon for instance. It may also entail calling utility providers such as Internet provider Verizon Fios or mobile provider AT&T , to inquire about existing rate rebates, or re-negotiate existing contracts.
Build emergency savings funds
Last but not least, building an emergency savings fund can go a long way towards helping improve one’s financial situation in times of crisis. It is typically recommended to have emergency savings of 3 to 6 months’ worth of living expenses. However, just starting with one month goes a long way…This starts with the conscious decision to set money aside, and also find other avenues to make extra money, especially online.
Have you tried saving money during this pandemic? Share your insights with us by emailing us at corporate@thecorporatesister.com
PS: I am using affiliate links in this post, which means that if you click and purchase any product through these links, I will get a commission. Please note I only recommend and write about products and services that I believe in.
Ask a CPA: How do I organize my finances during the pandemic?
Q: How do I organize my personal finances during uncertain times such as this current pandemic?
A: Uncertain times such as the COVID-19 pandemic currently going on bring about a host of financial issues and uncertainties. With millions of individuals losing their jobs, the stock market registering concerning changes, and the economy threatening to topple over, most of us have been reorganizing our finances, or at least considering to do so. Some have been forced to do so, as a result of job losses, layoffs and other unforeseen personal and family circumstances.
If you’ve been seriously thinking about managing your finances in a more effective way, here are a few tips you may consider:
Set a contingency budget
If you’ve already got a budget, you’re in a good place. However, during uncertain and challenging times, you may need a contingency version of it. Consider this to be a slimmer, “emergency fund” version of your budget. This version cuts away the stuff you can live without, the luxuries you can do without, and trims your expenses down to the basics. This is not to say you should survive on bread and water, but rather that you would consciously re-evaluate your wants vs. your needs.
Prioritize your emergency fund
As you trim your expenses down, you may also want to increase your emergency fund. This may mean re-allocating the funds usually dedicated to luxuries to your savings funds. The good news is that in less uncertain times, you can always use this extra cash to treat yourself!
Let’s get back to basics
Getting back to basics is not just about trimming your budget. It’s also about adopting more of a DIY attitude. As you spend more time at home, consider acquiring more practical skills such as cleaning, recycling, cooking, etc… As a busy working mom, I would outsource many of the tasks I didn’t have time to do, such as ordering food out, hiring cleaning or landscaping help. However, I’ve found myself enjoying cooking more, and even learning to garden a bit, and saving money in the process.
Not being able to go to stores has also been a blessing in disguise. I’ve learnt to live more simply, not buying as much, and instead using what I have. The result? More savings, doing more with the family, and even better skin (hello, less makeup).
These are a few tips that can help with re-organizing your finances during uncertain times such as the COVID-19 pandemic we’re currently facing. You may even find, like I did, that this is an opportunity to learn new skills, save more money, and overall learn to live better.
What tips are you using to re-organize your finances during the pandemic?
As the coronavirus crisis is affecting the market in quite negative ways, many of us are wondering what will happen to our 401K accounts. Many are also wondering if we can actually use our 401k savings in case of emergency during the crisis.
My $0.05:
Here are a few guidelines you may want to consider:
If you’re able, keep contributing to your 401k:
If your employer matches your contributions, it’s basically free money that you would pass up if you stopped contributing.
While the stock market may have experienced many losses in the past few days, this also means there are opportunities to buy some shares of stock on sale. If your 401k contributions are going towards building a diversified portfolio, you should be able to see positive returns in the long term
Emergencies can definitely happen in a crisis, especially considering this is a largely unexpected one. However, tapping into your emergency fund first before tapping into your 401K may be best. If you really need to tap into your 401k funds in this period, you are in luck!The Coronavirus Aid, Relief and Economic Security Act now allows you as a retirement account participant to withdraw up to $100,000 for coronavirus-related expenses. Loan limits on your 401k have also been increased to 100% of the vested balance, up to $100,000. Individuals taking the coronavirus emergency also have the option of reimbursing themselves at any point
In addition, the related income tax due on such withdrawals can be paid over three (3) years.The contribution deadline for the 2019 IRA contributions has also now been pushed to July 15, 2020.
Last but not least, retirees over 72 years old now have the option of delaying taking their minimum distributions as required in 2020.
In the Woman of Impact series, I interview women who are making a difference in others’ lives through their mission and purpose. Cleonie Mainvielle is just one of these women. When I first heard Cleonie speak about her journey and business at a women’s event, I felt like she was talking to and about me. As I later joined her mastermind, I was even more inspired by her mission to help women like myself reclaim our time, energy and ultimately freedom.
If you are a woman or man looking to maximize your own impact, and live and work on purpose, your will enjoy reading about Cleonie and her work! Without further ado, I present to you Cleonie…
1. Could you tell me a bit about you and who Cleonie is?
I am a mother to two fun loving children (9 and 11 yrs old), a wife of 14 yrs and a full-time entrepreneur. My biggest fear is to have lived a life without meaning and purpose because I had wasted too much of my time. This fear is the driving force behind my business and how I structure my life. When my final days are here, I want to feel content that I have lived a life that made a difference and that it was lived well.
2. I like to ask people this question: “What did you want to be when you grow up?”
As a child, I always thought I would grow up to be a teacher or nurse. Teaching and nursing were the roles I gravitated to when I played with my brother or friends. The idea of helping others improve their situation by using the knowledge and skills I have really appealed to me. I started to implement my nursing plan as early as high school when I earned my Licensed in Practical Nursing. But I encountered a major setback when my first college choice accepted me into their Liberal Arts school and not their nursing program. This disappointment turned out to be a great opportunity to challenge my long-held belief that nursing was the route for me.
As I worked to earn extra money at a hospital using my nursing training from high school, I came to realize that although I loved helping people, I didn’t only want to help those who were sick. So, I stopped pursuing nursing, earned my Bachelor in Psychology and later went on to earn my Masters in Social Work. These two degrees turned out to be the best fit since they allowed me to help others with a broader range of issues.
4. Who do you help as your target audience? How do you help them?
I help busy professionals and entrepreneurs organize their schedules and belongings so that they can reclaim their personal freedom and have more time for what is important, joyful and inspiring. I do this by delivering workshops where I teach general productivity and time management strategies. For those who want long term group support to implement strategies learned, I facilitate women-only mastermind groups. These mastermind groups are comprised of 4-5 like-minded women who have agreed to lend each other support, share resources and hold each other accountable as they each strive to achieve ambitious goals.
As the group facilitator, I provide structure and track progress to ensure that the group as well as the individual members are achieving their goals. Lastly, I work with clients one-on-one to help them uncover the specific time management and productivity strategies that fit into their lives and address their specific circumstances.
2. I like to ask people this question: “What did you want to be when you grow up?”
As a child, I always thought I would grow up to be a teacher or nurse. Teaching and nursing were the roles I gravitated to when I played with my brother or friends. The idea of helping others improve their situation by using the knowledge and skills I have really appealed to me. I started to implement my nursing plan as early as high school when I earned my Licensed in Practical Nursing. But I encountered a major setback when my first college choice accepted me into their Liberal Arts school and not their nursing program. This disappointment turned out to be a great opportunity to challenge my long-held belief that nursing was the route for me.
As I worked to earn extra money at a hospital using my nursing training from high school, I came to realize that although I loved helping people, I didn’t only want to help those who were sick. So, I stopped pursuing nursing, earned my Bachelor in Psychology and later went on to earn my Masters in Social Work. These two degrees turned out to be the best fit since they allowed me to help others with a broader range of issues.
4. Who do you help as your target audience? How do you help them?
I help busy professionals and entrepreneurs organize their schedules and belongings so that they can reclaim their personal freedom and have more time for what is important, joyful and inspiring. I do this by delivering workshops where I teach general productivity and time management strategies. For those who want long term group support to implement strategies learned, I facilitate women-only mastermind groups. These mastermind groups are comprised of 4-5 like-minded women who have agreed to lend each other support, share resources and hold each other accountable as they each strive to achieve ambitious goals.
As the group facilitator, I provide structure and track progress to ensure that the group as well as the individual members are achieving their goals. Lastly, I work with clients one-on-one to help them uncover the specific time management and productivity strategies that fit into their lives and address their specific circumstances.
5. What do you think are the biggest obstacles for women to achieve the success they want and have the life they’ve always desired?
I think the biggest obstacle for women to achieve the success they want and have the life they’ve always desired is the disconnection between their time and energy investments, and what their desires are. Here is what I mean. When our minutes and energy are assigned to tasks that lack meaning and purpose, those minutes stack up to hours, those hours stack up to days, those days into weeks and weeks into months. Before we know it, we find ourselves living a life that is without meaning and purpose.
So, my work revolves around helping women gain clarity around what their desires are, then helping them reassign those minutes to activities they find important, joyful and inspiring. Along the way, they will encounter limiting beliefs, lack of self confidence as well as habits that can sabotage their progress.
6. What are your three best tips for working women?
I have so many tips to share because I have a healthy obsession with all things that pertain to productivity & organizing. But since I can only chose 3, here are my favorites:
1. Set your intentions before you invest any of your time and energy by asking yourself “What do I intend to take away or contribute to this event/interaction that will move me closer to what I desire?”; 2. Plan your days and weeks ahead by choosing one day each week as well as a specific time each day to map out how you plan to invest your time. This way, you can show up each day focused and clear on your priorities. Otherwise, your schedule will be subject to other people’s priorities and agenda; 3. Schedule the things that are most important to you. A calendar does not have to be limited only to your appointments. Be sure to schedule your priorities to ensure that there is time for them to get done.
7. Last but not least, where can we find you and get in touch with you?
Did you know that 40% of self-employed people average at least one overdue invoice of at least $2,500? If you’re self-employed, you may be familiar with this statistic. You may have experienced unpaid invoices and their disastrous effects on your business’ cash flow. You may also be wondering how your invoices can get you paid well and fast. I know as a Certified Public Accountant (CPA) and consultant, I have definitely felt the effects of it.
This has brought me to ask myself, like so many other entrepreneurs and consultants, the following question: “Is there some secret to invoices that actually get paid well and fast?” As it turns out, there’s a science behind it, and a pretty accurate one at that. As one of the most effective invoicing software companies on the market. Freshbooks has conducted a research on the types of invoices that actually generate positive payment. What they have found is as comforting as it is effective. Certain types of invoices written in a specific way tend to be paid in full, while others, well…tend to linger on businesses’ back burners indefinitely.
Based on Freshbooks’ study, the below infographic lists 7 tips you can use in your small business to write the kind of invoices that will get you paid faster and better:
Based on Freshbooks’ study, the below infographic lists 7 tips you can use in your small business to write the kind of invoices that will get you paid faster and better:
Additionally, the new Freshbooks Retainers option helps you manage and regulate your cash flow through recurring invoicing, time tracking, and reporting. The new Retainers option allows you to plan for and forecast a certain number of hours to clients’ retainers. Invoices are then automatically set up, which helps run the business on auto-pilot, so you can actually focus on doing what you love. Most importantly, you can avoid the trap of setting wrong expectations with clients, and wasting time with unending discussions and negotiations. Lastly, you will look more professional with the ability to create streamlined reports for yours and your clients’ use. Overall, any change in project deliverables and scope will be dealt with more easily with this tool.
What changes will you make to your bills going forward?
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