Are you a woman in business, an entrepreneur or an executive managing a team?
From experience, I know that being an entrepreneur and business owner or exec isn’t always easy, especially for women.
In fact, it can be quite hard to call oneself an entrepreneur – the imposter syndrome certainly kicks in when that word is thrown around!
However, for me, and for those friends and clients I know who are running businesses, the rewards that come from achieving self-made success are more than worth persevering through challenges and adversity.
For this blog, I wanted to share my thoughts about the top 5 (mainly financial) things, any woman in business should be focusing on:
Develop a personal budget and plan
Just as you plan out your business, your marketing, and your growth, put some thought into your personal financial goals.
What are your goals for your business, as well as for your personal finances?
So often business owners are so focused on their business plans and development that they completely overlook the personal stuff.
Make sure your personal financial plan ensures your business can pay you first before anything else – both what you need for now, but also enough to save for a positive, happy future.
Invest in Life and Health insurance
If you’re setting up or running a business, you already have a lot on your plate.
Investing in life and health insurance can give you a sense of security and ease your worries.
Start by thinking, if I was unable to get up and do this every day – what would be needed?
What if you couldn’t work for 6 months? What if it was a year? What if you never could again?
What happens if you can’t get to the GP quickly to resolve an ache or pain and it keeps you from work?
What happens to my family if I don’t wake up tomorrow?
These things are hard things to think about and make us anxious, but if at least some of these things we acknowledge head-on and address, then you’ll know that, whatever happens, if you are ill, you can take the time to heal, free from worry.
Ultimately this can help you to focus more on making the business a success.
Build an emergency fund – this applies to the business and you personally
It’s vital that both the business and you personally have something for you to fall back on and building an emergency fund shouldn’t be neglected.
An emergency fund can help us feel more in control but also prepare us to face adverse situations bravely.
I know from experience, that as we face this latest UK recession, having cash, to support your cash flow and the ‘what ifs’ is going to be vital.
Holding ourselves back is something that hinders the growth of lots of women, but taking control by reducing anxiety with some simple steps, like building up cash reserves and emergency funds can help us continue to be confident.
Pay your tax on time
Set aside the tax you owe personally and in your business every month. Don’t be tempted to dip into this amount to fund other things.
The thing about HMRC is, they make it our responsibility to disclose what we owe and pay on time.
They won’t chase you, they’ll just penalise you if you don’t pay on time.
So, being responsible about your finances and taxation will reward you enormously as you won’t lose your money over small penalties that soon mount up.
Pension plans and investments
Accruing a healthy pension fund over time is vital for flexibility in the future and thinking about post-retirement life.
They’re highly tax efficient and helpful for your personal tax rate – and even can help with company tax (depending on your business setup).
After paying your required salary, your insurance, and business costs, it’s vital for you to consider what extra cash the business can afford to pay to you, and when it does, to invest it.
The right home for this ‘investable’ money will depend on your personal circumstances, but it’s highly likely that a pension, ISA, or combination of the two will be the first steps to take.
Keeping these few things in mind and making small changes, could make big differences in your financial planning.