At Prime Capital Investment Advisors, we’re passionate about working with women, and we believe it’s vital that they take a key position in financial decision making for a couple reasons. First, women live, on average, four years longer than men , meaning that their participation in financial planning is inevitable. Second, women were twice as likely as men to start a business in 2020, often starting them from scratch by themselves .
But they weren’t just starting more businesses than men. They were also succeeding in key areas, generating higher revenues, creating more jobs, improving startup performance, improving effectiveness in senior leadership roles and harboring larger appetites for growth .
Still, female entrepreneurs face adversity, particularly in the department of perception . As we at PCIA strive to improve both the landscape and performance for female entrepreneurs, we’ve assembled a list of five things to know before starting a business.
- Success doesn’t have a due date.
One of the best ways to be successful is by defining success yourself. It can be unhealthy to compare, contrast, and follow typical standards of success. Success also occurs in the process in addition to the results. Once you have a target, chase that end goal, and don’t let anyone else define what your business is or should be.
- Cash is queen.
Before you even begin your business, we recommend having cash reserves of no less than six months on hand. It can provide a cushion for the unexpected and undesirable occurrences, and it can keep you afloat in the early stages of entrepreneurship.
- Have relationships with two or more lending institutions at all times.
For a variety of reasons, banking and credit unions make incredibly valuable partnerships and relationships at every stage of your business evolution.
- Diversify your business portfolio.
Just like your personal portfolio, diversifying your business portfolio can mitigate risk to your capital. We advise taking advantage of multiple streams of income to avoid any pitfalls in a singular entity. We also recommend taking advantage of any tax-deductible contributions such as personal 401(k)s, IRAs or other investment vehicles.
- Run your business like you will sell it tomorrow.
The goal of any business owner is to profit, and it’s important to keep that in mind at every stage. Always understand your goals and make decisions to increase the value of your business.
For more on business ownership as a woman, you can read the entire blog post from Prime Capital Investment Advisors by clicking here.