5 Tips for New Female Small Business Owners

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Young businesswoman talking on the mobile phone while showing a beaming smileMore women than ever will become entrepreneurs this year, but will face challenges beyond the glass ceiling, according to the NAWBO’s 2013 State of Women-Owned Business Survey. The poll reveals 81 percent of respondents are optimistic about the future, but there is still some trepidation. Among the top concerns: 57 percent worry about the economy and 36 percent wonder if they can hire high-quality staff. Still, 71 percent don’t think that ObamaCare will significantly impact their business goals.

Preparation and diligence lay the ground work for success. The following tips should inspire female business owners to look beyond the obvious as they manage their companies.

Plan for the Best: Prepare for the Worst

Today’s society is extremely litigious. A recent report from the International Finance Corporation and World Bank found that legal battles and regulations are still major hurdles for women in the economy. The study, titled “Women, Business and the Law 2012: Removing Barriers to Economic Inclusion,” found that 103 out of 141 economies studied impose legal differences based on gender. The report also stated that women make up 49.6 of the population, yet only 40.9 percent of the workforce. Legal barriers based on gender may have something to do with this gap.

Find an attorney in your area experienced in business law. It is far better to have an established relationship with legal counsel than to scramble for an advocate if something in your advertising offends someone or you have to defend yourself against an unfounded harassment claim.

Evaluating Credit Cards: Coming in and Going Out

Credit cards can be a valuable asset or a source of accounting nightmares and hidden fees. For example, a business card from American Express comes with online planning and budgeting tools to track expenditures, and you can avoid interest by paying your balance in full each month. On the flip side, banks and Paypal.com charge merchant fees for every customer credit card transaction. Before you establish prices, it is imperative to negotiate fees and consider the cost of sale factor.

Paying the Primary Investor

Funding comes in many forms – bank loans, savings, investors and family. Don’t forget one of the essential lessons from Accounting Principles 101: If you use personal funds to launch your business, set up a ledger account and identify the funds as a loan. Pay yourself regularly. Failing to pay yourself defeats the purpose of operating a for-profit enterprise. If you have to forego payments temporarily to address a cash flow shortage, tack on interest.

Define Your Strategy: Revise When Necessary

Every organization has a strategy, even if it isn’t well-defined and effective. Utilizing tools like the Strategy Diamond that was developed by Don Hambrick and Jim Fredrick allows executives to examine every business facet from the potential for return on investment to price policies. Many executives think that performance is mainly about financial impact, but Hambrick and Fredrick insist there are environmental and societal considerations, too. Defining your business strategy keeps you focused.

Networking: Forums, Associations and Professional Growth

Female executives, like every other worker, need social support. Managing an online presence is valuable; however, joining trade associations and subscribing to business journals provide equally vital connections. Join the local Chamber of Commerce, consider an association membership with the National Association of Female Executives and read the Wall Street Journal or Inc. NAFE.com provides information about workshops, current trends and emerging technology for women.