It’s not uncommon for entrepreneurs to have financial regrets after starting a small business. These can range from wishing you had created a larger emergency fund to feeling guilty that you spent too much on what would later turn out to be irrelevant expenses.
While I can’t turn back time on these decisions, I can round up advice for female entrepreneurs on what to do moving forward. Bookmark these tips and follow along with them before making any sudden moves in financing your business.
1. Look into bootstrapping the business.
In 2009, I purchased a division out from Intuit to run as a stand-alone business. The purchase was one that I could have made with the help of bank loans or investors. I chose not to use either option. Instead, I financed the purchase by bootstrapping it. Bootstrapping, for those unfamiliar with the term, is the act of self-funding a business. This is typically done by using existing money in savings (retirement accounts may be utilized), strategic budgeting and making purchases via personal credit cards.
The upside to bootstrapping is that you do not get trapped in third-party debt. You can finance a business with the help of a traditional bank loan or investors, but both of these options come with strings attached; the loan must be repaid with interest, while investors require an equity stake in your company.
Bootstrapping allows you to gracefully sidestep these obligations. If you feel like you’re more than capable of successfully doing it, go for it! The only caveat is that you have to be willing to go all in. When I bootstrapped the purchase of the business, I stayed on a strict budget for a very long time. Discipline is key in bootstrapping. You must be willing to stick to a budget, make calculated, careful decisions with how your money is spent, and stay committed to the style of financing.
2. Apply for relevant business grants.
Have you thought about applying for a business grant? If your business qualifies for a grant, you may be awarded that funding — and most grants typically do not require the recipient to pay anything back. Check in with grant databases like GrantsForWomen.org for a comprehensive list of available grants. Start bookmarking grants you might be eligible for, any necessary requirements needed before applying and application deadlines.
3. Utilize (free!) financial resources from the Small Business Administration (SBA).
Did you know that the U.S. Small Business Administration (SBA) offers small business funding and assistance resources before female entrepreneurs get to the finance stage? It’s true! Even better, many of these resources are free! The SBA is a federal agency that helps small businesses across the United States to get started, grow, and expand using a variety of resources. Many of these resources are free to use on the SBA’s website, including these two extremely helpful resources for starting and financing businesses:
- Business Guide. This interactive guide covers the ins-and-outs of getting started with your business. It touches on everything from planning, launching, managing and growing a small business.
- Lender Match. This online tool connects small business owners with banks interested in providing funding.
This is, of course, just the beginning of everything that the SBA has to offer female entrepreneurs — check out their website for even more resources.
4. Learn the art of negotiation.
Katherine Schneider, owner of 7 Day Websites, has spent the last 15 years self-funding several businesses. However, it took her years to learn the art of negotiation. Not understanding how to property negotiate led to Schneider’s biggest financing mistake: overspending.
“As a woman in business, early on, I would have sales representatives talk me into products that were extremely overpriced,” Schneider explains. “They would use the friendly approach followed by pressure, so I would feel bad and pay for it. I would spend $10,000 on signage to find out later I could have paid $2,500!”
Schneider’s solution? Get tough! She started focusing on negotiating everything and saying no when it was necessary. The thick skin she created allowed Schneider to make better financial decisions and stick to her guns.
“Negotiating, and not feeling bad about someone’s feelings, is an important skill for any female entrepreneur to develop.” Schneider says. “It’s not personal. It’s business!”
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation and Deborah at @deborahsweeney.