By Joanna L. Krotz, author of “Being Equal Doesn’t Mean Being The Same“
In recognition of the annual WED or Women’s Entrepreneurship Day, and its follow-up pledge on Women Wednesday or #WomenWOW to promote women-led businesses, it’s high time we updated our notion of what an entrepreneur really looks like.
The popular image may still rely on risk-taking, egocentric, take-no-prisoner males, but it’s actually women who are more likely to be starting a business these days.
Currently, there are nearly 10 million women-owned businesses, up from about 8 million in 2007, which generate $1.6 trillion in total annual sales receipts (all payments to the business) and employ almost 9 million workers, according to the National Women’s Business Council, the federal advisory council. That’s close to four out of 10 of all US firms (36%).
Mirroring the nation, women-owned firms are also becoming more diverse, and those businesses are accelerating even faster. All told, women of color now own one out of every three (33%) women-owned companies.
It’s a good time to launch your dream.
If you’re thinking about launching, you now not only have lots of company but also a range of successful women role models who’ve been there, done that and are ready to provide support and strategic advice.
To get you thinking along practical lines, here are my hands-on tips curated from the experiences of women entrepreneurs across the country that can help you clear some initial hurdles and avoid a few rookie errors. Just keep in mind that no entrepreneur grows a business without making – and learning from – mistakes.
1. Do not underestimate startup cash.
Most entrepreneurs discover that starting a business costs more than you expect. Newbies often think they can siphon money from the household budget or savings or some part-time income. That rarely works. You need at least 12 months of living expenses on hand before you devote yourself to the business.
As a result, you must cap expenses. So cut the fluff. If you’re down in the trenches, ask yourself, “What do I absolutely have to have?”
2. Don’t be a perfectionist.
You have way too many challenges and tough calls to be able to get every detail exactly right. With limited resources, much to learn and so little time, you must quickly prioritize.
What you eventually launch will inevitably be an incomplete version of your original vision. But that’s okay. You can always keep improving and developing business over the long term.
3. Don’t forget to work smarter with technology.
Make the most of affordable, up-to-date technology and its instant branding, probably both mobile and online, depending on your business. Don’t get bogged down in too many social media channels until you can support consistent messaging, products and a sustainable persona.
4. Don’t treat the business like a hobby.
Over and over, women owners emphasize that you must be serious about your commitment to a startup. If you have family or other responsibilities, find ways to carve out time to focus only on the business.
In addition, women often fall into the fallacy of believing that if they keep working hard, good things will come their way. But that’s not the way it works. Women must learn to ask for what they want and actively battle for rewards.
5. Don’t expect to know how to set prices right away.
Pricing is one of the hardest things for business owners to figure out. All too often, newcomers set very low prices for their services or products, thinking that lower prices will increase sales. But that only means you end up working for nothing. Instead, think of how much you must charge in order to turn a profit.
Be prepared for a trial-and-error period while you sort through a full understanding of your market, your product, your costs and your profit margin. But make sure you track and harness that knowledge as soon as you can.
6. Don’t go it alone.
It’s easy to get so caught up in the daily whirlwind that you lose both perspective and an up-to-date sense of your industry or field. It’s also very lonely.
You need a support system, which can take many forms, depending on your personality, business and interests. Options include:
- Joining a small business networking group. These typically limit membership to one or two businesses per field, so the group maintains a cross-section of interests and no one directly competes with each other. To fine one, ask your vendors, suppliers or your accountant or lawyer. Visit several to find a good fit.
- Becoming involved with a professional or trade association, which probably will include members from larger and smaller companies. This will give you a sense of the overall issues in your arena as well as good contacts.
- Setting up your own peer group of founders or owners, whether all women or co-ed, that meets weekly or monthly to talk about resources, challenges and solutions of running a business. Peers can be very helpful.
- Making sure you see friends, your spouse or romantic partner and family on a regular basis, so you don’t lose your life as you’re building your future.
7. Don’t forget to reward yourself.
Just like any employee or executive, you deserve some perks and incentives. Breaks at the spa or the gym or weekend trips are good ways to avoid burnout and stay motivated.
Joanna L. Krotz is the author of “Being Equal Doesn’t Mean Being The Same“, a timely guide that urges women to start a business because when men make the rules, women don’t advance. She hosts The Woman’s Playbook podcasts and has also published Making Philanthropy Count: How Women Are Changing the World. Krotz frequently writes and speaks on women’s leadership, including “Redefining Sex and Power: How Women Can Bankroll Change and Fund Their Future,” “Women’s Work: Paying It Forward,” and “Leveraging the Female Advantage” Webinar.