By Karin Mizgala, MBA, CFP
Women’s rights, economic and otherwise, have come a long way, but the cultural baggage of a male-dominated financial system hasn’t completely left us. Lingering financial gender roles and the still significant gap in pay equity, savings rates, and financial literacy may be holding you back from achieving the financial success you deserve.
A recent study by Mercer Canada found that women retire 30% less wealthy than men. As a result of the gender pay gap, greater likelihood of career disruption, and greater longevity, women have a lower annual income in retirement and reduced standard of living. The study concluded that all else being equal, women must work two years longer than men to be retirement ready.
The 2014 Canadian Financial Capability Survey (CFCS) noted that women were 12% less likely than men to consider themselves “financially knowledgeable.” That self-perception may lead women to avoid or defer financial decisions to others, which increases their risk of being disadvantaged financially.
I know that many of you didn’t start your business for the money. And if you’re like most busy business owners or self-employed professionals, it’s hard to find time to breathe, let alone to plan, especially when it comes to the money side of your business. But the best way to narrow the financial and life balance gap is to dive in and grab control of your finances.
Even if you don’t feel comfortable in the world of profits and losses, taxes, budgets, and retirement, learning how to take charge of your money and having a financial plan in place for your life and business will make you more successful.
Here are some of the key benefits of having a financial plan for your business:
It Will Help You Realize Your Goals
Your financial plan is your opportunity to be totally clear and honest about what you really want. When you write down your goals, you are far more likely to achieve those targets. Your financial plan will also help you set priorities and commit to measurable milestones in your life and business. You will know exactly where you are going and how you are going to get there.
I always remind people that a good financial plan is not only a means to achieve their financial and professional goals – it’s also a means of realizing your highest aspirations for a life well-lived.
Your financial plan starts with a vision of possibilities to set your intentions for your life and business. What follows from there is a systematic, step-by-step process for fulfilling your life’s purpose — and the financial objectives that will help you get there.
You Can Make More Conscious Decisions & Better Choices
How much money did you really make last year? No, seriously. Do you really know? The scary truth is many business owners don’t. You may not have a handle on your expenses either. Or you may be in debt or behind in your taxes. If so, you are not alone!
Having a financial plan will enable you to make conscious decisions and intelligent choices. Where are you now – and where do you want to go? Only when you have a handle on these two things can you make informed choices on the financial strategies, tools, and resources you need to realize your goals.
You Will Be Less Stressed
Being self-employed demands a lot of juggling. The greatest pressure often comes from the financial side. Student or business loans, overdue taxes, past due receivables, or simply a bookkeeping mess can take a lot of joy and satisfaction from our careers. A simple, easy-to-use financial plan will give you a system and road map to follow that will help you feel more organized and in control of your money so you can focus your attention on what you love about the work you do.
You can Focus Your Energy and Make More Money
A little strategic planning will allow you to zero in on your priorities. Where do you want to spend your time? And where do you actually need to spend more time – or less time? There are many activities vying for your attention.
Your financial plan gives you the practical information you need to direct your energy, time and attention, and financial resources. It contains invaluable information you need to make realistic and effective pricing and marketing decisions. It will address cash management strategies, debt management, and how best to invest for your future.
You Will Be a Role Model for Your Community
If you’re like many women entrepreneurs who start businesses to make a difference in the world or for life balance, you might feel guilty about wanting – or needing – to make more money from your business.
Money may be an issue that your clients, staff, or women’s networks might be struggling with as well. By becoming more comfortable with and on top of your own finances, you can serve as a more effective role model, a trusted resource and a source of inspiration to your community and the next generation of women entrepreneurs.
You Will Feel More Empowered, Better Organized, and More in Control – of Your Life – and Your Business
One of the great feelings of satisfaction from taking charge of your finances is re-gaining control of your life and your business. With your financial plan in place, you will feel more organized and more empowered than ever before. You are likely already doing great work in your chosen profession, and you deserve to make a good living and not struggle financially. Your new financial plan will allow you to live the life you want with a lot more time, money, and energy!
If you are ready to design a financial plan for your business, we are ready to guide you.
Created by women, the Money Map Coaching Program addresses the most relevant areas of financial management for women entrepreneurs.
Learn how to run a successful business and stay true to your personal values.
Decide if you should use debt to finance your business and how to keep on top of your cash flow and keep money coming in.
Learn how to pay less taxes, save more money, and put some away for a wonderful retirement.
Our Money Map Coaching Program gives you financial guidance from a woman entrepreneur who understands your world and can bring you the knowledge and perspective you need to reach your goals.
Learn more about the program here.