Supporting your start-up business through the challenging first year is certainly easier if you have access to funding
In fact, the ‘The Hidden Factors: SA Women in Business’ research report, carried out by the Sage Foundation and Living Facts, found that 61% of women cited not having access to money as a barrier to starting their own companies.
However, money is only one element of a successful business. Our research also found that skills, grit, hustling and smart time management are as important as financial management. Yet only 21% of women who did not have a business said they had good business skills and only 33% of business owners said they had good financial skills.
Here are a few smart ways you can develop both and improve your chances of success.
- Be money smart. A significant majority (84%) of women used their savings to start their businesses, with only 17% believing they could access formal funding. Very few obtained funding from traditional banks and even less knew about venture capital, angel or seed funding, grants or crowd sourcing.
Use your full-time job as an opportunity to save towards your own business. You’ll need a financial safety net for the first few months and clearly the trend is to provide that net yourself.
- Be time smart. Around 25% of women who re-joined the corporate world cited time poverty as a reason, underestimating how much time they would need to invest in growing their businesses.
Use any spare moment to chase new business but also invest time in yourself, to grow your skills and learn new ones, like sales and marketing. Study your competitors and your industry and figure out what makes your business different. Then, focus on developing your differentiator and delegate with authority. In a word: hustle.
- Be people smart. As a business owner, you’ll deal with different people and personalities, which requires a high level of emotional intelligence. Yet, up to 22% of business owners said finding and managing good people was a challenge.
Don’t be afraid to hire people who are better and smarter than you and can provide new perspectives and guidance. People smarts extends to your networks, which can provide valuable business leads.
- Be resources smart. Start small. Don’t rent out office space if you can initially run your business from home. Only buy office equipment you need to get the job done. Rather, get your elevator pitch and business differentiator just right – that’s worth more than an elaborate and expensive marketing strategy.
- Be process smart. Many of the challenges I’ve discussed can be addressed through smart business processes and automation. Managing cash flow and debt was cited as challenges by 36% and 20% of women, respectively.
But easy-to-use, cloud-based accounting software can automate much of this and help you identify opportunities for growth and areas of concern, while getting a better handle on your finances. Smart software can also drastically reduce the admin associated with people management, which will free up your time to focus on developing yourself and your team.
Yes, you need money to start a business but many women underestimate the time and skill investment that contribute to success. Be sure to factor these into your business plan as well.