Barbara Stanny grew up relying on her father (the “R” of H&R Block) and then her husband to handle her money. When a personal financial crisis hit, Stanny decided she not only wanted to be smart about money, she also wanted to make more of it. For her latest book Secrets of Six Figure Women, Stanny interviewed more than 150 women who make $100,000 or more. Here, she shares tips she learned from successful female entrepreneurs.
MORE: Launching a business can be intimidating. Where should women start?
BS: Women have never had so many places to go for help. Make Mine a Million is a really great organization for women where teams of savvy, successful people advise women who want to grow their businesses. Most colleges have a business development department and you don’t need to be a student. When I first started I went to the University of Washington and spoke with their business development specialist for free! She really opened my eyes. SCORE also has free counselors.
Make alliances with people you can trust. I found an accountant at my gym! I was working out with a woman who I later hired as my bookkeeper. When she saw potential in my business, we became partners. One woman told me that success is a social activity. What happens with women is that we often tend to isolate ourselves, to do everything ourselves. Men understand the importance of a team. Women have trouble delegating.
MORE: Let’s say a woman has been working for a company and now she wants to branch out on her own. What can she do to her prepare herself financially?
BS: I found the women that did that, the ones that made the leap from corporate to self-employment, had a cash cushion. You want to be very careful about doing business on credit cards. Once you start going into credit card debt, it spirals out of control. I would encourage people to have at least a years worth of living expenses saved. The best thing to do is to open a revolving line of credit with the bank that you don’t need now, but you’ll have it available. This involves using something as collateral that you borrow against and pay back.
MORE: What kind of mindset do you think entrepreneurs need to have?
BS: Not everyone can operate as an entrepreneur, not everyone is self-motivating, not everyone can survive the challenges. You have to have passion, be a risk-taker and be willing to do what you don’t think you can do, over and over and over again. And to be savvy with finances, because even the best ideas, the best entrepreneurs can go under if they’re not smart on finances. Have someone on your team watching your bottom line; understand the cost of doing business and when to cut your losses.
MORE: How many financial and professional experts should you employ in your business?
BS: The successful women I spoke with worked with a team of advisers, an accountant, a bookkeeper, a CPA, a financial adviser, an estate attorney and business attorney. The climate is challenging because loans are so hard to come by. That’s why you really want a team of advisers, who are very savvy about business to advise you about your next move.
A whopping majority of the women also had business coaches. Many businesswomen—we are creative people, we’re visionaries. We’ve got great ideas; we’re very motivated by helping others, by changing the world, by making a difference. We’re driven by a higher purpose, and we forget about the bottom line. Business coaches will help you focus your attention and put your energy toward the biggest payoff. At the beginning, if you can’t afford to hire advisers, you can use tools like Quicken/QuickBooks to keep track of your money.
MORE: How would you go about finding a business coach?
BS: The same way you found your gynecologist, manicurist, or hairdresser: asking around. Coaches are becoming as common as accountants, if you ask around you’ll find someone. ICF will also have a roster of coaches who are accredited, but be sure to talk to their clients. And trust your gut!