When I ask a group of businesswomen what are their biggest challenges, the answers I get every time are marketing and cashflow. And yet, when asked in a public forum to nominate financial goals, there’s a wall of silence. It’s like we don’t want to talk about it. And yet, the numbers matter and are an integral part of your business.
And yes, I do understand that your financial position is personal. You may not want to confess to not doing well when you are promoting yourself as a successful businesswoman. Or you may not want to confess to not knowing and understanding your numbers when you are successful.
I’ve met women at networking events who talk about what “we” are doing in business as though they have a team working for them. I met one lady at her business premises and found a tiny office for one that barely had room for a second chair and the “we” was just rhetoric, there’s no one else at all. On delving into the financial figures, the reality was that her income was sub GST – that is her sales were less than $75,000 per annum; and thus, she doesn’t need to be registered for GST. After the expenses of running the business, this lady who appeared to be very successful was earning less than $30,000 for the year.
But I think that the issue is deeper than that. I believe that the majority of women when they first start out in business have no idea about business finance, very little understanding of what makes up profit, what is a capital expense and how cashflow really works. And the reason for this is that no one teaches this. It’s not compulsory training at tertiary education or a prerequisite to starting a business, and most of the courses that are available are for women who want to become bookkeepers or accountants. They’re not for women going into or already in business.
The accounting profession as a whole has been negligent in failing to address the financial education of women (and men) in business – whether at the start up point, where some basic knowledge is essential, or when the business is established, where more advanced knowledge is vital to survive and grow a business.
It’s no wonder that the wall of silence comes up at the very notion of talking about business finance. And yet it is one of the key pillars of every business.
Don’t let your fears hold you back from getting to know and understand your numbers. The numbers do matter and when you have reliable up-to-date figures, you will make informed business decisions that will improve your business.