Startups

5 Master Keys For Women Running A Successful Small Business

Women who become entrepreneurs do so for a variety of reasons. Most of these are either psychological or financial. According to a Kauffman.org report, here are the most common reasons:

1. A desire for wealth.

2. A desire to monetize a business idea.

3. A desire to be part of the startup culture.

4. A desire to own a business.

5. A desire to quit working for someone else.

Despite these strong motivations, motivation that their survey showed was shared equally by men and women, business is difficult.

Inc. com covered the story of Liane Weintraub and Shannan Swanson of Tasty Brand: “With the current obsession with label-reading and organic ingredients, surely there must be dozens of organic baby food brands, right? That’s what Los Angeles moms (and friends) Liane Weintraub and Shannan Swanson thought. But they were wrong. The pair started making organic purees for their own babies and couldn’t believe how few options were available in stores. So Weintraub, 42, a local TV reporter, and Swanson, 38, a Cordon Bleu-trained chef and former cook at one of Wolfgang Puck’s restaurants, got inspired to fill it. Today the brand is carried at Whole Foods, Fairway, Tops, and other chains. The company turned a profit four years after its founding, and it’s on track for sales of $2.5 million this year.”

Meanwhile, the flip side of the coin is business failure. Rajiv Poddar and Kamla Bhatt who founded Sedna Wireless explained the reason why their startup flopped: “ Finances were just one part of the story. The other part was that we failed to execute our own plans. Both external factors (e.g. the hardware ecosystem in India) and internal reasons (e.g. the expertise of the team) played a role. With money it would have lasted a bit more longer.”

The First Master Key: Keep On Top of Your Finances

While opinions may fluctuate about the ingredients of success—product selection, market timing, management technique—one thing all entrepreneurs agree on is the importance of staying current on financial information.

So, what exactly is financial information?

It’s the core of business management. It’s almost impossible to run a successful business without understanding how to read accounting reports and financial statements. These documents reveal the financial health of a business.

Fortunately, even if you are not keen on accounting and can’t afford to hire a full-time accountant just yet, there are two technological solutions open to you. One is to outsource the work to an online accounting firm. The other is to get software that does the heavy lifting for you. Simple accounting software, for instance, can help you track your profits and losses, as well as manage your accounts.

However, even if all your numbers work out, with revenues exceeding the cost of doing business, you could run into trouble if your financial timing is off. If your bills come before your revenue, you will run into cash flow problems. One solution to this dilemma is to use accounts receivable factoring. Using this method, a third party will give you cash as soon as you invoice your customer.

The Second Master Key: Set SMART Goals

A business can break down because of a lack of organization. Organization starts with having clear goals. The best goals are SMART goals. This is an acronym for goals that are specific, measurable, achievable, results-focused, and time- bound. Once you have clear goals, it is easier to create plan to fulfill them, then see how they work out and make adjustments over time.

The Third Master Key: Activate Your Goals With A Provisional Plan

Without a plan, your goals will not move forward. Even a bad plan is better than none at all. Planning allow you to figure out how to structure your day and the logistics of what to do get the results that you desire. Your first plans will be theoretical, rather than realistic. You are making educated guesses on what is possible.

The Fourth Master Key: Take Action To Test Your Plan

Unfortunately, even the best laid plans can quickly go awry. As you execute your plans, you may find that they are not as realistic as you had first thought. Numerous unknown factors will emerge. Over time, you will get a much better idea of how to run your business.

The Fifth Master Key: Make Necessary Course Corrections

After you have tested your plans in the marketplace, you will have a much better idea of how to build your business. You need to take time out to look at what is working and what is not working. Clarity is power, and often clarity comes from observation of experience. When you know what is working, you can do more of it. Similarly, when you know what is not working, you can cut your losses. You may also be able to make adjustments to get what is not working to finally begin producing results.