Female entrepreneurs often face daunting obstacles as they pursue their dreams, many of which are not experienced by their male counterparts.
I know firsthand that discrimination, inequity and harassment are only a few of the issues that we might encounter on any given day. Unfortunately, 2020 has been a year where those difficulties have been joined by a host of new problems brought on by financial instability, dysfunctional politics and a global pandemic.
This chaotic year has forced many business owners to face predicaments and decisions they may have been completely unprepared to confront. I work with strong and talented female entrepreneurs every day. Just as each individual is different in her own way, so are her specific circumstances. No matter if your business is currently thriving or if you're worried about having to close your doors, 2020 has caused all of us to re-examine our priorities, revisit our plans, and reconsider our strategies. No matter how well a business is doing, there's always more planning and more preparation that can be done.
We now have a better understanding that tomorrow can change in an instant. The following are some tips to help ensure you are prepared and don't get caught off guard again.
If 2020 Has Helped You Thrive:
It's easy to get overwhelmed by the amount of bad news and think that everyone is suffering, but some female entrepreneurs are having tremendously successful years. That can be attributed to hundreds of factors. No matter your success, now is not the time for complacency. The next shock could be the one that affects you.
For women who are doing well, there are plenty of financial considerations to still explore. Do you need a larger rainy-day fund to cover expanded overhead and increased expenses? Does it make sense to take on new debt to accelerate growth? Do you have a succession plan in place in case something happens to you? If 2020 has been good to you, it's a great time to be forward-thinking about how to maintain your success and how to avoid the next calamity.
If 2020 Has Got You Down:
Sadly, far too many female entrepreneurs are finding themselves in this category. Circumstances in the past year that were beyond any business owner's control have caused untold heartache and loss. There have been layoffs, closures, downsizing and countless other traumatic events that take a real emotional and financial toll. Not to mention women often bear the brunt of managing their household, including their children's education, which has also been upended by the pandemic—causing women to leave the workforce at a rate four times higher than men.
Resilience and ingenuity are priceless if you find yourself in this situation, but you should also be prepared to do a serious, thoughtful reexamination of your current predicament. Have the financial hardships of your business begun to leak into your personal finances? What can you do to keep those separate? If you're looking into borrowing, do you have a feasible plan to pay it back on time? Does your overall business plan need a revision? These are all problems that have solutions. You should lean on your trusted advisors to guide you.
Of 2020 Has Convinced You to Move On:
Some women are thriving, some are struggling, and some may be looking at the current economic landscape and deciding it is time to move on. A business exit plan is an often overlooked and neglected component for an entrepreneur. The business is your life and you may not think about what's next until it's too late. This can cause family friction, confusion for your staff, and an unsatisfying return on your hard work.
If you're looking to exit or transition, it's never too early to make plans and consider some questions. Do you want to inflate the value of the business for a sale? Or do you want to depress the value to benefit the next generation? Are there opportunities to buy or sell complementary businesses? Does your exit plan provide you everything you need for the next phase of your life? Don't let your hard work go to waste by failing to plan.
If 2020 is Your Time to Get Started:
Despite the challenges, many women have chosen 2020 as their time to act. In every downturn, there's always room for someone to get ahead. Maybe the pandemic has created a new need that you're ready to fill, or maybe your business is prepared to now head in a completely new direction.
No matter how confident you are in your idea, it's imperative to do the fundamental planning work to help ensure you succeed. Do you have a thorough and detailed business plan? Furthermore, do you have the specific tactics and strategies in place to help you follow it? Are you willing to remain flexible and prepared to pivot and amend that plan if the circumstances demand it? Do you have a workable plan that keeps your business and personal finances separate? Entrepreneurship requires a perfect mix of both courage and caution.
Female business owners have always faced an uphill climb, and 2020 has put that struggle into sharp relief. All the issues can be addressed with proper planning, which may include leaning on dedicated, trusted professionals who understand your goals and have your best interests in mind.
Together, we're strong, talented and ambitious, and we know tomorrow is a new day. Let's use the lessons of 2020 to channel our resilience into action.
Tami Sytsma has been helping West Michigan executives, business owners and their families create long-term financial plans for 17 years. A CERTIFIED FINANCIAL PLANNERTM professional and personal wealth advisor, Tami owns Sytsma Wealth Strategies (an independently owned office of Raymond James), supporting business owners with strategic financial planning, succession planning and estate coordination, charitable giving strategies and portfolio management, among other wealth management services. Learn more at sytsmawealth.com.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Courtesy of Tami Sytsma.