Alis volat propriis is a Latin phrase and the official motto of my home state, Oregon. It means “She flies with her own wings” and it’s a beautiful motto for women entrepreneurs as well.
To me, a woman who flies with her own wings is a strong, capable leader who stands on her own two feet (and pulls other people up at the same time).
So how can women sprout these wings? Let’s start with some real challenges for women in the workplace.
Women face unique challenges in building wealth.
Women are the primary breadwinners in over fifty percent of American families. And yet, women face very real challenges, a huge one being the gender wage gap.
Women on average are paid 78 cents for every dollar paid to men – even after accounting for parity in education, experience, and hours worked.
And it’s even worse for women of color. For every dollar a man makes,
- Black women are paid $0.61 cents
- Native American women earn $0.58 cents
- Latina women earn $0.86 cents
The one bright(ish) spot? Asian-American women – paid $0.85 cents on the dollar. Better, but still not equal.
A lower income for equal work has a significant, long-term impact on financial wellness, including greater debt from interest paid on student loans, perpetually renting versus buying your own home and having less money to put towards retirement, to name a few. An added challenge for working women that women often work full-time jobs and shoulder the majority of family caretaking duties, meaning they often doing double-duty where their male counterparts are not.
Take, for example, these sobering stats from the study When Women Succeed, America Succeeds: An Economic Agenda for Women and Families:
- The poverty rate – 14.7 percent for women – remains the highest in two decades.
- A single mother with two children who works full-time and earns the minimum wage lives in poverty – with an income of $5,000 below the poverty level.
- By age 65, the typical woman will have lost $418,800 by the time she retires, as a result of the gender pay gap.
I can personally relate to these sobering statistics. (Can you?)
My mom grew up wealthy with a clear path ahead of her to marry well, have children, and be a homemaker. Her father was the head of our city’s country club, owned a yacht, and had a long career as the president of a national furniture business.
Marrying young, my mother’s world – and ours – spiraled out of control when she and my father divorced. Though he was legally (and ethically) required to pay child support, he did not, and she could not afford to take him to court.
Though I was lucky enough to grow up in a safe, affluent suburb with wonderful schools, we were scraping by on welfare and the occasional help of my mother’s parents. My mom did not know how to manage money and had no practical skills to speak of. She lived in a constant state of fear and desperation trying to keep me and my three siblings fed, clothed, and housed, and alternatingly worked for a janitor or at non-profit sorting food for the hungry (including us).
She died nineteen years ago with no savings and no health insurance. I paid off her credit cards, every one of them maxed out and overdue.
And after? I decided to learn everything I could about managing my finances and building wealth.
This is why I am so passionate about teaching women how to manage their money and map their path to a profitable business.
It’s not about the money.
It’s about the ability to stand on your own two feet. To fly with your own wings.
Why is financial literacy so important for women entrepreneurs?
Many of my clients who are women start their own business because they have an idea they feel very passionate about and they want the freedom and flexibility of self-employment that would allow them to juggle the dual responsibilities of career and children.
And while across the board, these women smart, capable, and passionate entrepreneurs, they often lack the confidence and capability that comes from financial literacy and data-backed decision making.
In a nutshell, women who have a wealth-building mindset, invest in becoming financially literate, and understand how to map their path to a profitable business will build wealth faster with fewer obstacles.
Let’s look at some stats:
- Despite starting businesses at twice the rate of men, women receive less than 5% of SBA backed loans
- Loan approval rates for women-owned companies are 15 percent to 20 percent lower than they are for their male-owned counterparts.
- Women-owned small businesses have received only four percent of the more than $400 billion in federal government contracts awarded to small businesses.
- The average revenue of women-owned businesses is only 27% of the average revenue of men-owned businesses.
I have personally worked with hundreds of women entrepreneurs to empower them to make more money and change their lives. We focus on honing a clear value proposition, building products or services that customers actually want, and knowing your numbers, from standard financial documents to data used for building believable forecasts.
5 Ways To Build Financial Wellness and Wealth
#1 – Understand your money mindset
Many of us have strange relationships with money that manifest in ways like overspending, missing deadlines for paying bills, or living in fear of losing it all.
The first step here is to really understand how you are feeling about money, and why. For me, my biggest fear is that my husband will die and my daughter and I will be homeless, living in a car and eating cat food. It’s not rational, and I have more financial abundance than I ever dreamed possible. But because my early years were framed by poverty, the fear remains.
#2 – Build good money habits
Once you understand your money mindset, you can then do something about it.
For example, I teach (and practice) something I call “Finance Fridays” where every Friday I go through my family finances and my business finances. I know what’s coming in, what’s going out, and what I need to pay or follow up on that week.
One of my favorite (totally free) tools to do this is Mint. Mint is a safe, secure, online tool where you can manage your finances in one place. I have separate accounts for my family and for my business and this 15-minute weekly check-in makes it so easy to manage my money. (Tax time is easier, too!)
#3 – Know how your business makes money, and why
I use lean business methodologies in my coaching and teaching. That’s a fancy way for saying I coach my clients to start with the customer, creating value for them by validating what they want or need and then making it for them, experimenting, testing, and iterating as you go along.
This is the foundation for how your business makes money, and part of this process is understanding the costs of running your business and how you actually make money.
People are often embarrassed about what they don’t know, but this is really common! Here’s the truth: it’s very easy to learn. If you can add, subtract, multiply, and divide, you’re halfway there. Add in some data-based assumptions and poof! – you’ve got a forecast you can track against actuals and tweak when and where you need to, lowering costs and increasing revenue and profit.
#4 – Protect your business (and family)
REGISTER YOUR BUSINESS
Many of my clients are one-women shops. They are often fully immersed in the day-to-day running of their business and operate as “sole proprietors”, having never registered their business with the state. The problem? If your business is a sole proprietorship or a partnership, you and your business are legally the same “person”. This means if your business was sued, the person suing you can come after your home, car, family savings and so forth.
I coach my startup clients to become an LLC right off the bat. In Oregon, it’s fast, easy, and affordable, taking about 10 minutes online and costing $100/year.
GET BUSINESS INSURANCE
Another great way to protect your finances is to have business insurance. Rates vary depending on industry and risk, but for my business, I pay about $300 a year.
You can find the right insurance for you by doing a simple Google search or asking people in your industry who they happily use.
#5 – Invest in your learning and growth
No matter what stage you are at with your business-building, there will always be something new to learn. The important thing is moving forward. Even if you’re taking baby steps to do so.
There are so many places you can learn. Get a mentor from your industry, take a class, hire someone to teach you specific skills. If you know what you need to learn, you can find the resources you need to fill the gap.
And please, for the love of chocolate, find a tax accountant and lawyer who specializes in businesses like yours, and meet with them quarterly. You might be really great at doing what you do, but you’re probably not an expert in law or taxes for small businesses and startups. That’s why you hire these folks to uplevel your learning, protecting your business and helping you maximize profits.
You’ll find lots of gems in my free guide, The Small Business Startup Checklist.
-> GET IT HERE
Don’t wait, woman. It’s time to earn your wings, make some money, and change the world.
All my best,