8 Money Mistakes Holding Women Entrepreneurs Back

money mistakes holding women entrepreneurs back true wealth female entrepreneurship

The latest list of billionaires published by Forbes revealed that 256 women made it to this elite club this year. The number increased from last year wherein 227 female billionaires made the cut. 

As a female entrepreneur, landing on this list is definitely a dream worth working hard for. But if you haven’t reached your first million yet (or even your first hundred thousand dollars), know that you can have your work cut out for you. 

Experiencing A Financial Plateau 

If you have been running your business for many years now but are still confused as to why you are not yet experiencing true wealth, you may be making certain money mistakes that could be hindering your financial success. 

These female money mistakes may include one or more of the following: 

1. Not Separating Your Business And Personal Accounts 

Many first time entrepreneurs make the mistake of using their personal account as their business account because having two accounts is simply inconvenient and time- consuming. 

If you still don’t have two separate accounts yet, you are making a huge financial management mistake. 

By having a separate bank account for your business, you will experience several benefits which include being able to: 

● Easily follow and understand your business’ financial health and audit trail. 

● Avoid overlooking or missing legitimate deductions that can affect your tax returns. 

● Protect your personal credit score and assets if your business encounters some legal problems in the future. 

● Work separately on both your company and own financial goals without mixing these two or neglecting any of them. 

2. Failing To Invest In Yourself 

As a business owner, you may have no qualms about investing in training programs, seminars, or workshops that your employees can attend to update or refresh their skills and knowledge. 

Although there is nothing wrong with doing this since it is a great way to ensure your employees are at par with other professionals and remain loyal to your company, don’t forget to update your skills and knowledge as well. 

This means taking some refresher courses or attending seminars to know about the latest technologies, industry standards, and other practices and concepts that will help you run your business better. 

There are also a variety of financial planning and management courses you can take up which will help you be more money smart. These courses are always worth investing your personal or business loans in. 

3. Taking On Too Many Responsibilities 

Putting on different hats to keep your company running is something that is acceptable when you are first starting your business. But once all operations start running smoothly and you seem to be getting more business, know when to get additional help. 

Even if you want to save money by doing the job of two or three people, you will end up overextending yourself. This can lead to poor work output or neglecting other important tasks. 

In addition, if you keep doing something that you have no previous training in or have no knowledge about, such as bookkeeping or accounting, you will simply be wasting your time and money learning it as you do it. Worse, you can make mistakes that will cost your company a lot of money. 

To avoid making these costly and time-consuming mistakes, hire help as soon as you know you need it and focus on your strengths and other tasks you can competently handle. 

4. Overspending On Your Company 

It can be easy to give in to the temptation to upgrade the computers and furniture in your office or shop, or to invest in certain pieces of technology that will help your employees to be more productive. 

However, investing in upgrades often requires a huge investment. As such, before you start making any major (and expensive) purchases, think carefully first. 

Certain investments are really necessary like hiring additional staff, updating your website or having a CRM system. But for other upgrades and major purchases such as a company vehicle or monthly team-building trips, you need to ask yourself first if these investments will help you generate more revenue in the short-term. 

Don’t forget that you can always get a good deal on certain investments without settling for poor or low-quality products or services. 

For instance, if you really need a CRM system, choose a free or inexpensive platform instead of a popular, costly one. If you want to hire additional staff but can’t afford to take one on a regular basis, look for a talented freelancer who can work with you during the busy seasons or months. 

5. Feeling Embarrassed To Negotiate When Purchasing Something 

Most women have no reservations about haggling when they are shopping at the farmers or flea market. 

Unfortunately, a lot of female entrepreneurs tend to feel uncomfortable when they try to negotiate with a vendor or supplier. And because of this, they lose out on the opportunity to save money – money that can go in the company’s savings accounts or investment portfolio. 

If you want to save more money that can go into other areas of your business or in another venture, be more confident when dealing with your vendors. Do some research beforehand so that you know the going rates in the market. Use the information you get to negotiate for a lower price or one that you will be comfortable with. 

Keep in mind that vendors deal with a lot of customers and, therefore, should be used to dealing with people who haggle. As such, don’t feel that you are the only one doing this to save your company some money. 

6. Forgetting To Invest 

There is nothing wrong with immediately depositing all the profits and extra earnings your business gains in the bank. But if you want to earn more, you have to consider investing your extra money. 

This means investing in stocks, bonds, real estate, and other cash equivalents. By doing so, you will be compounding your money which means it will continuously grow or earn more. 

However, before you try your hand in investing, make sure you know everything you can about it. Learn all you can about the different types of investments and investing styles. Choose one that you can understand and never take unnecessary gambles. 

There are different ways to learn about investing as well. The easiest and most convenient way to learn is to take up an online course. 

7. Using The Business Credit Card Irresponsibly 

Purchasing a piece of new machinery or additional furniture using your credit card may seem highly convenient since you won’t have to dip into your funds now to pay for them. 

Unfortunately, relying too much on your corporate credit card is not a smart practice. This is because using it regularly will expose your business to the risk of a bigger debt. 

Misusing the business credit card can lead to a compounding in the company expenses and higher interest charges, especially if you don't pay off the full balance each month. As a result, you will lose more money if you keep using your credit card rashly. 

Many financial experts say that irresponsible credit card use is one of the worst financial mistakes entrepreneurs make. You, therefore, need to start using this additional line of credit, even if it is cash back credit card, more wisely. 

8. Not Having A Risk Management Plan 

Lastly, your female run business will have its ups and downs. Make sure you don’t lose more money or dip into your personal account to help your business get back to its feet by having a risk management plan in place. 

You can do this by thinking about the worst things that can happen to your business and insuring your company against them. Your risk management plan should be able to protect all of your assets, yourself, and your employees. This usually means budgeting for professional and product liability, workers’ compensation, and other types of insurance that will protect your business. 

In addition, always keep at least three months’ worth of expenses in an emergency or contingency fund for your business and personal expenses. These funds will go a long way in sustaining your company financially during its low times. 

To start achieving true wealth, review your business and personal practices. Check if you are making the mistakes listed above, and start avoiding and correcting them. 

By working smarter, and practicing patience and commitment, you will soon experience the financial success you have always dreamed of.

I hope you enjoyed this blog post about the top money mistakes that are holding female entrepreneurs back from true wealth and success.

Interested in more articles about improving financial success?

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