Starting a business is one thing but sustaining a company is another. According to the 2017 State of Women-Owned Businesses report commissioned by American Express, black women are the fastest-growing population of entrepreneurs but have the lowest revenue numbers. Out of the $1.7 trillion in revenues generated by all women-owned businesses as of January 2017, non-minority women earned $1.3 trillion while African American women earned an estimated $55.6 billion in revenues. In other words, black women-owned firms earned only four cents for every dollar made by a non-minority woman-owned firm.
While business building requires a high level of expertise and marketing for a particular product or service, women must not neglect the importance of understanding the flow of money in order to grow it.
3 Things Every Black Woman Entrepreneur Needs to Know
How to Make Money
Before you can grow your business, you must first understand the profit potential of your industry and assess your financial position. Engage in market research and identify all the costs involved to bring your product to market (don’t forget about your labor costs). This will give you the information you need to arrive at the best price for your product or service.
Unfortunately, many women-owned businesses don’t generate high revenues because they have not identified the right price or audience for their product or service. Work with a certified public accountant (CPA) to help you create financial statements that will help you to discover revenue-generating opportunities and cost reduction strategies for your target audience.
How to Manage Money
If you have no idea how to manage the money you make, you’ll end up in a financial dilemma that can hurt the growth of your business. One way to manage your money is to leverage a quality accounting system that allows you to track your revenues, expenses, customer history, and other financial data points.
Intuit reports that around 85%–90% of small businesses in the U.S. are using QuickBooks for their bookkeeping system. QuickBooks allows you to track sales, tax, and customer payments. You get real-time data access and industry-specific reports when you need them. You can also create electronic invoices that can be paid immediately by customers. Work with a QuickBooks ProAdvisor to see if QuickBooks online is the best solution for you.
How to Multiply Money
Working hard will only take you so far. If you want to increase your impact in the marketplace, you’ll have to find ways to increase your income streams.
Have you thought about ways you can multiply your money without adding more business hours to your schedule? Investing in machines, manpower, and the markets will help you to multiply your money.
Ask yourself these questions: what technology can I use to be more effective and efficient? Who do I need to hire or partner with in order to strengthen my position in this industry? How can I invest my money in the markets so that I can multiply my money without adding another task to my to-do list?
Create a plan for your money and you’ll help drive the revenue numbers for African American women-owned businesses all over the world.