Money is a touchy subject. At least for women.
The collective inhale taken at the start of the September Mod monthly gathering when the topic was introduced demonstrated how reluctant we are to approach the subject. And yet, most everyone who participated seemed to understand that it was a subject we needed to be more assertive about.
Opening up and fostering more money conversations, is the key to developing a better relationship with money in general. Even more important, each woman needs to consider her relationship with money.
"Women need to start getting more serious about how they interact with the business world if they want to be in more boardrooms and own more powerful businesses," says Melanie McFaddin, Managing Principal at the McFaddin|Metis Group and Mod attendee.
WHAT IS WEALTH BUILDING
Traditionally, women have been responsible for making do with what they had - the paycheck that their husbands brought home or the small earnings they were able to make doing small jobs, for example. Women were expected to take care of everyone in the household based on this finite amount of money. She was tasked with "making it work". Even if that meant she went without.
Today, women have more opportunities than ever to generate more income, whether through the traditional corporate route, small business or entrepreneurship, but our relationship with money hasn't evolved. All too often, we still allow our incomes to dictate our life and career decisions.
"Women need to get serious about growing wealth," says McFaddin.
TAKE KAREN FOR EXAMPLE.
Karen started her own business. Because she didn't want to risk the security of her family, she used a small savings and a small infusion from her parents to get started. She hung out her flower store shingle and started networking and spreading the word through a few marketing campaign efforts. After six months, Karen was booked full-time with regular orders and a few weddings. She was making enough to cover her costs. But that was it. She was managing to her needs.
It wasn't until Karen sat down and clearly calculated what profit she needed to achieve in her business in order to take it to the next level that she started thinking with a wealth building mentality.
When she saw how her business could be generating wealth instead of just paying the bills, she had an "ah-ha" moment. She made a few minor adjustments in her business plan - increasing her pricing to ensure profits after expenses, building a relationship with a local banker who could help her source financing opportunities and planning for growth. She's now in control of her money , her business and - ultimately - her destiny.
Here are three steps you can take NOW to start making the shift. These will work whether you use them to improve your personal wealth or to grow your business, and the moment you start directing your attention to this vital area, you'll see quick results.
1. KNOW WHAT YOU WANT AND BE ABLE TO ARTICULATE IT.
Wealth management is about defining your goals are and then creating a financial plan to get there. Are you looking to start and run a lifestyle business that will provide you with a comfortable personal income but that doesn't require you to employ anyone, need outside capital or commit a whole lot of time? Or do you have that amazing idea that's going to be the next big thing? Once you define your business goals, you can begin defining what you need to achieve them.
2. KNOW YOUR NUMBERS.
Once you've defined who you are and what you want from the money you have, you can begin to assess the gap. Where are you now? What do you need to get where you want to go. Think in terms of training, contacts, associations as well as the amount of money you need. Some of these will require a monetary investment but have the potential to deliver valuable returns.
Knowing your numbers can be a confidence builder too. Once you've laid out a clear path to your goals, you've also clarified where you don't need to or want to go. Having articulated or eliminated options such as various equity/funding solutions, you can move faster and farther down your chosen path.
3. KNOW YOUR RESOURCES.
With your goals and numbers under your belt, you're ready to explore what funding opportunities might be available to you. Women tend to be risk averse in general and are often resistant to taking loans or giving up part of their company to an investor. That's not a completely bad thing.
"It's important to look for smart money when you turn to outside investors," says McFaddin. "The most expensive form of capital is equity and outside (non friend and family) investment taken in at an early stage." says McFaddin.
She recommends building a network of financial advisers to help you understand your options and evaluate opportunities.
"Start up a relationship with your local banker, talk with investors or investment mentors at the EC [Nashville Entreprenuer Center] about your business ideas," says McFaddin. "They'll help you understand quickly whether you are on the right track with how you envision the various aspects of your business and what your growth options are, as well as what steps you need to take to reach your goals."
She also counsels to carefully evaluate potential investors in your business by what they bring to the table in addition to the money. This means assessing what information or expertise they are willing to bring to the table to help you grow your business. Are they a leader in your industry or intimately connected to one? Do they sit on any boards that lead or influence your industry? Do they have a particular expertise that will help you grow your business and that they will share with you?
YOUR NEW MONEY RELATIONSHIP
Making a fundamental shift in thinking about money isn't easy but it's necessary for any women who defines success as more than just "getting by".
The good news is that the steps you need to take are simple and often free or at least inexpensive. You just need to get out there and ASK!
Thinker. Tinker. Builder. Connector. Tammy Hart is a marketing consultant specializing in helping solopreneurs, startups and small businesses build unique messages that create meaningful customer connections.She draws on an extensive background in content marketing, public relations, publishing and painting to develop results-oriented, cost-effective marketing strategies that are doable.