That doesn’t mean, however, that women entrepreneurs are embarking on their business journeys without challenges. And in some cases, they may be making mistakes that have a direct impact on their long-term business success.
Knowing where the biggest pitfalls lie can help women entrepreneurs stay on the right track to success. With that in mind, here are the costliest mistakes women in business should be careful to avoid.
Taking risks is part of being in business, but it’s something women may be more likely to shy away from than men. A willingness to take risks—whether it means introducing a new product line or taking a gamble on a marketing campaign—could make a substantial difference in how quickly your business scales and grows.
Stepping away from risk can also backfire when it comes to raising capital if you’re trying to attract the attention of investors. While 19% of male business owners receive funding from angel investors and venture capitalists, just 11% of women entrepreneurs do. Being afraid to put your business out there could result in not getting the funding you need to grow to the next level.
Starting a business often means there’s a degree of uncertainty involved since you may not know how your product or service will be received. Flexibility and adaptability are important since you may need to be able to pivot quickly to keep up with the competition. But it’s possible to be too flexible—a common mistake many women entrepreneurs make.
For example, you might be getting your first customers, many of whom want to pay on credit. So you agree, only to find yourself in a cash crunch because they aren’t paying their invoices promptly. Now you may be having to pull money from your personal reserves or taking out a loan to fill the gap.
Getting the right systems in place during the early stages of your business can help avoid situations like that. For example, establishing your credit terms in writing and setting up an automated accounting system to track invoices can head off many of the headaches that go along with letting customers pay on credit.
If you’re starting a new business, it may be more cost-effective to be your only employee. After all, if you don’t have anyone helping you, then you don’t have to worry about covering payroll.
But that type of arrangement doesn’t always work once you’re ready to start expanding. If you continue to try and do it all yourself, all the time, then you could be on the fast track to burnout, which is something many women already contend with even without owning a business.
Burnout is dangerous because you may not have the physical or mental energy to work on your business. But you can avoid this situation by outsourcing less-important tasks you don’t have time for, hiring staff to help or crossing nonessential items off your to-do list altogether. By prioritizing your time, you can conserve your energy and stay productive in your business.
Bootstrapping has its merits, and using cash to fund a business is a strategy many women business owners adopt. While 34% of men seek financing for their businesses, just 25% of women do.
There are some good reasons to steer away from outside financing when starting or growing a business. With equity financing, for example, you’re sacrificing some of your ownership control in the business to get funding. And with debt financing, you’re creating financial obligations for your business that you’ll have to pay off with interest.
But there are also good reasons to leverage financing for your business. For one thing, the cash you have on hand may not be sufficient to cover your initial startup costs or keep your business afloat until you begin generating revenue. You could borrow money from friends and family, but that’s not always an ideal option, especially if you’re not able to repay them right away.
A business loan, line of credit, or even a business credit card can help you cover expenses for your business while preserving cash. And if you have a solid credit score, you may be able to qualify for financing at favorable terms that don’t put a strain on your business’s finances.
Comparison is the thief of joy, but it’s an all-too-easy mistake that many women entrepreneurs make. Comparing your progress in business to other women entrepreneurs is problematic because it can keep you from staying focused on your own goals and plans. Not to mention, every woman’s business journey is going to be different.
Instead of looking outward at what others are doing, try to keep your eyes on your business’s prize. Make sure that you have the right systems in place to lead to success. Work on building out your professional network so you’re connecting with the right people. Review your goals to make sure they’re realistic and actionable.
The more you concentrate on your own efforts, the easier it becomes to tune out the noise and make progress in your business. Remember that nothing is perfect when it comes to business. While mistakes may happen, you can use them as a learning experience so you don’t repeat them later.