According to the U.S. Census Bureau, just 21.4% of businesses are owned by women. Although this is only a slight increase from previous years, this number is steadily growing. So, if you’re thinking about starting a small business as a woman, you’re in good company.
If you plan and prepare, you can establish a successful – and highly lucrative – business. Whether you’re just starting out or are looking for ways to grow your company, it’s important to create a solid business plan and secure the financing you need to grow.
Planning for Your Woman-Owned Business’ Future Success
If you want to start a successful business, here are some steps to take:
- Create a business plan. A business plan can help you assess how viable your business idea is, and whether there’s a market for it. It can also help you figure out your marketing and sales strategies, as well as set some short-term and long-term goals.
- Get the proper licensing. Your business might need certain permits or licenses to operate, so figure out what those are in your area. You might also need an employer identification number (EIN), which you can get from the IRS. Reach out to your local small business development center to see what you need.
- Join networking groups. Networking is a great way to promote your business, get referrals, stay motivated with like-minded people, and learn how to expand your business. One option is the National Association of Women Business Owners (NAWBO). Other networking groups to consider include your local chamber of commerce, SCORE, and the National Association for the Self-Employed (NASE).
- Secure financing. You’ll need some capital to get started, but you’ll also need to have enough cash flow to expand. Financing options range from small business loans to government grants.
- Meet your goals and continue forward. As you meet each milestone before you, don’t be afraid to set new ones and keep expanding.
How to Secure Financing for Your Business as a Woman
For many female entrepreneurs, securing financing is a major challenge. This isn’t because there isn’t financing available, but rather because there’s still a stigma around debt that keeps many new business owners from taking it on. A lot of people view debt as a bad thing, but there is such a thing as “good” debt.
Good debts are those that can help you out in the long run – such as a mortgage loan, student loan, or small business loan. What it comes down to is learning how much debt to take on and how to use it in the right way.
If you need financing for your business, here are your main options:
- Business loans: A loan amount that is repaid over a set period of time, usually with interest. You may consider using a business loan for needs like purchasing equipment or inventory, expanding operations, or financing a major project.
- Business lines of credit: This is a revolving form of credit that you can continually borrow from (up to a maximum limit) to grow your business. Similar to a credit card, interest will typically accrue on the amount borrowed. You may also need to make minimum monthly payments.
- SBA Loans: The U.S. Small Business Administration (SBA) makes it easier to start or grow your business, while reducing risk to lenders. The SBA backs several types of small business loans. This includes 504 loans, which you can use to purchase business equipment, commercial real estate, or related assets. It also includes microloans, which let you borrow up to $50,000 to launch or expand your business. Contact the SBA for more information.
- Minority Business Development Agency (MBDA): The MBDA can help women and other minorities find financing for their business ventures. It also works with business owners to create a business plan, prepare loan applications, and more.
- Government or nonprofit grants: Several nonprofit organizations offer grants to help women launch their businesses. One example of this is the Women’s Financial Fund. The SBA also offers small grants for things like scientific or technological research and development.
Ultimately, you can start your own small business as a woman – no matter what stage of planning or business ownership you’re at. Take some time to create a business plan and set some goals for yourself. Along with this, figure out the type of financing you need and go for it.