In your opinion, what unique challenges do women entrepreneurs face when trying to raise funds for their business?
Often, entrepreneurs think that if they’ve been in business for a few years, they won’t have any difficulty obtaining additional financing. The reality is that financial institutions review things like the business’ financial performance, credit history, debt to equity positions, debt service ratios, collateral, financial position and the entrepreneur’s investment into the project. Add in the net worth and skills of the entrepreneur and accessing financing may be a challenge. A solid business plan showing why the business is viable and how it will pay back the funding is an important tool in helping the financial institution assess the risk.
There can be even greater challenges obtaining funding when a business is starting up because there is no history to show the financial institution. In this case, a business plan that demonstrates viability becomes even more important. The Women’s Enterprise Centre of Manitoba offers aBusiness Plan Development Workshop series, and can review and critique your business plan free of charge. This important process will not only demonstrate to a financial institution that your business is viable, it will also prove to you that your business concept and strategies are the right way to go.
Women may face greater challenges obtaining financing than males for several reasons including: more time spent at home raising a family results in fewer earning and saving years, and less work experience which in turn means starting businesses with less capital and experience. They also tend to select industries where there are fewer growth opportunities. On the positive side, women usually have as much or more education than their male counterparts; and they tend to start businesses to meet a family or social need, which not only benefits the entrepreneur but their communities and clients.
What gives you the most satisfaction at the end of the day in your work with the Women’s Enterprise Centre of Manitoba?
Our entrepreneurs are incredible and inspiring women who seem to have endless energy to invest in their businesses. When they encounter a stumbling block they look for solutions rather than throwing in the towel. If those stumbling blocks are big, they ask, “How can I make this work? What changes can I make? What opportunities are there for me in this situation?” It is inspiring to see their growth, successes, and achievements. Given the revenues they produce and the jobs they have created, they are making a huge impact on our economy.
What would you say are the most important factors that entrepreneurs should keep in mind when accessing financing for their business?
One of the biggest keys to the success of a small business is the entrepreneur herself. It is important to know yourself, and understand if you really are an entrepreneur and have what it takes. Your skills, education and experience are hopefully in alignment with your business. It is important to have your personal financial life in order, and maintain a good credit history in order to access financing. Having the support of your family and other professionals is important.
Also important is the strength of your business plan. Your plan will demonstrate the level of capital you will be committing, your analysis of your market and competition, the direction and strategies of your business, as well as financial projections that demonstrate you can not only cover the costs of your business, but pay off the financing.
Our last featured staff member, Cindy Ruth, wants to know: What is an activity you do to wind down and combat stress?
My favorite activities to manage stress are yoga, walking, time with friends and family, and an Epsom salt bath before bed.
What question should we ask the next featured staff member?
What is your best time management strategy?