Did you know that women-founded companies almost always outperform companies founded by men, but women receive less funding, ask for less funding and have a harder time securing funding than male-owned companies? There are many factors that play into this disproportionate reality, one of them being that women don’t ask for money like men do — in all aspects of life, especially in the workforce or when it comes to entrepreneurship.
That’s why we made this guide to help you equip yourself with the tools you need to gain access to funding, open doors for your business, and secure the money you need to get your business off the ground and growing.
There are many different kinds of businesses that women create. With that being said, one size doesn’t fit all and you may need to adapt some of these steps to fit your specific needs, plans, and goals. However, each of these steps can be applied to your journey to financing your business.
Create a Business Plan
Before you start looking for any financing or funding for your business, you will need to create a business plan. These plans will help you outline your financial needs and goals for your first few months or years in business. When you are looking to secure funding, many investors will ask for a business plan, a valuation, or proof of sales so that they can better determine if this is a good investment opportunity for them.
Outline Your Startup Costs
Every business will have startup costs of some kind — whether you have a physical storefront or shop or you are running an entirely digital business online or through social media. Outlining these startup costs upfront will help you better understand your financing needs. While a digital business may not require a lot of upfront costs, a physical business like opening a hair salon or beauty business may require you to spend quite a bit upfront on salon equipment. Purchasing things like equipment for your business may be pricey, aside from looking for an actual physical space to open your salon or spa, which is why you can always look into initiatives or options like salon equipment financing to help you offset the costs you will experience before your business even opens.
Think Long-Term and Quality
If you’re opening a physical location where you will need to fill your shop with things like salon chairs, which are integral to operating your business successfully, you should focus on quality equipment at an affordable price from a reputable company. While cheaper, low-quality items may get your business started, it could be a while before you see a profit, which means you will need to keep expenses down during the early days of your business.
Investing in quality equipment upfront is worth it and guarantees that you will be able to run your business as well as you need to. And purchasing from a reputable supplier will ensure they will be around if you need replacements or parts down the road
Search for Grants
As a woman-owned business, there are many opportunities to secure financing and funding that don’t have to be loaned or take up equity in your business. Check out your regional and state government websites to tap into any local initiatives and grants that may be available for a woman-owned business. Some of our other favorite places to look for grants are:
- The Girl Boss Foundation
- U.S. Small Business Administration
- U.S. Economic Development Administration
- Amber Grant Foundation
- Eileen Fisher Woman-Owned Business Grant
- National Association for the Self-Employed
Self-Fund or ‘Bootstrap’ Your Business
While this may not be an option for every business owner, many women bootstrap their business. Bootstrapping is known as putting your own money into your business to get it up and running and profitable. When you are self-funding your business, you will need to make sure that you stick to a strict budget — as all business owners need to. Putting your own money into the business could be a risky endeavor, but it’s an option that many women turn to as it could be hard to secure funding through venture capital or other avenues. If you are bootstrapping your business, it could be a smart idea to set a dollar amount or limit that you don’t feel comfortable surpassing when it comes to pouring your own money in. This can help you stay practical and realistic.
Explore Crowd-Sourced Funding
Have you ever heard of Kickstarter or Indiegogo? These websites help businesses gain funding from everyday people. Whether you have a large social media audience or fan base, or you have multiple people who have expressed interest in helping you with your business, crowd-sourced funding could be a great option for you.
And the best news is that women are highly successful when it comes to crowd-sourced funding.
Look Into Small Business Loans
If you have explored the possibilities of grants and crowd-sourcing and you still need some extra cash, you could take out a small business loan with your bank or any other financial institution. Always make sure to ask your bank if there are any credits or loans that are catered toward women-owned businesses to make sure you lock in a great rate and any additional benefits that may come with the loan.
Entertain Venture Capital
If your business is going to require a lot of funding — more than $100,000 — you may want to look into the possibilities of venture capital. Venture capital funding is a great avenue to go down if you have a unique product or digital idea that you’re hoping to scale and sell in a big way. To secure venture capital funding, you can always approach a venture capital firm where they can help you with everything from getting started to finding a venture capitalist to help you fund your business.
We wish you the best of luck with your business endeavors, and we know you’re going to kill it out there!