"...ultimately for the sake of your employees, the clients you serve, and your family who are depending on you to secure their financial future...we MUST put proper protections in place."

In the dynamic world of business leadership and entrepreneurship, where success often comes only after facing multiple challenges, every savvy woman knows that there is a balance to be struck between focus on scaling...and consolidating your gains to ensure you have a stable platform for future growth.

Beyond the day-to-day operations and strategic decisions, there are key aspects of the Financial System of a business that every woman should know!

Sadly, early on in my business I was forced to watch as the family of one of my clients learned this lesson the hard way. I tell the story inside my new book From Hustler to InvestHER which is now available!

Having seen what can go wrong when we women are NOT educated on how to bulletproof your family's financial future, here are 5 things every business woman ought to know!

1. Business Budgeting Is Completely Different Than Household Budgeting (...And Just As Vital)

There are several very important differences between managing personal or household finances, and managing the finances of a business.

Household budgeting is completely different than business budgeting. When you shop as a mom or household... you're buying things to consume them.

Utilities and food, once consumed are gone forever and to obtain their benefits again, we need to re-purchase them. A car, whilst it will provide us with a benefit long term, is also consumed over time and needs to be replaced. Even a home we have purchased – when we extract more value than a roof over our heads, at some point the value we obtain will lose its luster and we may want to replace it.

• Household finances are therefore a consumption based model.

• Business finances are a cash-generating model.

The Financial System of your business exists to help you keep income higher than your expenses, and make it possible to achieve the basic purpose of the business.

You give every dollar a "job" based on what you think is the best use of business funds, and then go back and compare your plan with reality to see how you did.

A business owner who isn't assigning a "job" to every dollar at the beginning of each month, and then comparing their plan with reality at the end of the month is missing a key piece of the Financial System.

So long as marketing and sales are easy, this may not matter. But the moment a recession hits, sales falter, or the market changes...suddenly the business owner finds they are spending more than they make and will struggle to be profitable.

2. Proper Planning Prevents Piss Poor Performance (...Especially During A Disaster)

Disaster preparedness is a critical aspect of protecting your family's financial future as a business woman. The emergency you never saw coming (and didn't plan for) will always hit harder economically than the scenario you're fully prepared to have happen!

My dad owns a disaster restoration business and growing up I saw how devastating it can be, emotionally and financially, when a family isn't prepared.

The first step is conducting a thorough assessment of the potential risks your business may face. This involves evaluating your location, industry, and the specific nature of your business. Consider factors such as geographical vulnerabilities (e.g., earthquakes, floods), industry-related risks (e.g., cyber attacks for tech businesses), and other potential threats.

Once you've identified the most likely disasters your family & business are at risk for, the next step is to come up with a plan so you're as prepared as possible (without turning into a crazy prepper stashing 1,000 bags of cornflakes in a bunker!).

A good Disaster Plan has two component parts:

1. Logistical Preparedness

This includes establishing evacuation procedures, securing important documents and data, and setting up off-site backup systems for critical information. Consider the logistics of maintaining business operations during and after a disaster, such as remote work capabilities and alternative suppliers.

2. Financial Preparedness

Obtain the appropriate insurance coverage for potential risks, such as property insurance, business interruption insurance, and cyber insurance. Ensure that your coverage adequately addresses the specific threats your business may encounter.

Regularly review and update your insurance policies to reflect changes in your business operations. Create an Emergency Fund to cover immediate expenses, such as repairs, temporary relocation, or operational disruptions.

Ready To Bulletproof Your Family & Business Against Disasters?

Set up a time to meet with me and create a FREE tailor-made Disaster Plan! Work with my team of licensed insurance agents to shop the best insurance for your family & business

3. Debt Is Only Bad If The Annual Interest Exceeds Your Returns

Effectively managing debt and building business credit are an important part of "adulting" in the US today. But many American business women obsess over living a "debt-free" lifestyle...and miss opportunities to scale quickly and purchase investments that might make them wealthy.

A better approach is to use my OWL Method to earn interest on your debt instead of letting it cost you and use the below resource to find outside sources of funding so you can build wealth much more quickly!

Free Guide: STOP Risking Your Own Money & Personal Credit To Build A Business (or Invest)!

4. A Lady Never Leaves Her Shield Behind When She Rides Into Battle (P.S. - Legal Is Your Shield)

Okay, probably I read one too many Sarah J. Maas novels to come up with that title to this next section, but it's true: what is a Viking Shield-maiden without her shield??!

Same goes for a business woman. Going into business without a property legal entity (LLC, Corp, etc), letting clients hire you without signing contracts or agreeing to terms & conditions; putting up a website without a privacy policy... Ah! Yep I've got mine. I know you checked below, didn't you ;-)

...all these and more are the many various ways a good business attorney can protect you!

My personal favorite legal resource is The Legal-fluence Lounge by my dear friend Destiny Bounds. (Check her out and if you want to support my blog, let her know I sent you and she'll send me a small finders fee)

In my mind, legal is a lot like medicine: you can pay a few hundred bucks to get your teeth cleaned often...or you can pay a few thousand later to replace them! Preventing the problem is most often cheaper than fixing it once it "broke".

5. Dying Too Early Is The Most Expensive Thing You Can Do

I know that was a morbid beginning...but hear me out:

As a licensed financial advisor and money coach for business women, one of the most heartbreaking parts of my job is dealing with my clients' financials when she passes away.

It doesn't happen often...thank God.

But I've witnessed this enough times to know what happens when a business woman's financial planning is done RIGHT...and when it is not.

Most women don't realize what happens to your money and possessions when you die.

If you own a business and you're married, been divorced, have kids, or parents who outlive you...any one of those people may have a potential claim on the "rights" or ownership of your business when you pass.

To avoid fights in the street over people's possessions, the US Courts System has what is called "probate court" where a judge decides who owns your stuff.

The processes of probate court are long and mostly boring...but the key takeaway here is: a judge will typically take between six months to two years to decide. And during all that time, NO ONE may buy, sell, transfer or trade your money, property or possessions. Including your business.

If you are the sole practitioner or tradeswoman, coach, consultant, healer or expert in your business... and your family relies on your income: that means they have a SERIOUS problem if you die without the proper legal and financial protection in place.

Now, you may be thinking, Well, that's okay. I have life insurance.

Good! Life insurance is a vital part of protecting your family in exactly this type of scenario. But... most insurance companies take typically 60 days to payout.

(Now you see why a proper Emergency Fund is sooo vital! Can your family hold out for 60 days if something happened to you today?)

Statistically speaking, one study showed in 2022 that only 16.4% of family-owned businesses survive the unexpected death of the owner.

If you're like me...you probably started your business out of a passion to serve your community! You don't want your business to die with you: ultimately for the sake of your employees, the clients you serve and your family who are depending on you to secure their financial future...we MUST put proper protections in place.

In our new book From Hustler to InvestHER, Business Attorney Destiny Bounds and I created a checklist to make sure your business and your family are financially prepared:

Let’s check the boxes:

• I earn more than I need for basic expenses. I can pay all my bills and have extra cash left over at the end of the month.

• I have a Disaster Preparedness Plan, have identified the most likely scenarios, and have a fully-funded Emergency Fund to fall back on

• I have life insurance to protect my family, employees and clients in the event that anything were to happen to me

• I have an Estate Plan and Business Exit Strategy my family or employees could use in the event of my sudden demise to ensure the business survives the 60 day wait for insurance payout or up to two years of debate in probate court

• My debts are all income-producing with a greater return than the interest is costing me, or I am debt-free

• I have set up the appropriate business entity for the type of investing I intend to do (as advised by my attorney) and have a high business credit score so I can easily find funding if I need to

• I have consulted an insurance agent and protected myself and my assets from losses too big for my Emergency Fund

• I have consulted with an attorney and protected myself and my assets from potential lawsuit

How many “yes”s do you have?

Summary

So there you have it! Five things every woman should know about money if she owns her own business.

✨Your challenge this week: Pick ONE of these strategies and take action. Are you starting to see the possibilities? Talk to an attorney, network with potential investors, or hop on a call with my team about opening your own OWL account.

If this article helped you, DM me on Instagram (@sarahnicolenadler) and let me know your biggest takeaway!