Navigating the Financial World: Essential Advice for Women-Owned Businesses

It’s hard to believe that it wasn’t until the mid-1970s and the passing of the Equal Credit Opportunity Act that women could finally access the financial products they needed to create or build their own business. Remembering these discriminatory practices underscores the need to celebrate Women’s History Month and reflect on the incredible progress that has been made.

Today women are at the helm of businesses of all sizes in all industries. The Women’s Business Enterprise National Council (WBENC) reports there are 13 million women-owned businesses in the U.S., representing 42% of all businesses.

We spoke with two of these successful entrepreneurs – Ellie Schmitt, owner of Salon One in Evansville, Indiana; and Kate Potter, owner of screen print and embroidery business American Honey and Dwell Coffee Shop in Haubstadt, Indiana – along with Stephanie Ewing, commercial banker at Old National Bank (ONB), about financial advice that can help women business owners succeed. Here are some of their top tips.

1. Make sure your finances are on solid ground.

Before you throw caution to the wind, you want to ensure you are adequately prepared. Schmitt suggests women be diligent in saving before they jump into a new venture. “People don’t mention this a lot, but success doesn’t always happen overnight, and you need to be prepared for anything that could come your way,” she says.

In Potter’s case, her family was already used to living on just one income so she was able to avoid a financial shock she might otherwise have had by pouring her financial resources into her business. “We hit the ground running and saw a profit the first year,” she says.

However, building up an ample financial cushion doesn’t mean you need to have saved every penny that you need for your business, says Ewing, adding that often financial assistance can be in the best interest of your business. In her experience, women are more apt than men to bootstrap their business using their own personal funds or tapping family and friends.

“Women are often afraid of debt and are leery about the risk of a loan, yet I find they may not understand how taking on an appropriate level of debt can actually allow them grow their business,” she says. “Especially over the past decade with interest rates historically low, it can be very affordable to get a loan, which allows you to leverage your balance sheet for growth.”

2. Surround yourself with accomplished advisors.

Potter was unaware of the amount of taxes she would owe during her first year in business and sought the advice of an accountant, who recommended she shift her company structure to become an S corporation. “There was a giant learning curve, yet having a really good accountant made it feasible,” she says.

When Schmitt applied for a business loan, she was asked for her business plan, something she had never created before. That’s a common request, Ewing says, recommending that women business owners look into working with SCORE, a resource partner of the U.S. Small Business Administration (SBA) that can connect you with volunteer business mentors.

And, Ewing is quick to note the assistance and counsel a business banker can offer to help you know more about small business loans and if they are right for you. She also echoes Potter’s suggestion of relying on a savvy CPA. “You want to have someone in your corner who can make sure you’re taking advantage of everything that's available to you tax-wise and in other financial areas.” Many women business owners also find it helpful to build relationships with an insurance agent and attorney.

3. Find a business banker you trust.

Schmitt’s father owned his own company and served as a role model for her eventual purchase. He put her in touch with his trusted banker at Old National Bank, who helped her secure her first loan. “We made an instant connection; they believed in me from the start,” she says. “I always felt like they were on my side, and it feels good to know there’s someone you can call with any questions.”

However, she acknowledges, not everyone finds that relationship immediately, so she recommends meeting with several business bankers to find someone whose style resonates with you. “It's very important, especially with finances, to feel you've got someone on your team,” Schmitt says.

4. Take risks confidently.

Finally, women business owners should remember they might not always face smooth sailing, but it's ok to take smart risks. Says Schmitt, “Confidence is everything, whether it’s about your services or your business plan or your next move,” she says. “Know what you bring to the table and project that to earn the trust of your key partners.”

Are you wondering if it’s time to start or scale up your business? Talk to an Old National small business banker today about the options available to help you finance your dream.