Today, we are so excited (we’re talking kid-on-Christmas-morning excited) to share that we’ve been working with the brilliant minds behind Ellevest, an investment platform designed specifically for women. Why is a female-minded investment option needed—money is money after all, right? Well, not exactly. The current investment industry is built around men’s salaries, men’s life cycles, men’s preferences, and men’s lifespans—all of which tend to be vastly different from women’s salaries, life cycles, preferences, and lifespans. Ellevest, then, uses an algorithm tailored specifically to address women’s income and life cycles—it takes into account the fact that women live longer than men, might take maternity leave, and make less on the dollar on average than their male counterparts.
Today, then, we sat down with Sallie Krawcheck, Co-Founder & CEO of Ellevest, to talk about how to start and how to fund your female-owned business. Read on for our top takeaways from this ever-insightful conversation.
1. Find Your Light-Bulb Moment
Every successful business starts by solving a problem. Think of a problem that needs to be solved and more importantly, consider whether you’re passionate enough about it to be the one who solves it.
When I decided to start Ellevest, it wasn’t because I woke up one morning and thought, ‘Today I’m going to be an entrepreneur,” Krawcheck said. “It was because I was passionate about a problem that no one else was solving, and I asked myself, ‘If not me, then who?
2. Don’t Quit Your Day Job...Yet
Once you’re ready to take the leap, the next step is to research...and research...and research before you make any sudden life changes. Whether you’re looking to start your own floral design studio, wedding-planning business, or catering company, you’ll want to research (and test) the market before you hand over that two-weeks notice. Visit your competitors both in person and online—what are they doing that works, and what are they doing that falls flat? Who is their target audience and is that the same target you’re trying to reach? How can you set yourself apart—how can you be different from and better than other similar options on the market? What price point works for your market and your ideal client? Having all of this mapped out beforehand—while still understanding that it will inevitably shift down the road—will save you a ton of headaches down the road.
3. Bulk Up Your Savings
If you’re considering starting your own business, you’ll find no better friend than your savings account. Most financial experts say it can take two years to find out if your business is working. Because of that, the experts at Ellevest recommend having two full years’ of your current take-home pay saved if you won’t be taking a salary as a new business owner. That may seem like a lot—especially for those of us who struggle to have a few months’ worth of pay saved—but it’s totally feasible if you attack it in manageable chunks. Sit down and figure out how much you need to save each month to get you there, and how long that will take all together. Map out a plan for putting away as much as you can afford to each paycheck. This may seem tedious and time-consuming, but jumping head-first into a brand-new business without enough backup cash in the bank can often mean closing your doors as quick as they opened. Take the time to create a comfortable cushion you can survive on, so that you can concentrate on building your business—rather than worrying about how you’ll make your mortgage payment—during your first few years as a new business owner.
4. Get Your Business Plan Together
This step can intimidate people, but it’s absolutely necessary (especially for those seeking funding from outside sources). It doesn’t have to be a novel or expertly designed—the important thing is that you get your plan down on paper (or in a digital doc). At the least, your business plan should include your mission statement, target audience, projected revenue model, marketing and sales channels, and cost structure. If you’re not sure where to start with any of it—not to worry. Consider looking for educational opportunities in your community that might help—local colleges often offer community classes on building your own business-plan. You can also consider hiring a freelance marketing/business consultant if it’s in your budget to do so.
5. Get Funding
Ah, the step we’ve all been waiting for. You’ll want to start by determining how much you’re able to “bootstrap” your business. (“Bootstrapping” means you maintain full ownership of your business by investing your own dollars in it, rather than giving up equity to investors.) If you think you’re interested in going this route, start saving and investing toward your business goal right away—Ellevest even offers a “Start My Own Business Goal” option. If you’re turning to investors, keep in mind that you want to have some skin in the game, so still make it a point to invest your own money—however much that may be—in addition to sourcing extra funding. Keep in mind that female-focused crowdfunding and accelerator options are always available—we like Plum Alley, Astia, and Springboard Enterprises. We also love Broadway Angles, Pipeline Angels, Portfolia, and Golden Seeds for female-focused angel investing options.
6. Don’t Forget to Become a Certified Woman-Owned Business
One last thing (we promise!): If your business is 51% or more female-owned, you’ll definitely want to take the time to become a certified Woman-Owned Business. It may seem like an added novelty option, but don’t be fooled—certifying your business in this manner can absolutely mean the difference between scoring that big client or losing them to another business. Government agencies especially give weight to female or minority ownership during the competitive bidding process. You’ll need to provide documentation, and the process can take up to 90 days—but it’s absolutely worth it if it’s the deciding factor that gets you chosen for that big project.
When it comes to starting and funding your own business, there’s obviously a ton to consider—but so much of it comes down to being proactive and making smart, strategic financial decisions. Remember—attacking that financial to-do list of yours may seem scary, but it all comes down to tackling one small action item at a time.
Ready to take the leap and start saving for all of those hashtag-business-goals of yours? Head to Ellevest today to take advantage of their FREE Investment Plan!