Abigail Vazquez, Financial Representative with Northwestern Mutual
Today, women make up 61% of the participating Hispanic labor force, and they’re showing no signs of slowing down. The number of higher education degrees awarded to Latino students more than tripled since 2016, with Hispanic women earning 60% of those degrees.
These statistics are painting a bigger picture in which more and more Latinas are setting higher expectations for themselves, achieving career goals and gaining the confidence to create their own path to success.
To some, success means taking the entrepreneurial leap. A recent study shows that about 1 out of every 7 businesses is run by a Hispanic American entrepreneur. More specifically, Latina-majority owned businesses totalled nearly 1.5 million in 2017, representing an 87% growth since 2015.
According to a study from Northwestern Mutual, women are motivated to start their own businesses in order to achieve a better work and family balance. Although there has been a shift in how Latinas choose to live their lives, traditionally Latinas are more likely to be married, have children and have larger families, according to the study. Latinas also self-identified as creative, willing to take risks and open to new ideas – unleashing the idea of becoming an entrepreneur and aiming to achieve the American Dream.
Taking the leap to become your own boss in order to create the career you’ve dreamed about is possible with the right resources, support team and dedicated work ethic.
Whether you are just getting comfortable with the idea of becoming an entrepreneur, or if you’re a seasoned business owner – here are four essential financial planning tips for the modern day entrepreneur. ¡Ahora, échale ganas!
1. Develop or review your business plan: If you’re new to the entrepreneurial world, developing a business plan can seem daunting. Focus on developing simple, straightforward strategies such as outlining your ideas, and setting short-term goals like finding your personal business niche or visualizing your ideal career. As you begin to develop your business, your plan should develop as well. After all, this plan will be the roadmap you follow to achieve your goals.
If you’re ready to dive into a more formal business plan, prepare to write a document that includes an executive summary, business description, market research, organization and management structure, service or product lines, marketing and sales strategy, funding approach and financial projections. This comprehensive plan will help you as you begin or continue to present your business to potential investors.
2. Build your team: No matter how much experience you have in owning a business, you will always need a support system and business team to rely on. Sit down and make a list of potential tasks that could be assigned to others. Talk with your family and friends, business partners and members of your community to seek out skills and traits that may be useful for your growing business. Reach out to other female-led businesses or entrepreneurs for advice and to learn how they “get it done.” Financial experts can also help you navigate and understand the funding needed to build your team, in addition to providing you with quarterly or annual support that can have positive long-term effects on your business.
Having a group of volunteers or employees with assigned jobs or small duties can jump-start the momentum you need to launch your business or keep it growing.
3. Open a business account: If this step wasn’t included in your initial business plan, add it in – you’ll thank me later! When starting a business, you may not be focused on making money quickly, but it does happen. And for busy business owners or new entrepreneurs, the personal and professional often get blurred – including money. Mixing family and business finances can get messy fast, especially if you’re a mamá trying to take care of business and get the grocery shopping done at the same time. That’s why it’s crucial to keep personal finances and business finances separate as much as possible. Talk with your financial advisor to discuss your options for opening a business account. Having separate accounts from the very beginning will help you keep your balance sheets and mind organized.
4. Reduce or pay off your debt: Debt is scary and looking at one large number can feel overwhelming. Assess that large number and break it down piece by piece to help you determine what is possible to pay off. Then, develop a reasonable payment plan and timeline to help you pay off the entire debt. Although not required, reducing or paying off your debt can result in significant benefits for your business. Reducing your personal liability can make you and your business more appealing to investors, increasing your chance of receiving funding and lower interest rates. Don’t tackle this alone. Connect with your financial advisor to discuss payment plans, consolidation and other available options.