Charging Your Worth: Financial Tips for Women in Business
It's true: being a woman in business is certainly not the easiest thing in the world. Though we rarely discuss it (especially publicly) the challenges involved in the workplace or in running your own business as a woman are very real. I recently got together with two other women, Pallavi Gurrala and Marissa Grootes, to discuss what it's like being a woman in business – and we captured it all on video in collaboration with Vancity.
TIPS FOR CHARGING YOUR WORTH
Charging what you are worth is almost always a challenge, especially if you are in a creative field, more especially if you are providing a service, and most especially if you are a woman business. As a woman, you may feel like you have to undercharge in order to win the business or you may even feel guilty for asking for what you deserve – and this usually comes from a place of insecurity or intimidation. As we discussed in the video, men usually feel much more confident asking for a tip when they feel they deserve it than women do. You're not alone!
Research your competitors
find out what they are charging, and measure yourself next to them, as objectively as possible.
Use a professional invoicing service
for sending estimates and invoices, work on the industry standard of net-30 for payment terms, and always follow-up immediately when a payment is overdue.
Just do it
Don’t let emotions such as guilt or low confidence weigh in on your business decisions. You do deserve to be paid fairly!
FINANCIAL TIPS FOR WOMEN IN BUSINESS
From having enough financial runway to get your business off the ground to learning the ins-and-outs of cashflow to keep it going, there are many challenges involved in the financial aspects of business which you may not be so familiar with.
Be proactive and hire a bookkeeper
to keep track of your books on a monthly basis; hire an accountant to file your taxes at the end of the year. Don’t try to do it yourself.
Open a business account
and only put business expenses through this account. This will make tracking expenses and projecting future return SO much simpler. Be sure this is connected with your personal account to make transferring/organizing funds simpler and free of extra charges.
Start charging 5% GST
when you project to make over 30K net that year. The key word here is “project,” and your accountant and bookkeeper can help you make this choice. Remember to register a GST Account, but be sure NOT to do this until you’re ready to start charging.
When you start bringing in over 80K annually, it might be time to consider incorporating your business. This leaves you with two options in paying yourself, either a salary or dividends, and this is a change that can provide significant tax savings.
When it comes to tax time, contribute to an RRSP account to reduce your taxable income and invest in your retirement. When you’re ready to start investing elsewhere, be sure to use a TFSA account so that your earnings are not taxable.
That’s all for today! I hope you’ve gained some valuable insights from my tips for navigating the landscape of business as a woman. And more than anything, I hope you feel it in your heart that you can and will make good money, too.