By Teresa Dentino (Founder & CEO, The Financial 411)
Women’s vast economic power having finally been recognized, it’s time to think differently and own our relationship with money and our business finances.
Having a clear understanding of the nuts and bolts of finance that affect your bottom line gives you a leg up over any competitor, and, not least, with every potential investor or funding source.
Financial literacy is within reach of every woman, and not just those who excel in math. (When was the last time you actually did math with a pencil and paper? That’s what calculators are for!)
Financial Literacy: Reading The Numbers
The good news is you don’t have to become Warren Buffett in order to grasp conceptually the purpose of the numbers, and learn how to talk the talk of “revenue models” and “profits”. It’s time to take this discussion into the realm it belongs – not gender-centric, but sound business-savvy-centric.
You may have the greatest concept, project or startup on earth, but with “profit” and “scalability” being the conventional measures of successful ideas among those whose attention you’re trying to capture, all the technical know-how and whiz-bang disruption isn’t going to put you out in front of the pack. Getting down with the numbers packs a double whammy. As you assimilate a bottom-line mentality, you’ll become better at owning your personal finances as well.
Serial entrepreneur Patricia Handschiegel, creator of Stylediary and author of The New Power Girls at the Huffington Post, had this to say in a recent INC interview about one of the mistakes founders make:
“Pitching feelings, not cold hard cash. A lot of women pitch their startup by talking about how they feel about their product and how great it is, in essence “clogging it up with themselves.” And men do this too. But what a VC wants to see is how it’s going to make money. “It’s all about the money, and that’s really the end of it. When you’re looking at investment capital, they’re in it to make money so the play is the money.”
Thankfully, woman-to-woman, Handschiegel serves it up bluntly. I think men are tippy-toing around the subject for fear of being controversial. But let’s call it as it is.
I still encounter way too many women whose eyes glaze over at the mere mention of finance, and sadly, I see they’re still buying into the myth: “I don’t do math.”
Admittedly it can be daunting, and I acknowledge the sociological, institutional and practical challenges that are a real part of the equation, but it doesn’t have to be that way.
Time to change the paradigm on all fronts!
The Practical Challenges
So the numbers don’t scare you but the reality of time constraints and time management rightly gives you pause. About now you’re wondering where you could possibly find more time for taking on a new discipline; already the demands of running your startup and juggling your other life responsibilities have you consuming more than a reasonable share of Red Bull and caffeine. Thankfully you don’t have to become a “quant head” in order to savvy-up.
To get started: Keep it simple and break it down. Without jumping headlong into cash flow analysis and financial ratios, start with evaluating all the decisions you make on a daily basis that have bottom-line consequences.
Ask yourself at each juncture: Is there anything I can do right now to improve the bottom-line (profit) impact? Simply developing this essential mind-set is one of the first key steps in the right direction.
In future columns we’ll discuss some tactical tools for developing a more global view of your business operations and how to get down with the numbers in a way that doesn’t require you to start wearing a pocket protector in order to demonstrate your baller financial acumen.
Over the last thirty years, I’ve taught hundreds of non-finance women how to think in these terms, and simultaneously I teach financial firms the subtle differences for making finance relatable to women. If we all do our parts to shatter outdated paradigms, there will be few barriers left to keep women and finance divided any longer.
Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.
About the guest blogger: Teresa Dentino is the Founder and CEO of The Financial 411, the first financial literacy platform to be exclusively women-centric. Working with select private clients and financial institutions, she provides strategic advice and independent educational programs that bridge the gap between women and the financial world. Teresa teaches Managerial Finance Fundamentals in the University of California academic system. Follow her on Twitter at @thefinancial411.