Manage your Enterprise and Resources to Achieve Your Goals - Start With a Business Plan

7. Learn standard accounting principles.

It's almost a badge of honor in some circles for women to say "I'm the creative type. I'm not good with numbers." Deery says it's time for you to get over that and maybe even go back to school for Accounting 101.

Every business owner should know the standard principles of accounting - not just to write your business plan, but to later be able to predict when your company will make money.

"Most people don't have the basic accounting skills - in fact they have no business skills," Deery says. "Most people don't know the difference between sales and marketing. Nothing is taught in public education in these areas. You can go to college and get a liberal arts degree and still not be exposed to this. Yet there is a myth in America that anybody can start a business.

"The worst scenario is people who work night and day seven days a week and they're breaking even for years. That happens."

Even if you don't handle your own bookkeeping and use those skills every day, you should know where your company is positioned financially at any given time.

"This is one of the reasons I see clients who struggle," Deery says. "They don't want to get into it so nobody is doing it. That's one of the biggest risks in a small business."

Why is accounting so important for an entrepreneur?

"You walk away from your salary and now you're going to start a business," Deery says. "You're going to need startup money either from yourself or somebody else to get you through without a salary for a period of time. And then be able to project when you might be able to take a salary and reproduce the income you had at the corporation. You might be talking two years."

Or you've been in business for yourself for some time and you're still struggling and you're asking, "When will I at least break even? Do I have to do this for another year or am I looking at two years? How much longer do I have to struggle? When am I out of the woods?"

"The key is having enough skill to make that projection," she says. "For some women, if you tell them you can make a projection and know how long it's going to take you to get out of the woods, they will be able to do it by going to SCORE and getting the help. There will be other women who cannot. Those women need to learn more about basic accounting so they can get the confidence to make that projection."

8. Develop your financial plan.

OK, so you know accounting. Now it's time to compile the numbers for your business plan. The SBA recommends this section include:

• An explanation of where you'll get your start-up money and how much you'll need.
• A projected monthly operating budget for the first year.
• An outline of monthly cash flow and return on investment for the first year.
• Projected income statements and balance sheets for the first two years.
• An explanation of when you plan to break even.
• Explanations of how you and other employees will be paid and who will maintain your accounting.

That sounds like a lot of work. Can't you get someone to do it for you?

Sure, you could, Deery says. But you'd be cheating yourself. That's why groups like SCORE work on the financial part of your business plan with you instead of for you. It's what she calls an ugly part of the process all entrepreneurs have to go through.

"They have to know every month what money is coming in and what money is going out by category," Deery says. "They have to be looking at the books every month. That is so ugly to 90 percent of the people. I mean, ugly. But they have to do that. If they're not going to do that, they really should not take the risk of starting a business because they could lose a lot of money."

9. Seek ways to learn business skills.

If you're still working for someone else, then use your time in the corporate world to absorb like a sponge and learn on someone else's nickel. Whether you decide to tell your employer ahead of time, the way Johnson did at the software company, or keep your plans quiet because your supervisor wouldn't take the news so well, be aware of any learning opportunities.  

"They should keep their eyes open as to how things fit together," Greene says. "Even if they're working in one department, watch how that department interacts with other departments. Watch how people relate to each other, how cultures are built, how systems are created. Understand the history of the firm - if it's a new firm, where did it come from? If it's an old firm, how did it grow?

"Lastly, hopefully they're working within the industry they want to start the business in. Learn the industry and learn the connections. Meet the distributors, meet the suppliers. It may eventually be that you spin off from this company, and these will be your first contacts to using your own firm."

This kind of training will make you a stronger entrepreneur, Greene says.

"Everybody's going to make mistakes. If you can have a safe learning environment first, there's a different kind of risk. Sure, there's some career risk maybe, but you're not risking all your financial capital yet. You can almost look at it as an internship."

You might not have time to go back to school for your MBA to learn all you need to know about being a business owner, says Babson College's Greene, a co-author of the book Clearing the Hurdles: Women Building High-Growth Businesses . But check into the classes offered at area community colleges, university campuses, Knowledge Shop facilities, and area offices of the SBA, SBDC, SCORE and Women's Business Centers.

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