As an aspiring small business owner, you’ve been self-funding your vision. You also know that, at some point, you will need to find the right funding to take you to the next level. It is important to start managing your business finances for growth from the beginning. Building your vision includes building a strong financial foundation. You have to position your business to secure funding, and sound financial records are a part of that positioning. In this blog, I’ll show you how to start managing your business finances and provide actionable tips to help you position your business for funding and long-term success.
Understanding Your Finances
Let’s start by reviewing the basics. Before you can effectively manage your finances, it is essential to understand your business’s financial status. This includes your revenues, expenses, profits, and cash flow. You can create a simple spreadsheet to start tracking these expenses. I know a few of you will tell me that you prefer paper and pencil or you have a notebook, however, try and trust me on this – you need a spreadsheet, or at the very least some type of financial tracking system that will compensate for human error. You can try a spreadsheet, like this one. You will need to make a copy to use it. If you are ready to take the plunge with an online system, here is the one I used to get started. It’s free and pretty user-friendly (I’m not affiliated).
If you haven’t opened a business banking account, do that today. It is a mistake to put this off until you have “significant funds or sales”. Start practicing this muscle early and often. Separate and manage your business finances in a separate account. There are plenty of banks that have low opening deposit requirements.
Managing Your Finances
The next step to managing your business finances is to create a budget using the spreadsheet you created in step one. The budget is a financial plan that outlines your expected revenue and expenses over a specific period. It is important to note that the budget I’m referring to here is your working budget, not the budget you created for your business plan. This is where you are going to record what you spend on your business and the amount of money you have invested in your business to cover those expenses.
If you are self-funding your business (and if you are a forced entrepreneur you most certainly are) use this process to manage the integration of your personal life with your business life. Starting a business is a stressful journey and finances will play a large part in that stress. Create a process that helps you manage early financial concerns by determining how much of your personal finances you can comfortably contribute to your growing business. In the beginning, you will want to do this by month to account for unknown changes in your environment. Life is complex and by accounting for these complexities in your budget, you can still grow your business without worrying that you are taking something away from your personal life.
Use the sample budget I linked earlier and put the amount you’ve determined in the first line of the Income section titled “Personal Investment”. Complete the rest of the budget by replacing the sample numbers with your actual numbers.
Positioning your Small Business for Funding
Business funding refers to the financial capital that businesses use to start up, expand, or operate their businesses. There are many different types of business funding, including loans, grants, and investments. Each type of funding has its own set of qualifications and criteria, however, the most important step is making sure your business has sound financial practices.
Why Good Financial Management Practices Matter for Small Businesses
Good financial management practices are critical for any business, regardless of its size. They help you make informed business decisions and ensure that your business remains financially healthy.
But for small businesses, good financial management practices are especially important. This is because small businesses often operate on tight budgets and have limited resources. Without good financial management practices, small businesses are more likely to run into financial problems, which can lead to missed opportunities for growth and even business failure. In addition to creating a budget, here are some other tips to help you position your business for success.
Create a Financial Plan
One of the first steps in good financial management is to create a financial plan. A financial plan outlines your business’s financial goals, strategies for achieving those goals, and the resources required to implement those strategies.
The financial plan is more than a budget. It can help you identify potential funding sources and determine how much funding you need to achieve your goals. It can also help you determine the most effective use of funding and ensure that you have the resources to repay any loans or investments.
Monitor Cash Flow
Cash flow is the lifeblood of any business. Without sufficient cash flow, businesses can’t pay bills, purchase inventory, or invest in growth opportunities.
Small business owners should closely monitor their cash flow to ensure that they have sufficient cash on hand to meet their business’s needs. This means tracking inflows and outflows of cash, predicting future cash needs, and having a plan in place to manage any cash shortfalls.
Small business owners often find themselves bailing out their businesses by covering expenses as they come up. Determining the amount of your personal investment and sticking to that number is an example of monitoring cash flow. The financial plan then helps you identify potential cash flow problems before they become critical and take steps to address them.
Maintain Accurate Financial Records
Accurate financial records are essential for good financial management. Small business owners should keep track of all financial transactions, including sales, expenses, and investments. Simply put, keep track of everything you spend or receive as it relates to your business.
When you have a clear understanding of what’s going in and what’s going out, you can better understand your business’s financial health, identify areas for improvement, and make informed business decisions.
Accurate financial records are also important when seeking funding. Investors and lenders will want to review a business’s financial records to determine its financial health and potential for growth.
Seek Professional Help
You don’t have to go it alone when it comes to financial management. Seeking professional help from an accountant or financial advisor can provide valuable insights into a business’s financial health and strategies for improving it. Learn early that you don’t have to know it all, however, you do need to know how to get the help you need.
Professional help can also be valuable when seeking funding. Accountants and financial advisors can help small business owners prepare financial statements and projections that demonstrate their business’s potential for growth and profitability.
Build a Strong Credit History
A strong credit history is essential for small businesses seeking funding. Lenders and investors will review a business’s credit history to determine its creditworthiness and potential for repayment.
Small business owners can build a strong credit history by paying bills on time, maintaining low credit card balances, and avoiding opening too many new credit accounts at once. They can also establish relationships with banks and lenders to demonstrate their creditworthiness and increase their chances of securing funding.
Diversify Your Funding Sources
Small business owners should not rely on a single source of funding. Instead, they should diversify their funding sources to reduce their risk and increase their chances of securing funding.
Diversifying funding sources can include seeking loans from multiple lenders, seeking investments from multiple investors, and exploring alternative funding sources such as crowdfunding or grants.
By diversifying funding sources, small business owners can improve their financial stability and position themselves for future growth opportunities.
Conclusion
Good financial management practices are critical for small business owners seeking funding. By creating a financial plan, monitoring cash flow, maintaining accurate financial records, developing a budget, seeking professional help, building a strong credit history, and diversifying funding sources, small business owners can position themselves for funding opportunities and take their businesses to the next level.
While implementing these practices may require some effort and investment, the benefits are well worth it. Good financial management practices can improve a business’s financial health, increase its chances of securing funding, and ultimately lead to long-term success.
So if you’re a small business owner looking to position your business for funding, start implementing these financial management practices today. With the right strategies in place, you can achieve your business goals and take your business to the next level.
Accessibility as a Key Component of Diversity, Equity, and Inclusion
Diversity, equity, and inclusion (DEI) have become buzzwords in recent years as individuals and organizations strive to create a more equitable and inclusive society. However, accessibility is often overlooked as a critical component of DEI. Accessibility means designing out any unnecessary barriers that make it harder for people to engage and take part in everyday activities. In this installment of DEI Evolved, we’ll explore why accessibility is integral to achieving DEI and how designing for accessibility benefits everyone.
Why Accessibility is Key to Achieving Diversity, Equity, and Inclusion
When we think of diversity, we often focus on visible differences such as race, gender, and ethnicity. However, diversity encompasses much more, including differences in ability, age, and socio-economic status. If we design products, services, and environments without considering accessibility, we exclude a significant portion of the population from participating fully in society. When we create barriers, we limit diversity and, by extension, limit opportunities for equity and inclusion.
The Benefits of Designing for Accessibility
When we are designing our business, we often think about the average user. The principles of DEI encourage us to think about the disenfranchised user. Who might benefit from your services if there were no barriers? When we design from that premise, we create business practices that benefit everyone. For example:
Improved usability: Designing with accessibility in mind can lead to better products and services for everyone. For instance, subtitles on videos benefit people who are deaf or hard of hearing, but they also benefit anyone who wants to watch a video in a noisy environment.
Increased market share: People with different lived experiences represent an opportunity to increase your business’s market share. By starting with a mind toward inclusivity, your business is primed to evolve as the market evolves, creating a stable customer base.
Enhanced reputation: By prioritizing accessibility, your business can demonstrate its commitment to inclusion and equity, which enhances its reputation and brand image.
How to Design for Accessibility
Designing for accessibility doesn’t have to be complicated. Some essential considerations include:
· Use inclusive language: Avoid using ableist language that may offend or exclude people with disabilities. For example: Instead of saying “wheelchair-bound,” use “wheelchair user” or “person who uses a wheelchair.” Describing someone as “wheelchair-bound” suggests that their wheelchair is a negative constraint on their life, when, it’s simply a tool that helps them navigate the world. Using person-first language, like “person who uses a wheelchair,” centers the individual and acknowledges their humanity.
· Provide alternative formats: Provide alternative formats for information, such as braille, audio descriptions, or transcripts. Start by ensuring that your website is accessible to individuals with disabilities. This includes using alt text on images, providing closed captions on videos, and ensuring that your website is compatible with screen readers. You can also include a statement on your website that acknowledges your commitment to accessibility and provides contact information for individuals who need assistance accessing your website.
· Don’t forget your policies: Create policies that promote inclusion and accommodation. For example, you can have a policy that allows for reasonable accommodations for employees with disabilities, or a policy that ensures that your products or services are accessible to individuals with disabilities. You can also train your employees on how to interact with individuals with disabilities in a respectful and inclusive way.
Check out this website for more tips on integrating accessibility in the workplace.
Final Thoughts
Accessibility is a crucial component of diversity, equity, and inclusion. Designing out barriers is essential to creating a more equitable and inclusive world for all. By prioritizing accessibility, we can create better products, services, and environments that benefit everyone, regardless of ability or background.
As individuals, we can start by being more aware of the barriers that people with different abilities face and advocating for more accessible products and services. As organizations, we can prioritize accessibility in our designs, ensuring that we are creating inclusive spaces for all.
In conclusion, designing for accessibility is not only the right thing to do, but it also benefits everyone. By breaking down barriers, we can create a more diverse, equitable, and inclusive society where everyone has the opportunity to participate fully. Remember that the goal is liberation, and we can’t get free alone.
Nonprofit organizations play a vital role in our society, providing critical resources and services to those in need. Nonprofit organizations feed the hungry, clothe the naked, and make sure children and other vulnerable populations are safe and have access to the resources they need to thrive. Simply put, we have positioned nonprofit organizations as the social safety net for humans who find themselves struggling to survive in our society. Great, right? Well, yes. Established institutions exist to supply a framework and monitoring to guarantee the continuity of society, while businesses that are driven by profit aim to provide a channel for commercial activity. When the organization of society and commerce do not supply an avenue for inclusion of the public (or collaborate to hinder citizens from being integrated into society), it leads to a necessity for a system or agency to assist in the reintegration of affected citizens. Nonprofit organizations were not originally created for the express purpose of infusing justice and crisis response into the society at large; however, it has become the prevailing justification for their continued existence. These organizations are supported by tax dollars and thus they can be tasked with cleaning up after the government and profit-based businesses. Tax dollars are scarce and it’s a big country. Nonprofit organizations are required to be transparent with every dollar spent and to operate within margins so slim that their employees often qualify for the safety net services they provide. So, what do we do? We have conferences and create coalitions and collaborative initiatives to “problem-solve” and come up with creative and unique (read: cheap) solutions to cover the growing chasms popping up all throughout society and threatening to swallow us whole.
Challenges Faced by Nonprofit Organizations
There are many challenges facing nonprofit organizations. Most notably, nonprofits don’t typically have the same profit margins as for-profit businesses, so generating revenue can be a significant challenge. Successful nonprofit organizations must therefore employ various strategies to raise funds and build a sustainable revenue model. In addition, the donor landscape has shifted in recent years, making it more difficult for nonprofits to secure funding. Consequently, it is important for organizations to employ strategies and tactics to help them grow and become more effective. Funding models have changed as well, making it increasingly important for nonprofits to diversify their funding sources. Though philanthropic giving is on the rise, it remains uncertain as to how much it will continue to grow. Moreover, traditional donors are aging, and there are fewer younger generations to take their place. Newer funding models like social impact investing, crowdfunding, and foundations that encourage collaborative partnerships are also changing the landscape. To respond to these changes, nonprofits must find new ways to engage with investors and funders, build collaborative partnerships, and diversify their revenue sources.
Whew! That’s a lot of challenges.
Looking at these challenges from a holistic angle, we see nonprofit organizations stuck in a negative feedback loop. They are asked to stand in the gap for the failures of society while suffering from the same constraints as the individuals they are tasked with helping. It seems to me that the real challenge is holding accountable the systems that create the circumstances that necessitate the need for a safety net. Said another way, it’s time we hold policy officials accountable for creating the very environment that necessitates the existence of these organizations. The government’s refusal to design societal structures that demand a more inclusive capital system has resulted in an overburden on nonprofits, who are left to pick up the pieces and provide essential services to those in need. This is a one-sided bargain. Every year, hundreds of nonprofit organizations spend hours responding to funding announcements, justifying their existence amid worsening conditions. Once they are funded, they spend a large amount of the project year managing administrative and reporting requirements rather than focusing on improving services and outcomes.
A Better Deal
It appears to me that the responsibility of increasing the effect of non-profit dollars rests with the funding organizations, not the groups expected to carry out the services. The present system of funding for non-profit organizations is a prime example of wasted resources going after misused resources. Government bureaus, private foundations, and corporations ask non-profit organizations to utilize their resources and proficiency to mend the gaps in society without a promise to guarantee that the problem in society that necessitated the repair has been solved. Housing organizations reduce the strain on people excluded from the housing market only to return them to the market whose costs have risen even higher. When aid ends and those people are not able to be successful in a market that has grown in its disparity, the creators of the system and market propose that it is somehow the efficiency of the organization that is to be blamed. Why are nonprofit organizations continuing to bear the responsibility of picking up after a society that refuses to change? Why should a housing organization accept money to “reduce homelessness” when they know that there is no housing stock that meets the definition of safe, affordable, and decent?
Accountability Ethics Evolved
Accountability ethics refers to the ethical principles that organizations must adhere to ensure that their resources are being used responsibly and ethically. These principles include transparency, responsibility, integrity, and fairness. Nonprofit organizations should hold their funders to the same principles. Their resources are not being used responsibly and ethically if there is no commitment to changing the social environment that perpetuates extreme disparity among its citizens. If you really want to get spicy about it, it is unethical for nonprofit organizations to create a housing program when they know that their participants will never be able to afford to live independently because the economic and housing markets have already excluded them. Of course, meeting them where they are in this situation will not lead to positive outcomes. Organizations can, however, decide to do the real work of being a social enterprise by demanding changes to the market in which it exists. The challenges that nonprofit organizations face is real and evolving in real time. What isn’t evolving are the actions of the main contributors to the hostile social environment: institutional structures and commerce. It’s time to demand shared accountability. It is wasteful to fund solutions to the problems if there is no commitment to resolving the conditions that created the problem!
Justice Evolved is Liberation
Liberated organizations realize that they are the glue keeping society together and while they tirelessly (and lovingly) continue to serve their neighbors, they push against the institutional structures causing the problems. They are not afraid to make full use of their partnerships with funders and demand that they too take up arms in this struggle. Nonprofit organizations exist to infuse justice into systems that operate free from the restraints of considering the human condition. The evolution of that infusion should lead to a liberated society. One in which our duty to respond is parallel to our duty to repair and restore.
Are you a Liberated Organization? I’d love to hear what you’re doing! Check out our course if you want to learn how to become one.
In recent years, Diversity, Equity, and Inclusion (DEI) initiatives have been at the forefront of corporate strategy, driving cultural change and creating more inclusive workplaces. However, alongside their rise, DEI initiatives are now facing significant resistance. From political discourse to budget constraints and shifting public sentiment, DEI programs are being reevaluated, challenged, or even dismantled in some organizations.
As a leader, it’s essential to understand the roots of this pushback and learn how to navigate these challenges effectively while maintaining the core values of DEI in your organization. Here’s what you need to know.
Understanding the Origins of the Pushback
DEI programs were initially designed to address systemic inequality and create opportunities for underrepresented groups. However, in today’s politically charged climate, some see these initiatives as divisive or favoring certain groups over others. The argument is often that these programs promote exclusion rather than inclusion or that they are unnecessary given existing laws and policies meant to prevent discrimination.
This pushback can also stem from a growing sentiment that DEI efforts are overly focused on symbolism rather than creating tangible results. As such, some critics question the effectiveness of these initiatives in bringing about true equity in the workplace.
Budget and Resource Constraints
In times of economic uncertainty, DEI programs are often the first to experience cuts. For many companies, the financial pressures of a challenging business environment have led to budget reductions or a scaling back of programs deemed “non-essential.” This can leave DEI initiatives underfunded and vulnerable to being deprioritized.
For leaders, this presents a difficult choice: how to justify and sustain DEI investments when resources are limited. The key is reframing DEI as a long-term value proposition, one that enhances innovation, employee engagement, and market competitiveness.
Internal Resistance from Employees
While leadership may be committed to DEI, internal resistance can emerge from employees who feel alienated by these programs. Some may view DEI as imposing unnecessary changes in the workplace, while others may fear that they will lose opportunities in the pursuit of a more inclusive environment.
Addressing this type of resistance requires a combination of transparency, education, and open communication. Leaders must clearly articulate the purpose and benefits of DEI programs, making it clear that they are intended to foster a workplace where everyone can thrive, rather than favoring one group over another.
Political and Cultural Influences
The conversation around DEI has become highly politicized in some regions, with opposition linked to larger debates around “wokeness” or perceived overreach in the pursuit of social justice. This has made it challenging for some organizations to maintain DEI initiatives without encountering external pressure or backlash.
Leaders must walk a fine line in these instances, ensuring that their organizations remain committed to their DEI values while being mindful of the political and cultural landscape in which they operate. A balanced approach—one that focuses on measurable results and concrete actions rather than rhetoric—can help mitigate these challenges.
Finding a Path Forward
Despite these obstacles, DEI remains a critical driver of business success. Studies consistently show that diverse teams outperform less diverse ones and that inclusive work cultures attract top talent and improve employee retention.
To overcome the pushback, leaders should:
Emphasize measurable outcomes: Focus on data-driven metrics to demonstrate the impact of DEI initiatives on employee satisfaction, retention, and performance.
Adapt and evolve DEI programs: Programs should not remain static. They must evolve to meet the changing needs of the workforce and address feedback from supporters and critics.
Invest in education and dialogue: Create spaces where employees can openly discuss their concerns, and offer training to foster understanding and empathy across diverse groups.
Lead by example: Commitment to DEI must be visible at every level of the organization, especially from leadership.
Conclusion
The challenges facing DEI initiatives today are significant and present an opportunity. By addressing pushback with a thoughtful, strategic approach, organizations can reaffirm their commitment to diversity, equity, and inclusion, positioning themselves as leaders in an increasingly complex and competitive business environment. Leaders who navigate these challenges effectively will not only preserve the gains made through DEI but also create more resilient and adaptable workplaces for the future.
Diversity, equity, and inclusion (DEI) are becoming increasingly important for businesses of all sizes. Many businesses are beginning to realize the importance of these initiatives and are making an effort to incorporate them into their strategies. But what exactly is DEI, and how can businesses leverage it for success? In this article, we’ll dive into the concept of DEI and discuss strategies for diversifying your business, engaging your employees, and leveraging your efforts for success.
What is Diversity, Equity and Inclusion?
DEI is an umbrella term that encompasses a variety of initiatives and strategies designed to promote diversity and inclusion in the workplace. These initiatives include measures such as creating a diverse and inclusive workforce, promoting equity in hiring and promotion practices, and creating a safe and inclusive environment for all employees. DEI is an ongoing process that requires ongoing commitment from both businesses and employees.
At its core, DEI is about creating an environment in which everyone feels welcome, respected, and valued. It is about ensuring that all employees have the same opportunities and access to resources regardless of their race, gender, sexual orientation, religion, or any other factor. It is also about creating an environment in which everyone can succeed and reach their full potential.
Here at Collective Vision Consulting, we call DEI, Access and Inclusion because our training focuses on the outcomes of infusing DEI principles in your business. The end-goal of environments in which everyone feels welcome, respected and valued is increased access to resources and opportunities in an ever expanding net of people.
The Business Case for Diversity & Inclusion
The business case for DEI is clear. In addition to creating a more positive and productive work environment, DEI initiatives can also help businesses increase their bottom line. Studies have shown that businesses that promote diversity and inclusion are more likely to attract and retain top talent, as well as increase customer loyalty.
Furthermore, businesses that embrace DEI are more likely to be perceived as forward-thinking and innovative. This can give businesses a competitive edge in the market and help them stand out from their competitors. Finally, businesses that take DEI seriously have shown to be more profitable, as they are better able to attract and retain top talent, as well as better able to attract and retain customers.
Strategies for Diversifying Your Business
There are a number of strategies that businesses can use to diversify their workforce and create an inclusive work environment. These include:
1. Developing a diverse and inclusive recruitment and hiring process. This includes implementing policies and procedures that ensure all qualified candidates have an equal chance of being hired, regardless of their race, gender, sexual orientation, or other factors.
2. Creating an inclusive workplace culture. This includes providing employees with resources and support such as mentoring and professional development opportunities, as well as ensuring that all employees feel respected and valued.
3. Promoting diversity in leadership. This includes making sure that all levels of leadership are diverse and inclusive and that all employees have an equal opportunity to reach the top.
4. Offering flexible work arrangements. This includes offering flexible hours, remote work options, and other accommodations to ensure that all employees have the same opportunities.
5. Investing in diversity and inclusion initiatives. This includes investing in initiatives such as diversity training, anti-discrimination policies, and DEI education.
Engaging Employees in Diversity & Inclusion Efforts
Creating an inclusive workplace is more than just implementing policies and procedures – it requires active engagement from all employees. To ensure that everyone is on board with DEI initiatives, businesses should create an environment that encourages open dialogue and feedback. This can include holding regular meetings to discuss DEI initiatives, providing employees with resources such as DEI training, and creating DEI committees or task forces to help employees get involved.
Businesses should also create a safe and supportive environment for employees to share their thoughts and opinions. This includes allowing employees to speak freely and without fear of retribution, as well as providing resources and support for employees who may be facing discrimination or harassment.
Leveraging Your Business’s Diversity & Inclusion Efforts
Once businesses have implemented their DEI initiatives, they should make sure to leverage their efforts for success. This includes actively promoting the company’s commitment to DEI, as well as showcasing the successes of their initiatives.
Businesses can also use their DEI initiatives to attract new talent and customers. This can include highlighting the company’s commitment to DEI in job postings, as well as promoting their efforts in customer-facing materials. Finally, businesses should make sure to actively measure and track the success of their initiatives in order to make sure that their efforts are having the desired effect.
Challenges of Implementing Diversity, Equity and Inclusion Initiatives
Implementing DEI initiatives is not without its challenges. Businesses must be aware of the potential for backlash and resistance from both employees and customers. Additionally, businesses must prioritize DEI initiatives in order for them to be successful. This means that businesses must be willing to make changes and invest both time and resources in order to create a more diverse and inclusive workplace.
Finally, businesses must be prepared to face the possibility of failure. DEI initiatives can be complex and require a great deal of time and effort to implement. As such, businesses must be prepared to make mistakes and learn from them in order to create a successful DEI program.
Conclusion
Diversity, equity, and inclusion are essential components of any successful business. By implementing DEI initiatives, businesses can create a more positive and productive work environment, attract and retain top talent, and increase their bottom line.
In order to do this, businesses must create a diverse and inclusive recruitment and hiring process, create an inclusive workplace culture, promote diversity in leadership, offer flexible work arrangements, and invest in DEI initiatives. Additionally, businesses must engage their employees in DEI initiatives and leverage their efforts for success.
Ultimately, DEI initiatives can be challenging to implement, but the rewards are worth it. By creating a diverse and inclusive workplace, businesses can reap the benefits of a more positive and productive work environment, increased customer loyalty, and increased profitability.
If you’re looking to learn more about how to leverage diversity, equity and inclusion in your business, sign up for our Liberated Business workshop!
