by Lolita Taub
Women and millennial business owners are not the status quo this election season.
It’s certainly been an interesting few months for the U.S. economy, and I’ve been keeping a close eye on how women and millennial business owners are reacting to events as they unfold. In December we experienced the first rate hike by the Federal Reserve after seven years, and the New Year saw the stock markets take a beating by the declining price of oil. On top of that, we’re in an election year.
I recently spoke with Candace Klein, Chief Strategy Officer at Dealstruck, an online small business lender, about what business owners think about the race as it relates to the economy. To that end, Dealstruck recently conducted a survey of small business owners to get a pulse on what they’re thinking. And I dove in to determine the female millennial perspective. What I got was gold!
Klein shared her top 4 financial tips for women and millennial-led small businesses. See them below.
1. Don’t be afraid to get help.
Since young business owners are applying for SBA financing in record numbers, Klein suggests doing everything you can to increase your chances of success. “When starting a business, it is tempting to cut corners to save money and unfortunately, many young business owners (and some not-so-young ones), think that skimping on accounting is an easy way to save a few bucks.” She warns, however, “The reality is, that decision will cost much more in the long run. In the case of an IRS audit or even when applying for small business financing, organized, accurate, and easy to find taxes and documentation are crucial. If these things are needed and a business owner isn’t prepared, it will take a great deal of time and money, often in the form of hiring tax professionals, to clean up the mess.” To that end, investing in a part-time bookkeeper or professional accounting software will help the millennial business owners start out on the right foot from the outset and avoid headaches down the road.
The Dealstruck survey results indicate that small businesses are generally feeling positive about their own growth and the economy, but are not applying for SBA financing (only 6% has ever applied), and 57% have concerns about their economic future. The Millennial small business owner respondents, however, have reported faring better (95% are stable or improving), are more likely to have applied for SBA financing (16%) and are less concerned about the economy in the near future (47%).
2. “Keep an eye on healthcare costs.”
Though young women business owners tend to have few concerns regarding the Affordable Care Act and its effect on their businesses, it will be important to not ignore the issue. Klein suggests, “As many millennials are young enough to have little experience with catastrophic illness or injury and are often still covered under their parents’ health care policies, this may seem like a problem for another day or at least another demographic. But healthcare costs are going to have an impact on your business as you grow and you will need to consider coverage for your employees.”
In the survey, small business owners reported in the survey that they are generally not affected by the Affordable Care Act (“ACA”) and are not opposed to its continuation. Fifty-three percent reported that the ACA will have no impact on their business, 18% reported a positive impact and 45% say it should be maintained in the future (16% have no opinion). Among millennials, more than a quarter feel that the ACA has had a positive impact on their businesses. And both women and millennials support continuing the ACA (51% and 53%, respectively).
3. “Hold on to your optimism.”
Klein suggests that “It may simply be that women and millennials are the newest entrants to the small business ownership landscape, and therefore have not had the time to build a bad taste in their mouths for government policy. Either way, this optimism is meaningful as we enter this election cycle.”
In the survey, women, and millennials reportedly not harmed by the current tax code. While taxes remain top of mind for small business owners this election, the growing population of millennials and women are not as heavily affected. While 47% of overall small business owners think the current tax code is too onerous, only 37% of women and 29% of Millennials are concerned.
4. “Keep on smiling.”
It’s never been a better time to be a young small business owner. There are many advantages to starting a business early in adulthood, including parental support, higher tolerance for risk, less personal responsibilities (like mortgages and families), and having a finger on the pulse of popular culture (i.e. demand). However, it is easy to lose that optimism as the years go on, especially when the weight of being the source of support for employees, increased requirements for insurance and taxes, and long hours dedicated to the business can take their toll.
It is vital for us as millennials to keep in touch with the passion that drove us to go into business for ourselves. Surround yourselves with supporters and advisors outside of the business who can be sounding boards and sources for support.
Keep smiling – after all, to paraphrase the immortal Louis Armstrong, when you smile, the world smiles with you.