Lucy Sorrentini said she founded her business with the same money mindset she used to handle her finances at home.
That, she said, was a mistake.
“I felt I was responsible with money, but also equally impulsive because I worked hard and felt as if I deserved it,” Sorrentini, founder and CEO of Impact Consulting in New York City, said. “But, if I wanted to grow my business, I needed to be more mindful.
“So, every financial decision from then on was focused not only on if I could afford it that day, but also the future impact of that dollar.”
Several financially focused panelists, including Sorrentini, were on site at Rutgers University’s first annual Women Do Business Differently conference Friday to talk about money for the advancement of women entrepreneurs.
Mary Baker, founder and owner of Baker Tax and Accounting in Linden, said entrepreneurs need to know and prepare their numbers before going into business.
“If you are considering a business and especially one that requires any type of financing, you need to know and understand both your personal budget and your business budget,” Baker said. “For example, if you manufacture a product, how much does it cost to produce and what are your profit margins? If you provide a service, how much do you need to charge per hour to cover both your personal and business expenses?”
Lynn Karam, founder of LEK Management and an executive management consultant with the Minority Business Development Center in New York City, said entrepreneurs then need to start carefully tracking their financials in order to target long-term monetary goals.
“If you think of running a business like going to school, your financial statements are report cards that show you how you are currently doing,” Karam said. “You need to sit down with someone and take care of your financials each month — not just during tax time.”
If applying for funding, Karam added, it also is important not to get upset if it does not initially work.
“A lot of times, women business owners take everything personally,” she said. “But if and when you get rejected from a bank, instead of getting upset, let’s find out why and what we need to do to fix it.”
Jasmine Cordero, managing director at Rutgers University’s Center for Urban Entrepreneurship and Economic Development in Newark, said women seemingly are at a disadvantage being that men were traditionally responsible for household finances.
“But we cannot be afraid,” she said. “You really need to work to understand your financial statements so that you can then make better business decisions. You want to know everything from insurances to retirement funds, and there are tons of courses out there to help you learn about and therefore manage both your business and personal financial lives.”
Kevin Chu, loan program manager with Greater Newark Enterprises Corp., said that, before starting or expanding a business, the conversation again needs to begin at home.
“You need to be having ongoing conversations with your spouse,” Chu said. “In my discussions with clients, we focus on the three C’s — credit, capacity to repay and collateral — and when it comes to collateral, and I talk about using the home with men, there often is no pushback and they are able to make a decision on the spot.
“But, often times, women will say that they need to talk to their husbands first before making that sort of decision — and then, often times, there is pushback.”