A growing number of minority owned-businesses are helping fuel the economy. Reports show that between 2002 and 2007, there was a 46 percent increase in non-minority-owned businesses compared to only a 10 percent increase in nonminority-owned businesses, according to the Minority Business Development Agency.
Many of these businesses are also female-owned. The Small Business Association (SBA), in a recent report, stated that female-owned businesses remain steady at 36 percent in 2012. Like all businesses, they have many challenges. However, small businesses, in particular, often face issues of accessing capital and surviving beyond the first five years. Approximately 50 percent of small businesses make it past five years, but only one-third survive beyond 10 years.
The SBA reports that, “Despite their growing economic significance, women- and minority-owned firms tend to be smaller and less profitable; and they carry lower survival rates than their male or non-minority counterparts.”
While that may sound very disappointing, understanding the complete financial picture and how to allocate funding for your business and your professional life is a vital step to help create success.
Today, 50 percent of women 65 years and older are single either by choice, divorced, or widowed. That likely means their finances are fully in their control. So whether it’s planning for the future of their business or their retirement, addressing these needs is a must.Watch Full Movie Online Streaming Online and Download
John Lohrenz, of JKL Wealth Management helps female clients with their businesses and their personal goals for retirement. He says the first step is to analyze your net worth.
“Sometimes business owners get so busy with the day-to-day workload that keeping an eye on their overall net worth is lost,” said Lohrenz.
But without a financial snapshot of where you currently are today, it’s impossible to craft a strategic plan. “You must understand what you own versus what you owe in order to determine short, intermediate, and long-term goals,” said Lohrenz.
Strategic investing for the future is a key factor in providing the financial freedom that everyone is seeking. But there are gender differences in how men and women pursue investing. These differences often also translate to how they operate their businesses.
One factor that affects women and their wealth is that women tend to be more emotionally attached to the outcomes. “They’re more risk adverse. They want to make sure that they accomplish their goals and that they don’t have a lot of risk and a lot of downside involved in it,” said Lohrenz.
Studies show that men tend to be overconfident in their investing decisions and often won’t seek another opinion. Part of the caution that women exhibit is derived from a fear that they won’t have enough funds in retirement; this can cause women to save but not invest.
The good news for women is that studies show that even though they invest less than men, they tend to see higher returns through more varied and less risky investments.
To protect your financial wealth, Lohrenz adds, “Do your research. Work with large reputable institutions. Always check where your statements are coming from and review your investments regularly.”
Editor’s Note: Securities offered through LPL Financial, member FINRA/SIPC
Video produced by Live Fit Films.