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Knowing what you're worth - tips for real business success
19 November 2018
The Small to Medium Enterprise or ‘SME’ sector in Australia is a significant player in the economy. The Australian Bureau of Statistics shows more than 2.2 million small businesses operating in Australia. Back in 2012, Ruby undertook research into women owned businesses, questioning them to find out what they found challenging when starting up a business. Almost half of the women said ‘dealing with certain areas of business they had no previous exposure to’ was top of the list of things they found most challenging when starting up their business.
For those women business owners earning over $200,000 – which may indicate more established businesses – the research also found ‘managing staff and delegating to staff’ was a challenge.
The other top challenges faced by both those in the early or start-up phase and earning more than $200,000 were ‘securing business’ and ‘controlling the hours they worked’.
One of the interesting findings in the research was that only 10 percent of business owners indicated that ‘obtaining/securing finance’ as being the hardest part of starting out.
Fast forward to today, and the challenges haven’t been enough to stop women starting businesses. One third of small businesses are now run by women compared to one fifth a decade ago.
There are findings showing small business owners often leverage their home as their key asset and this ongoing strategy may explain why ‘obtaining and securing finance’ wasn’t seen as a major challenge in the 2012 research. However, for younger business operators starting out now that avenue may not be option.
Ruby spoke with Sheree Rubinstein - the founder and CEO of Melbourne’s One Roof - about what the women-led businesses with which she comes into contact say drives them to start out.
One Roof (pictured above) is a co-working space for women-led businesses.
“Most of the women I speak with have begun their businesses for flexibility and because they believe in their product or service. They are there for the passion, the purpose,” says Sheree.
Another major driver for many women who start a business is they want to do things differently. “Often,” she says, “the women I see have been in the workforce, identified a gap or need for a new way of doing things and decided they’re going to design that new way. That maybe a new way of working or involve a new, more flexible way of working, provide a non-existent or better performing service or product. I have witnessed this across industries, not just in the service industry.”
We wanted to know what are the most common questions from new and even established customers of One Roof?
They want to know who to talk to and who to go to for advice,according to Sheree.
“These questions and the needs of business-owners change as they grow, but at One Roof,” she says, “we try to solve the issues by providing the space to network and talk with other business leaders and with the advisors and experts we have at One Roof.”.
Backing Sheree’s comments and bolstering the view that a key need of women business owners is still ‘help to face areas of inexperience’ has been the success of Westpac’s efforts to link SMEs to organisations that help them overcome key challenges. For example: HR organisations that can help with employee on-boarding and issues like payroll and rosters. Another area SMEs seek help in is in debt collection and customer payment reminders which then flows through to improving cash flow.
Better more integrated payment solutions for businesses are also very popular with SMEs and micro SMEs. Financial technology companies, including banks, are working on innovations in these areas continuously.
According to the Westpac SME team there are three basic descriptors into which women business owners tend to fall: Lifestyle Seekers, Profit with Purpose and Corporate Sector Switchers.
Here’s how they describe a Lifestyle Seeker:
Usually micro SMEs taking advantage of technology and social media to run a business from home; they rarely have employees.
Someone who wants to run their business on their terms; often growth isn’t important - maintaining the business to sustain their lifestyle needs is important.
Someone seeking a non-traditional career and not interested in entering jobs in the public or private sector.
Typically, an early adopter.
Many have their shopfronts or promote their services on places like Instagram.
Getting younger – such as university students running a store from Instagram.
A Profit with Purpose business owner is
Women wanting to open businesses that have a clear purpose to address social issues like helping refugees with employment pathways – clearly a social enterprise.
There’s also a rise that aren’t social enterprises, but are still focused on overcoming a social need – like creating and offering employment to women who can work during school hours, for example.
Corporate Sector Switchers are
Typically, women leaving the corporate world in favour of more flexibility and better work life balance to start their own small business.
Change in priorities like starting a family, or disenchantment with their current job/organisation.
Increasing childcare costs
Technology makes it easier to work from home
Desire to do something they are passionate about. For example: start a yoga school, create their own design business, become a florist, etc.
Those who have left corporate sector may be highly sophisticated – business acumen, but still need support with getting the business up and running.
They would like to be able to do more with their networks and connections.
No matter which of these descriptions fit you, it is important to understand your worth. Knowing your base income is one place to start. Knowing what you’ll accept an hour will put you in control of the hours you work, and help you define what you should be doing and what would be best left to others. Many business women still find, as Ruby’s 2012 research showed, they are ‘doing everything’ and often that can come down to not knowing your worth and being able to say ‘no’ – business owners need to understand that certain work would be better outsourced to experts. Once you have a financial benchmark, it becomes possible to delegate or say no to the things you are asked to do that just don’t add up for you financially.
For example: if your time is worth $50 an hour it’s easy to argue that outsourcing tasks that are taking you away from what you do best for say, $25 an hour, makes financial sense. This could be anything from the housework to the bookwork.
Ruby is holding a webinar with Catherine Heilemann, the Salary Coach, on this very topic: “What is my time worth,” on 5 December, 2018 at 1pm. Tune in and get your questions answered. Whether you are a business owner or looking to climb the work/corporate ladder, understanding what your time is worth is a great place to begin benchmarking. Knowing your $$ worth will help you make more informed decisions about where it’s best to spend your time and for how long.