In the dynamic and ever-evolving landscape of entrepreneurship, the spotlight often focuses on the trailblazing endeavors of women launching businesses. While considerable attention is rightfully given to ensuring equitable access to venture capital, a recent in-depth study conducted by BMO Financial Group reveals a persistent challenge faced by women entrepreneurs—a challenge that extends well beyond the initial funding phase. This challenge is none other than the nuanced realm of financial planning for sustained business success.
Financial Planning Challenges for Women-Owned Businesses:
Unveiling Disparities in Financial Preparedness
While the entrepreneurial journey is often celebrated during its initiation, the BMO for Women Survey brings to light significant disparities as businesses progress along their trajectory. A mere 36 percent of women business owners boast a detailed financial plan for their companies, falling behind the 41 percent reported by their male counterparts. This discrepancy extends to contingency planning, where only 64 percent of women have a plan in place, compared to a more substantial 76 percent among men. Furthermore, a scant 32 percent of women business owners possess a detailed transition plan, highlighting a stark contrast with the 50 percent reported by men.
Navigating the Complexities from Growth to Maintenance
Adding a layer of complexity, the survey underscores a noteworthy trend in post-transition phases from growth to maintenance. There is a significant decline in the percentage of women business owners continuing to work with financial advisors—47 percent compared to the 25 percent reported by their male counterparts.
The Importance of Financial Advisors:
Strategic Insights from BMO Wealth Management U.S.
Shannon Kennedy, Head of U.S. Advisory and Interim U.S. CEO of BMO Wealth Management U.S., underscores the pivotal role financial advisors play for all business owners, with particular emphasis on the unique challenges faced by women entrepreneurs. Kennedy asserts that neglecting the development of a robust financial plan is a critical mistake, irrespective of the business stage.
Integrating Business and Personal Wealth for Holistic Planning
To delve into practical considerations for women business owners, BMO spokespersons Carolynn Pfaff and Caroline Donlin offer insights. Pfaff emphasizes the importance of understanding how to strategically pull assets from the business to build personal wealth for the future. Donlin, on the other hand, stresses that working closely with financial advisors not only provides valuable insights into various financial options but also serves as an essential sounding board for informed decision-making.
Empowering Women through Dedicated Support Initiatives
Recognizing the need for a tailored approach, Pfaff highlights that BMO has established dedicated teams of women advisors, creating a supportive environment specifically designed for women business owners. The company’s initiatives, including BMO For Women and Women & Wealth, actively engage women across various lines of businesses through educational seminars, events, and support programs.
In a contemporary landscape where discussions about money are no longer considered taboo, the financial planning journey for women-owned businesses emerges as a critical aspect that demands meticulous attention. Bridging the financial planning gap requires acknowledging existing disparities, embracing the indispensable role of financial advisors, and integrating considerations of both personal and business wealth.