• Anelisa Mti, Advisory Partner at Citadel

Five financial tips for savvy female entrepreneurs

Casting off the security of a nine-to-five job to kick-start your own business can be both enormously challenging and rewarding, especially for aspiring female entrepreneurs making their way in traditionally male-dominated fields. It’s therefore encouraging to see more and more women taking the leap and pursuing their ambitions than ever before, says Citadel Advisory Partner Anelisa Mti.

Pointing to the 2016/17 Global Entrepreneurship Monitor (GEM) report, she notes for example that for every ten male entrepreneurs in South Africa, there were an estimated seven female entrepreneurs, demonstrating a gradual closing of the gender gap.

“Small and medium enterprises play an absolutely vital role in driving job creation and economic growth, so it’s really positive to see an increasing number of women seizing the opportunity to capitalise on their ideas and run their own companies.”

She adds however that many female business owners continue to cite difficulty in accessing funding or financial support as their primary barrier to success.

“It’s therefore absolutely critical to seek expert advice in putting together a comprehensive business plan that will attract investors, as well as advice in successfully managing your personal finances while your business becomes profitable.”

Mti also offers five practical financial planning tips for those women looking to stake out on their own:

1. Get your business strategy in place

A sound business strategy outlined through a detailed business plan is your best tool for drawing potential investors into supporting your business, says Mti.

This should include the key differentiators or selling points for your product, your target audience and marketing plans, extensive competitor research and a practical financial model outlining projected income and expenses.

Obtaining objective advice and input on your business strategy is key to ensuring that your business plans adequately address investors’ questions or concerns. You should also make sure to check in regularly with a financial professional to avoid making emotional or ill-advised decisions while you get your business off the ground.

2. Keep your personal and business expenses separate

“Make sure to keep paying yourself an income, but avoid counting your business profits as your income. This will help you to better differentiate and keep a record of your personal and business expenses, and also prevent you from placing unnecessary financial pressure on your business,” she observes.

Once your business is turning a profit, utilise the surplus to create a business emergency fund to protect against cash flow constraints or other unexpected events that may arise. This should cover at least three to six months operational expenses.

3.Keep investing towards your retirement

“You may need to put some of your own capital into your business at first, but avoid investing all your savings into your business – you may have a great idea, but many start-ups fail,” cautions Mti.

If you do not have enough equity to fund your business operations initially, you could look at taking out a business loan instead.

“Remember that you will also need to keep saving towards your other financial goals such as retirement, even once your business has taken off. Avoid looking at your business as your retirement plan, because if you are not able to eventually sell the business as you expect, you could land up with an underfunded retirement.”

4. Get creative in managing your cash flow

Managing cash flow can be one of the biggest challenges for small start-ups, but there are a number of ways that you can work around any liquidity constraints.

One of the simplest options is to apply for an overdraft facility on your business bank account, which would enable you to keep covering your expenses while you await payment. Be wary of spending too much on credit, however, and check that you understand the additional banking charges or fees that may apply.

“Other options could include offering a discount for early payments, or asking for a 50% deposit before beginning the work and the remainder to be paid on delivery.”

5. Invest in financial protection

“As a breadwinner, you need to ensure that you have sufficient insurance cover in place should anything happen to you, especially if you have a family or dependents. This will include disability, critical illness and life cover,” emphasises Mti.

“As a business owner, you will also need to consider short-term insurance on your home and vehicle, as well as business assurance such as key man assurance or business overheads cover to help cover business expenses should something happen to you or a key employee.”

“If you have a business partner, you should also discuss putting a buy and sell policy in place to ensure that you are able to buy each other’s share of the business out should something happen to either of you to prevent any future conflicts.”


A member of the Peregrine Group, Citadel Investment Services Proprietary Limited is licensed as a financial services provider in terms of the Financial Advisory and Intermediary Services Act, 2002.

Kindly note that this article does not constitute financial advice. All information and opinions provided are of a general nature and are not intended to address the circumstances of any individual.

Additional information:

Citadel is a specialist wealth manager with over 20 years’ experience in providing bespoke solutions for high net worth individuals. Through character-rich engagement and building strong relationships based on mutual respect and trust, Citadel enables its clients to explore the true potential of their hard-earned money. The best fiduciary, risk and asset management expertise is used to strategise, implement and manage a financial roadmap for its clients and their family. Visit www.citadel.co.za for more information. @Citadel SA

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