If you are a female entrepreneur, your journey is unique, and so are the factors that contribute to your financial well-being. In a landscape shaped by both personal experiences and societal norms, developing strategies for your financial success becomes essential in order to avoid financial burnout.
Being a female founder can come with inherent risks of entrepreneurship, leadership, and running a small business. This makes it vital for women to develop the necessary tools for resilience, emotion regulation and stress management to be able to flourish in entrepreneurship.
- How often have you charted your own success against the outstanding results of your role model?
- Have financial concerns been causing you to lose sleep?
- Is one of your goals as an entrepreneur to become financially independent?
While there can be trip hazards related to sustained financial well-being as a female entrepreneur, we can prepare for, and navigate around these to ensure our financial success.
Managing money…and our attitude to it
Money attitudes and money management play a pivotal role in your financial journey. Attitudes encompass your beliefs, values, and feelings about money, influencing your decisions and actions.
Management, on the other hand, involves the practical aspects of financial planning, saving, and spending. A healthy balance between positive money attitudes and effective money management leads to lower financial stress and greater financial satisfaction.
Money and gender – how men and women are different
Bearing in mind the science around this has not caught up to non-binary gender concepts or language, there are clear differences in how men and women approach money attitudinally, and less clarity around the differences between genders in money management practices.
Men tend to look at money as symbols of power and success. Women are more ambivalent and see money as both a source of anxiety and a means to ensure security. Both genders have similar approaches to savings and expenses, but men are more dominant in financial investments.
In a review of relevant research from 1972-2021, Giulia Sesini, Claudia Manzi, and Edoardo Lozza found “women appear less at ease with money and sometimes less effective in managing it”. Women are more likely to prefer more secure forms of savings (than investing), but also to engage in impulse spending (hence the ambivalence towards money). For women money is typically a means to an end, rather than an end in itself.
However, gender can play a role in your entrepreneurial success through more than just your attitude to money management. Gendered stereotypes about money can limit female founders’ access to funding.
Research exploring the impact of gender on entrepreneurial funding find it can be affected by “benevolent sexism”. Hostile sexism is the version more commonly referenced in society – this is the negative perception of women as being inherently inferior and incompetent compared to men.
Benevolent sexism is superficially more positive, but actually is equally limiting for female founders. It refers to the view that women are fragile and inferior and ought to be cherished. It is more entrenched because of its overtly positive tone and because it can be equally endorsed by both men and women.
One study found that found that “the more evaluators endorsed benevolent sexism, the more viable they perceived men-led startups, whereas evaluators’ benevolent sexism was unrelated to their perceptions of the viability of women-led startups” (Nguyen, Hideg, Engel, & Godart, 2023). This finding was regardless of the evaluators’ own gender and means that, while female-led start-ups were not more negatively evaluated, male led start-ups were likely to benefit from more positive evaluations, giving them an advantage in funding applications.
This highlights how important it is to the mortality of female founders’ businesses that they get ahead of the curve in managing the risk of financial burnout.
How does financial burnout happen and what can be done about it?
Getting money and keeping money require different skill sets.
According to Morgan Housel, getting money requires taking risks, being optimistic, and putting yourself out there; keeping it requires the opposite – frugality, and humility. Underlying it all is the ability to survive – “growth requires a sustained financial approach through the unpredictable ups and downs that are inevitable for all of us”.
- Do small businesses fail because founders didn’t try hard enough?
- Are all financial losses because the decision making wasn’t thought through?
Housel says sometimes, yes – but also, maybe not totally. He reminds us that “everything worth pursuing has less than 100% odds of succeeding” and notes that Warren Buffett – a world recognised investment leader – highlights that the majority of his wealth has derived from around 10 investments in a portfolio of 400-500!
Focusing only on someone else’s highlight reel risks overlooking that their success came from a small percentage of their actions.
Successful female founders are survivors, not unicorns.
They have learned ways of sustainable growth which have contributed to their capacity to thrive and flourish.
Tips to avoid financial burnout
- Know when is “enough”: Cultivate a sense of control over your life, which is a truer measure of wealth than external status. Avoid constantly raising the financial bar, as it can lead to burnout despite your hard work.
- Focus on patterns, not extremes: Understand your financial patterns, rather than fixating on isolated successes or failures. Consistency and the long game are key to sustainable growth.
- Education over frustration: Address money ambivalence through financial education. Gain confidence by acquiring financial knowledge and turning theory into practical skills. This empowers you to assess your financial situation and make informed decisions.
- Retail therapy is not a ‘Thing’: Resist impulsive spending and prioritise living below your means. Overcome the anxieties and fears associated with money by focusing on security and long-term well-being.
- Account for unique challenges: Acknowledge the impact of household and community factors, such as caring for family, the gender pay gap, and interrupted careers. Develop resilience, emotion regulation, and stress management skills to navigate these challenges effectively.
By implementing these strategies, female founders can navigate the challenges of entrepreneurship while maintaining their financial well-being. Remember that you are not alone on this journey; many successful female entrepreneurs have faced, and overcome, similar challenges. By cultivating resilience, financial literacy, and mindful money management, you can thrive as a female founder and create a lasting legacy in the entrepreneurial world.
Over 30 years I have worked with women in business who are struggling with, or looking to prevent, burnout. To find out more about working with me one-on-one click here. My Burnout Busters course also offers the tools and strategies you need to boost your resilience. Visit lifemadesimple.com.au/burnout-busters.