Money, money, money…it’s a rich man’s world - and to be quite honest, we wish it wasn’t. And hopefully, it won’t always be.

It’s time to talk about money. Here’s why: we’re all about lowering barriers for women in entrepreneurship. And one of the biggest barriers?

Money.

At a recent workshop with our current Startup School cohort, we discussed barriers to success and things holding us back as female entrepreneurs. Unsurprisingly, money came up for almost every single person.

That’s why it’s time to talk about it. Despite it being uncomfortable, socially taboo, and a subject we tend to shy away from, financial literacy is a vital part of empowering women and enabling them to make bold choices about their careers and futures.

The undeniable truth is that becoming a founder will always feel like a financially risky step. It does involve more financial uncertainty than most regular jobs. And financial uncertainty is always difficult to manage.

But the good news is, the situation isn’t nearly as dire as most of us think.

It makes sense that we see finances as a barrier to entrepreneurship, especially as women

To begin with, women are in a more financially insecure place than men, with the gender pay gap in the Nordics ranging from 11.2 -13.9%, despite recent improvements. Since we’re already starting from a point of financial inequality, any potential risk is going to seem far more dangerous than if we were coming from a place of equal pay.

It’s also worth noting that the media dialogue around startups and founders is one of extremes: we read news headlines that mention millions or even billions in funding, and contrast these with ones that talk of bankruptcies and layoffs. There’s no inbetween conveyed, despite the fact that the vast majority of founders sit in the inbetween.

If you’re someone who sees finances as a significant barrier to starting your own business, then we’ve put together the following points, which will hopefully be helpful!

We’re not claiming that money isn’t a risk or you’ll always be financially comfortable in entrepreneurship, but we do hope that you will start to see how challenging assumptions and being informed can significantly lower the money barrier.

Here’s what every early or aspiring female founder should know:

1. You don’t need to quit your day job to be a founder

Early stage founders are better off keeping their day job. That’s right - we actually wouldn’t recommend quitting and focusing fully on your own business until you’re further down the line.

There’s a couple of reasons for this: it allows you to work on your business on the side and test whether it’s something you want to pursue or something you grow tired of, it staves off the lack of motivation that comes with working alone all day every day, and it places you in a position where you can take your product to market much quicker later on.

And then of course, it means you keep a regular salary and income, which helps alleviate financial anxiety and uncertainty.

If the thought of both working and building a startup seems a little overwhelming, it’s important to remember that a lot of the early stage ideation work of a startup doesn’t fill working hours, for example, waiting for feedback, meetings, setting up experiments and so on. It’s just not enough to fill your day. When you start to feel traction, market interest, and as though you don’t have enough time to keep up with the tasks, that’s when it’s a good idea to think seriously about going down in time at your current company or quitting altogether.

2. It doesn’t cost a lot of money to found a company

If we start from the very first steps and consider the necessities of a business, you can build a landing page and set up an email address for free. That’s really all you need to begin.

Even when you get a little further on and have costs such as ads, admin, and accounting - these aren’t millions. Yes, they’re costs. But they’re costs that can be planned and saved for.

By the stage you’re reaching these costs, you will probably have a better idea of the profitability of your product and a plan for taking it to market quickly.

3. Most initial costs can be planned in advance

Don’t worry, we weren’t going to say you could plan for costs and not give any further information! It’s important to know what your costs will be before you start, to make sure you have peace of mind and are prepared for what will happen.

It’s a worthwhile exercise to write down what you’re going to spend money on for operational costs, and work towards saving that amount while you’re still in the early stages of ideation.

If you know the numbers before you’ve even started, you can be confident that you have enough money to cover the immediate business needs when you begin.

4. It’s better to concentrate on founding, not funding

Often, the founding conversation revolves largely around funding. And while funding has its place, we actually don’t think it’s smart for early stage founders to look for funding.

The crucial step at the beginning of any business is to find out what customer or market need is, what works to solve it, and how to effectively monetise this. If you do this, then by the time you’re ready to start fundraising, you have the proof of traction which is vital for your next steps.

Your future chances of funding will be better if you’ve spent time at the beginning focusing on building your business rather than searching for investors.

5. Think less about traditional investors

And by the time you get to fundraising, there are a lot more choices than you expect! Investors aren’t the only option, or indeed the best option - they typically see over a thousand startups a year and only invest in a handful.

Angel investors, family offices, or foundations, on the other hand, provide seed money for early-stage founders where they look at smaller returns, and focus on ideas and impacts they believe in. It’s often a better call to consider which of these options line up with your business and may be interested in supporting you at an early stage.

6. If you’re able, consider friends and family (but do so carefully!

You may be in a place where those around you are willing to offer you support, which can be another way of getting some initial funds.

If you’re going to go down this route, it’s worth ensuring that you know the rules around money from family members - for example, some countries allow a tax free amount as a gift from parents.

On the flip side, it’s also important to make sure your loved ones know what they’re getting themselves into. It can be a good idea to make contracts for the capital they offer, so that they know there is risk attached to the money - and to avoid any tricky situations or awkward family dinners down the line!

7. Have a list of easy back-up jobs on hand

We’re not trying to suggest that you need them (and we really hope you don’t!) but this step is more for your peace of mind.

If you reach a stage where you’re ready to work full-time on your business, then you will probably have to accept that you may not get a salary for some time. This is never going to feel completely comfortable, but there are still things you can do to minimise the anxiety around it.

One good way to handle this unease is to have a list of back-up jobs, which are jobs you know that you could easily get if times are desperate, for example bar-tending or temp work. It’s better if they are jobs you have worked before and know are readily available.

While we would hope you don’t have to rely on them, knowing that you have somewhere to turn if the situation doesn’t work out provides a safety net you can fall back on and helps ease a few of your anxieties!

8. Knowing your numbers is invaluable

Financial literacy is important in all aspects of life, but perhaps never more than when embarking on your own business. While it can feel scary to look at the numbers and consider them, it’s vital that you’re on top of what’s happening rather than hiding from it, especially as you continue down the line.

When you start to spend more time on your business, maybe even part-time or full time, you need to clearly know the exact numbers you need and how long you can survive for in different scenarios. It doesn’t matter what these numbers are - no one else needs to know them, but it will help you understand where your business is at and act accordingly.

Again, while we hope it isn’t necessary, if things start to go badly, you will be aware of the point at which you need to stop before you get yourself into an impossible situation. It also helps to be able to track and understand where you’re going, and pivot directions if needed.

9. Plan for some extra income

Once again, we’re aware that this isn’t possible for everyone! That’s why this point comes so far down on the list, because we realise it’s not always an option.

If you are in a place to achieve this, it can be really helpful to plan for some extra income. This will look like different things for everyone, whether it’s renting out your apartment, picking up some extra paid hours of work, or just getting really creative with your budget and working out which expenses you can save on.

Not everyone is in the same position here, but it’s worth considering if there’s any way you can eke out some extra income to help make the founding journey seem less difficult.

10. Remember to focus on the long-term

Founding journeys are a marathon, rather than a sprint - which makes patience an important part of the game!

If you’ve taken all the above into consideration and are still concerned about financing your start-up, it might be worth considering a long-term view. Don’t shy away from the fact that it may well be less financially comfortable for a while. In all likelihood, this will only be for a certain amount of time, depending on which route you choose and how fast you bring the product to market.

It’s not years of your life or a certain lack of money for years. It’s something to plan for, understand, and try. If it doesn’t work, it’s a year or two where you were a little less comfortable. That’s all.

So there we have it!

Finances will always look like a barrier to founding, but hopefully you can now see that the perceived size of the barrier is often bigger than the barrier itself. With some careful knowledge, planning, and awareness, the size of the barrier really can be significantly reduced. It doesn’t need to hold you back.

If you’re an early-stage or aspiring female founder, then you may be interested in our free startup school, where financial literacy for early-stage founders is a topic we cover. Learn more at https://www.evenfounders.com/ or get in touch with us via hello@evenfounders.com.