Why Financial Literacy is Absolutely Essential for Growing Your Business

Women in business: I want to help you learn about money. 

Scotiabank conducted a survey of 1,000 small to medium-sized businesses and enterprises from across Canada. Women business owners are 56 percent more likely to be ranked as ‘below average’ in financial knowledge than their male counterparts. 

This is the reason I’m writing this and built the Money to Grow course.

Underserved entrepreneurs need financial literacy education on their terms to close the gender gap.

I’m not advocating for business financial literacy just because I’m a Chartered Professional Accountant.

I’ve seen how financial literacy can be the difference between a business advancing and losing momentum. It’s that powerful.

It’s easy for me to get fired up about finances, and I want to share that energy with you. 

I’m going to define financial literacy, explain why it’s worth learning about, talk about the current barriers to learning and tell you how to climb over them.

What is financial literacy?

Financial literacy is a combination of education and self-confidence. Together, these two aspects allow for sound decision-making.

Here are some business matters that financial literacy skills help with:

  • Understanding accounting concepts
  • Reading financial reports
  • Understanding profit and loss statements and cash flow
  • Managing balances between creditors and debtors
  • Monitoring earnings on a long-term basis
  • Understanding financial risk
  • Cutting down expenses
  • Avoiding errors during financial presentations to investors
  • Customizing reports to capture the correct information

Allianz Life Insurance found in their 2019 Women, Money, and Power Study that “despite rising influence, women report a steady decline in financial confidence.” 

Education and confidence are half the battle, and the other half are the policies that financially disempower women-identified and non-binary entrepreneurs. 

‘Access To Capital’ is at the top of CanWCC’s advocacy agenda, and it will stay there until we see the recommendations we’ve outlined implemented by the government, lending institutions, and funding agencies. This lack of confidence when it comes to financial literacy isn’t due to personal shortcomings — it’s the result of running a business while navigating systemic oppression.

I’ve seen how bias impacts individuals, and it’s why CanWCC advocates for you and offers resources (like CanWCC’s financial literacy 101 course) that teach this invaluable set of skills in a way that speaks to your needs. I want your business to flourish, and without financial literacy, it’s much harder for that to happen.

Why learning financial literacy is so valuable.

Financially literate people are more likely to get access to external funding and to develop their businesses. 

CanWCC advocates for improving accessibility to financial capital because male entrepreneurs are 20% more likely to be approved for financing. The gender disparity in financial literacy contributes to this gap.

Knowledge is power, and women need the power they deserve when it comes to money.

Even if your finances are in the hands of a professional, understanding the insights they are passing along can be the difference between sound decisions and guesswork. If you are the only person overlooking your finances as you grow your business, then it’s even more critical.

Do you feel confident making money decisions for your business?

If not, I want to help you reclaim your power. You shouldn’t have to carry the weight of a system that has failed to support you on your shoulders. 

It’s not your fault the system isn’t equitable.

Unfortunately, the way most entrepreneurs receive an education in money is through interactions with financial service providers. 

Financial literacy education doesn’t have women in mind.

What if you can’t afford to hire an accountant to look after your finances?

You won’t have access to the knowledge that will set you up to get capital. Without the experience, it’s harder to get the funding. The cycle goes around and keeps women-identifying and non-binary business people down. 

Getting your financial literacy from hired help creates a chicken-egg situation for those that need the education the most. This route to learning about business finances also doesn’t guarantee you’ll learn anything from those interactions. 

Financial education needs to respect you, your knowledge, and your needs. Financial programs, resources and advisors often fail at this.

The 2019 Women, Money, and Power Study found the following: 

“Only a quarter of women in the study say they currently have a financial professional, which is down from 30% in the 2016 study. Of those that are working with one, over half (60%) say that their financial professional treats their spouse/partner as the decision-maker, which may cause women to feel less independent (81% in 2019 versus 87% in 2016) or confident (83% in 2019 versus 91% in 2016) as a result of working with a financial professional.”

Business owners need tools and self-confidence to make financial decisions, not a lecture with a bunch of jargon. 

For business financial literacy education to be effective, it needs to be empowering and timely.

Women-identified and non-binary business owners need education on business financial literacy while they are still getting started. The hardest time to acquire capital is when it’s needed most.

Screw the chicken and the egg — I demand an equitable approach for distributing capital and learning about money.

Climbing over barriers and landing with confidence.

I want you to succeed, and I know the best way to grow your profits is to learn about them.

I launched Money to Grow in February, and the first round filled up fast. The course offers women-identified and non-binary business owners, CEOs, and founders all the tools they need to run a profitable business without panic. I’m watching 50 people grow into even more capable entrepreneurs, and if that’s not empowering, I don’t know what is.

This conversation isn’t over until the gender barriers to financial literacy and venture funding are gone. In the meantime, I wanted to do something that would give you the confidence and skills to climb over the existing barriers and land softly on the other side. 

You deserve to hit the ground running.

Money To Grow will be running another round in the future; follow CanWCC on LinkedIn for future announcements and advocacy updates.

About CanWCC

The Canadian Women’s Chamber of Commerce advocates for policy change for women-identified and non-binary entrepreneurs. Our goal is to reduce barriers to your success so you can grow, scale and thrive in business.

CanWCC is a nationally incorporated not-for-profit membership organization.

Become a member at https://CanWCC.ca/membership.