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5 Tips for Women Entrepreneurs to Close the Savings Gap Women workers make 76 cents on the dollar compared to men. The gap continues when they start a business.

By Yumi Clark Edited by Dan Bova

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Ask nearly any small business owner and they'll tell you that managing cash flow is one of their biggest challenges. To smooth out inevitable bumps and plan for the future, establishing a regular habit of business savings is one of the most important things a small business owner can do.

A savings cushion can help you prepare for unexpected expenses or future growth, earn interest on your money, protect your funds and even save for taxes. Yet, less than half (42 percent) of all small businesses have a business savings account, according to Capital One's Small Business Growth Index -- with most opting to keep their cash in their checking account.

Setting aside funds that may not be used for months or years can be difficult. And, it tends to be even harder for female entrepreneurs who often start with smaller nest eggs. In fact, 45 percent of women small-business owners without a savings account that say they don't have enough cash to warrant one, compared to just 35 percent of their male counterparts.

While women are making significant strides as business leaders and entrepreneurs -- it's estimated that women will own nearly 40 percent of all U.S. businesses this year -- the highly documented gender wage gap has had an effect on the amount women save over time. Simply put, making 76 cents for every dollar that male colleagues earn in the same jobs means female entrepreneurs likely have less money when they launch their own business or have to wait a bit longer to make the leap.

Beyond the wage gap, gender biases and stereotypes can also impact women's ability to secure funding for business investments. For example, a recent Harvard Business School study that found 32 percent of women received funding interest versus 68 percent of men when pitching the exact same script. Additionally, Fundera found women entrepreneurs get offered smaller loans and pay significantly higher interest rates than their male counterparts.

All of these things can impact women business owners willingness and ability to save for the future of her business.

With that in mind, and in honor of October being National Women's Small Business Month, we've put together five tips that can help women small-business owners develop a saving habit that can help propel their business forward.

Related: 10 Pieces of Financial Advice I Wish I Knew in My 20s

1. Start saving from day one

When you're first starting your business, it can be difficult to save while setting aside cash to take care of regular, everyday expenses. Be disciplined about saving early on and you'll see that it gets easier as your business grows. Start small by setting aside even one or two percent of your earnings. As your savings start to grow, slowly increase that percentage.

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2. Auto deduct

Once you have incorporated saving into your budget, set up an automatic transfer from your business checking to savings account on a weekly, bi-weekly or monthly basis. Even small amounts add up over time and with automatic transfers you won't even notice the difference in your checking account.

Related: Time to Send Out 1099s: What to Know

3. Focus on what you're saving for

Whether it is saving to hire your next employee, open a second location in a new neighborhood, or buy that new piece of equipment, having a specific goal for a portion of your business savings will give you clarity and help you focus on the goal.

Related: 10 Financial Mistakes Rich People Never Make

4. Create the vision

While identifying what you're saving for is critical in the savings process, it's only the first step. Once you set your savings goal, create the vision. Literally having a picture of what you're saving for can be inspiring and help give you discipline. This could mean putting an image of your desired second location as a screen saver on your phone or computer, or drafting the job description for the person you hope to hire. You could also rename your savings account to map to that specific goal. And be specific. Don't just call it "second store," name it "second store on [street name] in [city name]." Specifying exactly what you're saving for and seeing reminders of it every day will help you more effectively reach the goal.

Related: 10 New Ideas for Making Money on the Side

5. Have a plan

Just as important as knowing what will make your business succeed is knowing how you can bounce back if a plan fails. That's a scenario in which a savings account can be helpful -- it's there as a safety net.

There's no doubt that small business saving is an extremely challenging thing to do. But, adhering to these guiding principles can help your small business start saving in no time.

Yumi Clark

Vice President of New Product Development

Yumi Clark is VP of New Product Development, managing a 50-person team committed to building new technologies and digital experiences that fuel America’s 28.8 million small businesses. She also serves as Capital One’s Bay area Site Leader and heads up the San Francisco Women’s Network.

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