The new government-backed initiatives give women-owned businesses (WOBs) an even greater level support in their endeavors toward winning lucrative government contracts. Contracting to provide goods and services to the government allows women to grow their businesses to new markets and to greater heights while creating bigger profits and jobs. Why is it important that women-owned businesses prosper? The answer: Because women-owned businesses are one of the fastest-growing segments of new business in our economy. To support their success is to help the economy thrive.

"Participation in federal contracting can be a lucrative revenue booster and a way for women entrepreneurs to create a high-growth business, explained Susan Sobbot, president of the American Express OPEN, which supports business owners with products and services to help them run and grow their businesses.

Recent Initiatives are a Boon to Women-Owned Businesses Competing for Government Contracts

Initiative #1

In February, 2011, the Small Business Association's Women-Owned Small Business (WOSB) Federal Contracting program enabled federal agencies to set aside contracts specifically for women-owned small businesses. This program originally placed a $4 million and a $6.5 million cap on awards to women-owned businesses. Early in 2013, however, these caps were removed. According to Barbara Kasoff, President of Women Impacting Public Policy (WIPP), "The removal of the caps is good news not just for women business owners, but also for government agencies aiming to boost their procurement to women-owned small businesses. She goes on to characterize 2013 as "the year for women contractors."

Initiative #2

In conjunction with the aforementioned changes to the WOSB Federal Contracting program, in April, 2013, American Express OPEN, WIPP and the SBA have joined forces to launch ChallengeHER, which is an initiative toward expanding government contracting opportunities for women-owned small businesses and increasing the success of WOSB program itself.

The ChallengeHER initiative will provide more extensive support in the form of:

1. free events and workshops across the nation
2. online curriculum and resources pertaining to government contracting topics
3. mentoring opportunities with women who are experienced at navigating the government contracting marketplace
4. access to government buyers and contractors

Supporting the development and prosperity of women-owned businesses represents a winning scenario for everyone concerned. Not only will women themselves be empowered to enter and succeed in a potentially lucrative business arena, but by creating a field with an increased number of bidders, and more diverse and better-qualified competition, the government will procure higher quality goods and services.

Whether you're a federal contractor or not, it's gratifying to know that it's a priority of the government to partner with those who are likewise dedicated to supporting the growth of this important demographic, whose success will resonate throughout the economy.

How will you take advantage of "The Year for Women Contractors?"

1. Who are Venture Capitalists?

   Venture capitalists are the risk-takers of the business investment world. They offer a means of financing when other, more traditional, options are unfeasible due to the nature of the business or the fact that earnings and profit aren’t yet bankable.

   Venture capital investment firms are comprised of experts in numerous areas of business, finance, and management, as well as specialty professions, to serve as advisors in fields in which the firm is interested in investing.

2. What is Venture Capital?

   Wikipedia explains that, whereas a traditional loan is repaid in full plus a predetermined rate of interest, venture capital is invested in exchange for an equity stake in the business, irrespective of the success or failure of a business. It states that, “As a shareholder, the venture capitalist's return is dependent on the growth and profitability of the business. This return is generally earned when the venture capitalist "exits" by selling its shareholdings when the business is sold to another owner.”

3. What can Venture Capital do for a business?

   While venture capital can be a shot in the arm for your company, once you accept it, you have a business partner who stands to make a hefty profit from their association with you. As such, they will dedicate resources to help ensure your success. Venture Capitalists are willing to act as your business’ “Godfather;” providing the operating cash you need to move forward - with the understanding that they will receive a hefty slice of your profit “pie” in return.

4. What businesses are Venture Capital firms looking for?

   Because Venture Capital firms embrace risk rather than avoid it, they seek out those unique opportunities to back companies that may not look traditionally profitable, and therefore may be considered too high-risk to receive conventional forms of financing. Wikipedia says that, “Venture capitalists are typically very selective in deciding what to invest in; looking for the extremely rare, yet sought after, qualities, such as innovative technology, potential for rapid growth, a well-developed business model, and an impressive management team. Of these qualities, funds are most interested in ventures with exceptionally high growth potential, as only such opportunities are likely capable of providing the financial returns and successful exit event within the required timeframe (typically 3–7 years) that venture capitalists expect.”

   While venture capital investors accept a higher level of risk, they’re still cautious businesspeople who will expect that your business is ripe for making the most of the opportunity presented. The ideal candidate for venture financing has an extremely well laid out business plan, solid management, its financial statements in order and invested, passionate founders. Because investing in your business is essentially a gamble for them, everything must be transparent in order for them to see what's in it for them.

   In his article, Targeting & Timing, published in the San Diego Business Journal, Mike Allen quotes David Titus, president of the San Diego Venture Group as saying, “To increase the odds of investing in successful companies that either go public or are acquired for fat multiples on the stake, venture firms try to limit the risk by considering later stage and more mature companies. But that doesn’t mean younger companies can’t find new capital. Early stage companies are getting it, but it’s difficult. You have to have a very solid business plan, a good management team and good execution.”

5. Where do businesses and venture capitalists meet?

   According to Wikipedia, private companies meet venture capital firms and other private equity investors in several ways, including warm referrals from the investors' trusted sources and other business contacts; investor conferences and symposia; summits where companies pitch directly to investor groups in face-to-face meetings; and private online networks which provide additional opportunities to meet investors.

The fact is, many a business would never have gotten off the ground without the backing of a forward-thinking venture capital firm behind them. They represent a rare and exciting opportunity for the right company. When Venture Capitalists come knocking, will your business be ready - and/or willing - to accept the challenges and benefits of this creative financing opportunity?

How could the backing of a venture capital firm take your business to the next level?

Kelly Springs-Kelley, is the Manager of Corporate Solutions and Communications for EventPro Strategies (EPS), an event staffing agency that partners with marketing agencies and fortune 500 brands to staff and execute experiential marketing events throughout the US and Canada.

Kelley compiled some best practices on small business money management, budgeting and forecasting knowledge from her colleagues at EventPro, CFO, John Anderson, and Founder and CEO, Jessica Browder-Stackpoole. Kelley says, "Having been in business for over thirteen years, our company has seen, and overcome, many challenges. Our executive team has some great insight that can help any small business owner stay ahead of the curve and navigate their financial challenges effectively.

John Anderson, Chief Financial Officer, offers the following wisdom:

• First and foremost, understand that cash is king. Collect your cash (receivables) before you spend it.
• Accuracy and timeliness are critical in terms of the information you are utilizing. Don't assume your costs are XY and Z. Employ a professional to create an accurate financial picture of your business (financial statements).
• Make sure all of your pricing tools are accurate, from sales to accounting. If your sales team uses an excel spreadsheet for building an RFP, develop checks and balances to ensure the formulas and other sales information are accurate. A small error can make a huge difference in mispricing an RFP, which in turn can cost you financially, or even prevent you from landing the sale in the first place.
• Build a bottom-up forecast, forecasting sales and expenses as far out as feasible. Some businesses can forecast a year in advance, some only a month. Start with what sales you know you are going to have, and then layer in what you believe will happen, discounting those items as their probabilities decline. Build cost models that meet your sales levels, along with best and worst case scenarios for your forecasts and budgets. When allocating finances, use the worst-case scenario.
• Create a Pareto analysis that lists your opportunities for reducing costs in the order in which you will execute those reductions. This list can be done for personnel, services, materials, and other variable costs.

Anderson sums up his financial mindset by saying, "By understanding your costs and developing contingency plans for your best and worst case revenue scenarios you will be well prepared to navigate the ups and downs of your business."

Jessica Browder-Stackpoole, Founder and CEO offers the following advice:

• Adjusting weekly, as opposed to monthly or quarterly, will help you be better poised to meeting your financial goals without any surprises. Making changes within your organization based on financials that are 30+ days closed is like trying to drive by looking through the rear-view mirror. Every single week, you should:
• Update your monthly projections, three months out, based on what you learn each week.
• Review your forecasts and finances against your financial goals, then make small adjustments to your strategic plan and expenses based on this information. Always be conservative so there aren't any surprises other than positive ones.
• Close out the books each week within 1-2 business days, and then close out the month within 3-5 business days of end of month. Getting accurate financials timely and on a weekly basis is the key to success.
• Three points that indicate whether your finances are under control and that your planning is effective:
  • You know before and during the month if you are going to be profitable.
  • If you are NOT profitable that month, it is a conscious and strategic decision to take a loss or to make an investment.
  • If you thought you were going to make money in a month, and you did not, your process needs to be re-tooled.
• Pre-approve and track all expenses and credit card transactions (we do this through an online database). When people know their expenses are being examined, it's amazing how much less people spend.
• Overall, companies can't be blinded by success. Stay disciplined and always work to raise the bar. Even when things are running smoothly, peel back the layers of the onion and look through each line item for trends.
• Set a goal, and once it's achieved, set an even higher goal. Never be satisfied!

Money management, budgeting and forecasting are critical ways of keeping a handle on the financial health of your company. Take the advice of these seasoned professionals to stay on top of finances so you can survive the struggles it may experience as it grows and take full advantage of the opportunities it will encounter.

What are your best practices for money management, budgeting and financial forecasting?