A lesson in financial health for women entrepreneurs

Photo: Travel Massive

Buzz4Eve, an initiative launched in June by Rhiza Babuyile, in partnership with Experian, promotes entrepreneurship amongst women of all ages in the townships of Diepsloot and Orange Farm, and Welkom.

As part of this partnership, Experian employees provided financial literacy and credit awareness training to groups of female entrepreneurs affiliated to Buzz4Eve. “One of the most common challenges noted amongst the women entrepreneurs is the lack of financial skills and knowledge to get their business off the ground or to the next stage of growth,” says Prabashnie Moodley, head of human resources at Experian South Africa. “Secondary to these is the need to exchange knowledge and support with other entrepreneurs to build-up their business.”

Moodley shares the following advice with women entrepreneurs:

Maintain a healthy credit reputation

There are many benefits for maintaining a healthy personal and business credit reputation. This provides opportunity to access finance as lenders need to understand the entrepreneur’s credit behaviour – and ability to repay debt – before they are able to grant loans. Entrepreneurs who maintain a good credit reputation have a better chance of getting approval as these reports provide a detailed perspective on the individual’s payment behaviour. Take advantage of the free service provided by all credit bureaux as prescribed by the National Credit Act, giving consumers the right to access their credit report once a year at no cost.

Postpone personal rewards and build an emergency fund


While it is important to see to personal expenses, it is equally important to see to the business’ monthly expenses and pay off financial obligations timeously. If it happens to be a tough month, business owners should communicate this with lenders as early as possible. At the same time, entrepreneurs are encouraged to build a savings fund for unexpected events. This reserve will go a long way to ensure employees and suppliers are paid during the tougher times.

Attract the right customers


The aim of any small business is growth, so attracting new customers is key. Yet the risk of taking on new customers that may fail to pay is a huge area of concern. Taking on the wrong kind of customers could have a negative effect and ultimately harm a business’s chances of survival. Entrepreneurs looking for new customers should not simply target every potential prospect without first understanding the impact those customers could have on their own business. Using a business credit report checking service, high-risk customers can be vetted and managed more cautiously.

“Access to finance remains one of the top challenges experienced by entrepreneurs. The ability to raise funds and attract the right type of customers to meet financial obligations - are fundamental to any business’ growth. We encourage entrepreneurs to be aware of what impacts negatively and positively on both their personal and business credit reports, and to make a habit of checking their credit profile regularly to ensure that it accurately reflects their circumstances”, ends Moodley.