Monday, July 26, 2021

More And More Women Are Starting Businesses. Why Is That So Surprising?

Written by:Liz Elting

circa 1936: Seamstresses working on a dress to be worn by Greta Garbo in the MGM film 'Camille'. ... [+] GETTY IMAGES

It’s no secret that the pandemic’s economic toll has fallen disproportionately and overwhelmingly on women, millions of whom have left the job market over the last year and a half. That brings our level of participation in the workforce to its lowest in decades, and as yet, it’s not clear if women will return, or even be able to; historically, women are more likely to be hired when the hiring manager is a woman, and the exodus from the workforce includes managerial workers, too. Fewer women in the position to hire simply means fewer women getting hired.

Since the beginning of this pandemic, and even going further back, this author’s position has been that women’s financial futures depend on entrepreneurship, rather than the selling of our labor, eliminating one of the biggest barriers to our full participation in the economy. And more and more women are reaching the same conclusion; between 2007 and 2019, even before the pandemic, women started businesses at five times the national average, and women-owned businesses generated $1.6 trillion in revenue each year. And since March of 2020—you know, when the world shut down—women have started more businesses than men, and are more likely to go it alone rather than buying a stake in an existing enterprise. And while women looking to hang their shingle have to face steeper climbs to profitability and survival, especially insufficient funding, our businesses tend to outperform the national average.

None of this should be surprising. The modern workplace was developed in the initial burst of economic growth after the Second World War and was consequently designed with particular kinds of workers in mind: single men, married men with wives to take care of their homes and children, and young, single women to work in the secretarial pool. The whole (pre-pandemic) culture of business was built on that assumption. It’s why so many business discussions are held over drinks long after five o’clock, or why so many businesses equate “promotable” with “stays late at the office.” Those are conditions which women, on a structural level, are simply less likely to be able to meet while also performing their expected home and childcare duties on the infamous “second shift.” In short, the culture of professional work is not designed for women to succeed, and those same assumptions about where women belong helped fuel our mass push out of the workforce.

With all of that nonsense out there, it’s not surprising that more and more women, and especially women of color, have turned to entrepreneurship to build not only their careers and maybe even fortunes, but to simply create the conditions in which they and their families can thrive. The usual term is “work-life balance,” but perhaps it would be better to think of the goal as space for success. That means flexibility. It means working on your own terms. And, critically, it means controlling your own life rather than bending it to fit into a shape devised decades ago for people living under very different circumstances.

It may surprise you to learn that women’s isolation from the economy is a relatively recent development. If you go back to the very beginnings of the United States, or what historians call “the Early Republic,” you find the household as the basic unit of economic activity. Most families operated subsistence farms, with extra produce being used for bartering with neighbors for the things they couldn’t produce themselves or taking to market to sell for currency, or scrip. Women were the ones who spent their days weaving or sewing or quilting or making pins, turning raw materials into finished, marketable goods.
When industrialization came, it came in the form of textile production. Soon, companies were contracting women, as independent entrepreneurs, to turn mass-produced textiles into marketable clothing. It wasn’t until mass industrialization in the latter half of the 19th century and all its attendant dangers that women began to recede from the formal workforce, and even then, it was only those wealthy enough to do so, and the vast majority of women appear to have continued to engage in economically productive work. Our disappearance from the scene really only came after the Second World War, and lasted for only a single generation.

In short, women have always found ways to exist in the economy, and our spirit of entrepreneurialism is hardcoded in our history. Whether as spinners or weavers, seamstresses or pin makers, women working out of the home and generating real household income has been the historical norm. Because it is there, and seemingly only there, we get to thrive on our own terms.

Raise a glass, gals, to your grandmothers and great-grandmothers and great-great-grandmothers, your spinster aunts and their street-hawker cousins. In their own way, every one of them was a titan of industry. My hope, and belief, is that by following in their footsteps, we can push ever closer to real equality and liberation through our hard-fought economic independence.

Monday, July 19, 2021

Let’s close the huge gender gap in federal contracts


Women-owned enterprises account for about 38% of all small businesses, but win only 5% of federal contracts. “Let’s have our goals for women-owned businesses participating in the federal procurement process reflect the reality of our times,” writes Jessica Johnson-Cope.

As a woman who owns a small business, I’m proud to be part of one of the fastest growing segments of our nation’s small-business community.

Women-owned enterprises, like my family’s security company headquartered in the Bronx for nearly 60 years, now account for 38% of all small businesses in the U.S. today, according to data from the U.S. Small Business Administration—up from just 5% in the 1970s.

But even as our strength and influence continue to grow, women small-business owners are finding ourselves increasingly shut out of the $600-billion-a-year federal contracting process. We also know that even when we compete for this important work, our male small-business counterparts are far more likely to land big federal contracts.

As we strive toward parity, and with a potential trillion-dollar–plus national infrastructure package just around the corner, it is imperative that our champions in the Biden-Harris administration and beyond tackle the persistent barriers women business owners face in winning federal contracts. That means problems ranging from the high costs associated with preparing a bid and the lack of transparency in the process, to the persistent gender gap and the reality that doors are simply closed to many first-time bidders.

Back in the late 1980s, when women-owned businesses were much more of a rarity, they were securing just 1% of federal procurement dollars. While our numbers have grown exponentially since, that contract win percentage has remained stubbornly, embarrassingly low—hitting a “high” of 5.19% in 2019, according to the SBA.

The glaring lack of real, sustainable progress is even more disheartening when considering this context: More than 25 years ago, the SBA began a program designed to ensure that women-owned businesses had access to the federal procurement process, with the aim of helping them secure a minimum 5% of contracts. That modest, and now extraordinarily inadequate, goal has been met just twice in close to three decades.

And today, according to survey data collected by Goldman Sachs 10,000 Small Businesses Voices, a program whose National Leadership Council I chair, women small-business owners are 15% less likely than men to be awarded federal contracts. It’s worth noting that there is no gender gap at the state level, where women business owners are as likely as our male counterparts to win contracts awarded by state governments.

While the state of play remains grim, I’m heartened that the Biden-Harris administration has pledged to address historical barriers. I look forward to changes to the Women-Owned Small Business Federal Contracting Program. Among other things, we must streamline the certification process and end “double-dipping” (when the dollar value of contracts awarded is often counted against more than one set-aside program).

My company has been fortunate to work in the public transportation sector for more than a decade, giving us contracting opportunities that helped us expand our business and create stable, good-paying jobs in our community. Let us commit to embracing this unique moment in history, with our nation poised to make a major investment in public infrastructure, to create a fairer, more equitable path forward for women small-business owners across the U.S. who are just asking to be hired.

Let’s have our goals for women-owned businesses participating in the federal procurement process reflect the reality of our times—not that of a half-century ago.

Jessica Johnson-Cope is chair of the National Leadership Council of 10,000 Small Businesses Voices and graduated with the program’s first-ever class of small-business ambassadors. She is president of Johnson Security Bureau in the Bronx.

Friday, July 2, 2021

University of St. Thomas Cameron School of Business's 40th birthday celebration! At the Cathedral of Our Lady of Walsingham.

What an incredible night! I met the new Dean of the Cameron School of Business Dr. Mario Enzler. Not only he is a Swiss national, but he was a Swiss Guard for Pope John Paul II! Dr. Enzler asked me to speak about what UST meant for me. OMG! I spoke for the heart! UST was home and the place that catapulted me to new heights. I will forever be grateful to UST.

Thank you!

Soledad Tanner M.I.B


Thursday, July 1, 2021

5 steps to performing a midyear financial plan review

Written by: By Shelly Gigante
Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.

Summer is the perfect time for barbeques and beach parties, but it’s also a good opportunity to take the pulse of your saving and spending plan with a midyear financial checkup.

With the first half of the year in the rearview mirror, a quick look at your monthly budget can yield valuable insight into whether you are still on track to meet your 2021 savings goals. It can also help identify areas of waste and provide motivation to set new goals. (Learn more: Setting savings goals)

“It is always a good idea to evaluate your financial situation at certain intervals,” said Greg Hammer, a financial professional with Hammer Financial in Schererville, Indiana, in an interview. “If you haven’t met with your professional since January, it’s good to check in midyear and take a deeper dive so we can assess whether your investments are still in line with your objectives.”

The midyear checkup serves another important function, as well: “If you’re in tune with your investments and in touch with your professional, you are less likely to panic when the market starts to correct,” said Hammer. “You are less likely to make emotional decisions that can negatively impact your returns.”

1. Check your retirement contributions

Hammer suggests savers start by taking stock of their retirement plan contributions.

Savers should, at minimum, contribute enough to collect any employer match to which they are entitled, he said. Not doing so leaves free money on the table.

Ideally, you should aim to max out your tax-favored retirement plans, such as a 401(k) plan, 403(b), or IRA, said Hammer, which not only helps to build your future nest egg, but also potentially yields a valuable current-year tax deduction. Take note that Roth IRA contributions provide no tax break for contributions, but your earnings and withdrawals in retirement are generally tax-free. (Learn more: Setting retirement goals )

The annual contribution limit for 401(k) plans is $19,500 in 2021, and the total annual contribution limit for Traditional and Roth IRAs this year is $6,000.1 (That limit is $26,000 and $7,000 respectively for participants age 50 and older.)2

If you don’t have the resources to meet the max, financial professionals often suggest looking for ways to reduce your current expenses. You can also potentially allocate any bonuses or raises you get going forward to your retirement fund. Or, some financial professionals suggest, consider increasing your contributions gradually by 1 percent of your salary per year until you reach your desired goal. (Retirement planning calculator)

Even an extra $200 per month starting at age 30 can amount to roughly $454,000 more in retirement savings by the time you reach age 65, assuming a 7 percent annual return.

2. Tackle debt

Next, review your debt, said Hammer. “The best way to save is by getting rid of debt,” he said. “Is your debt level going up, declining, or unchanged from the start of the year? If it’s on the rise, you need to understand what’s happening with your financial situation and correct your spending pattern.”

Some debt, said Hammer, including student loans and home mortgages, are common and necessary, but credit card balances with double digit interest rates can cripple your budget, especially in a rising interest rate environment. Indeed, most credit cards have a variable rate, which means the percentage they charge consumers who carry a balance is tied directly to the Federal Reserve’s benchmark rate.

“Debt is the worst possible thing to carry in a rising interest rate environment,” said Hammer. (Learn more: Handling debt)

Like most professionals, he suggests consumers with multiple credit card balances tackle the one with the highest interest rate first, while continuing to make minimum monthly payments on any others to avoid late fees. Once that debt is paid, move on to the next highest rate card until you are debt-free. Just be sure you don’t pay for any new purchases with plastic while you’re paying down your debt, he said.

Your debt level is an important metric in determining your “creditworthiness.”

According to the Consumer Financial Protection Bureau, most lenders like to see a debt-to-income ratio of 43 percent or less to qualify borrowers for their most favorable interest rates.3

To calculate your ratio, add up your monthly debt payments and divide that figure by your gross monthly income.

3. How’s your emergency fund?

The mid-year check-up is also an opportune time to be sure your rainy day fund is up to snuff, said Willie Schuette, a financial professional with JL Smith Group in Avon, Ohio, in an interview.

Most financial professionals recommend having three to six month's worth of living expenses set aside in a liquid, interest bearing account, such as a money market fund or savings account, for life’s little emergencies, but you may need up to a year’s worth of expenses socked away if you are self-employed, your job security is tenuous, or your family is dependent upon a single breadwinner, he said. (Learn more: Emergency fund basics)

If you don’t have a fund, or haven’t saved enough, no sweat. Set an attainable goal and start contributing monthly, while continuing to fund your retirement and pay down debt, until you reach your goal.

Depending on your circumstances, you might also consider using these sultry summer days to score a few income-earning gigs, such as housesitting, dog walking, helping people move, painting houses, having a garage sale, or selling bottled water (as permitted by local laws) at outdoor events. With a little creativity and hard work, you could potentially have a fully funded rainy day account before the cooler temperatures descend this fall.

4. Monitor your spending

If your debt level has been stagnant since January or you’re finding it tough to meet your savings goals, put the next lazy day to good use and get your budget under control.

The National Foundation for Credit Counseling suggests consumers, regardless of their financial position, track their spending for at least 30 days to get a better sense of where their money is going, highlight areas of waste, and establish better saving habits.4

“Write down every cent you spend, and then put your spending into categories,” the NFCC suggested in its guidelines on mid-year financial planning. “At this point you can make conscious decisions regarding how you want to spend moving forward.” (Related: Budget basics)

Look for opportunities to liberate cash flow by halting memberships in clubs you don’t use, slashing your cable bill, and swapping one trip per year for a staycation.

Remember, too, that your disposable income (or spending money) is what’s left over after you fund your long-term financial goals, such as saving for a down payment on a house and saving for retirement.

Most financial professionals recommend saving 10 to 15 percent of your annual salary for retirement. That’s easiest done by “paying yourself first” through automated deferrals at work.

If you are consistently unable to save what you need to secure your future, you may be living beyond your means, which means more drastic measures may be in order, including downsizing to less expensive housing.

5. Tackle your taxes

Most of us only pay attention to taxes in December, when it’s too late to implement many of the most effective tax-saving strategies. If you meet with your tax professional now, however, you can potentially still maximize deductions and prevent future penalties.

Specifically, financial experts and tax professionals routinely suggest taxpayers check their withholding to be sure they’re on track to pay what they owe and nothing more. Withhold too much and you’ll get a refund when you file your return next year, but you will also miss out on an opportunity to invest that money for compounded growth or use it to reduce your debt. By overpaying monthly, you effectively give the government an interest-free loan.

By contrast, if you owed money in prior years, financial professionals commonly advise that you should consider reducing your withholding allowances now, which will result in a lower monthly paycheck but may result in either a slight refund or zero tax liability next spring. Ask your human resources department for a new W-4 form to facilitate the change.

Online calculators and tax preparation firms offer basic guidance on how many withholding allowances you may want to take to maximize your tax refund, or your take-home pay, but a tax or financial professional can provide personalized expertise.

Look, too, for opportunities to maximize charitable deductions, begin harvesting investment losses to offset current year capital gains, and spend down your Flexible Spending Account (FSA). FSAs are funded with pre-tax dollars and can be used to help pay for qualified medical and dependent care expenses, but any money not used by year-end gets forfeited.

“It’s a use it or lose it account so if you’re not about halfway through your account at this point in the year start looking for ways to ramp up your eligible spending by scheduling doctor’s visits and making vision appointments,” said Schuette.

Similarly, to avoid a current year penalty, self-employed individuals should be sure they’re making their required estimated quarterly tax payments, and are on track to pay either 90 percent of what they will owe for this year or at least as much as they owed last year, whichever is less.5

The year is still young for retirement savers, borrowers, and taxpayers who are serious about getting their financial house in order. By examining your finances or working closely with a financial professional, you can potentially use the remaining months of the year to maximize your 2019 tax deductions, eliminate debt, and develop a saving and spending plan that will help you meet both your short- and long-term financial goals.

This article was originally published in June 2018. It has been updated.