Entrepreneurship is rooted in sacrifice and requires immense commitment, but the financial benefits are well worth it. According to Federal Reserve data, in 2019, the median net worth of a family was $122,000, compared to $380,000 for a self-employed family. 35-year-old Pittsburgh resident Andrea M. Robinson, who is the founder of the luxury botanical skin care line " Forever Drea Marie, had this distinction in mind when she decided to found Forever Drea Marie. Robinson plans to launch her beauty brand in the second quarter of 2022, but wants to ensure that she makes wise financial decisions. Here, Brittney Castro, a certified financial planner with Mint, an online budgeting tool, shares financial strategies that will help Robinson's business succeed in the short and long term.

Estimated annual revenue before taxes: $25,000. Monthly expenses: $900 (including product and marketing expenses, office space) Estimated total net worth: $25,000 Liabilities: $20,000 (including website development, inventory, and photography) Savings: $20,000 Business financial goals: double revenue in first year and expand into the makeup category. In the first year, the goal is to generate enough funds to double revenues and expand into the makeup category.

Andrea first needs to research the beauty market to determine the funding needed to start the business. All funding sources (traditional bank loans, angel investors, venture capital) have their pros and cons. For example, traditional loans are attractive in that you remain the sole owner of the business, but you must usually present financial statements and have a good credit score to qualify. Angel investors and venture capitalists, on the other hand, require a pitch meeting to get them interested in your business idea.

Not all businesses are built the same, but one way to understand the baseline is to talk to other beauty business owners about the capital they used to start their journey-the Small Business Administration website is a great resource. The Small Business Administration website is a great resource. Starting a business tends to take more time and money than you first anticipated.

Andrea should save as much income as possible. Create a profit-first account and stash away at least 10% of annual earnings, rather than putting everything into business expenses. Andrea should also anticipate the possibility that she may not be able to pay her salary for several years.

It is important for Andrea to set aside a personal budget as well as a business budget. It is equally important to consider where other sources of funding for the business will come from, such as loans, family, friends, and personal savings. She can start by reviewing her personal budget in the Mint app.

If Andrea needs to borrow more money to finance the company, she should develop a debt repayment strategy. She should begin repaying the debt with the highest interest rate first, and then make minimum payments on the remaining debt.

This article appeared in the May 2022 issue of Marie Claire.