Previously in our series about the Modern Woman of Proverbs in the job market, we’ve talked about her as “The Student” and “The Employee”. To finish our series, let’s take a look at the Modern Woman of Proverbs as “The Entrepreneur”, the woman who starts her own business.
In Proverbs 31 we find interesting characteristics of the entrepreneur-ess. It says:
She considers a field and buys it; out of her earnings she plants a vineyard…She sees that her trading is profitable, and her lamp does not go out at night.Proverbs 31:16, 18
Starting your own business has many challenges, but it also affords many rewards! These rewards can be obvious, like controlling your own hours and working from home. But it’s important that the entrepreneurial woman commits the details of the above verses to memory. Notice verse 18, where God wisely included the word “profitable”. Why? Because it’s important that the woman who starts her own business remember that she needs to be prepared. To succeed, she will need to study the basic concepts of finance and administration and go after the fundamental knowledge concerning her business.
Entrepreneur, it’s important that you understand and properly handle everything involved in producing your product or providing a service. Let’s get started with some basic concepts:
- Revenue: This is the amount of money you will receive for your product/service. The sum of everything you received in the month will be your monthly revenue. It’s important that you keep track of this, so you can monitor your finances and study your business history, identifying where you can improve or where you can repeat strategies that worked;
- Price: This is the amount you will charge your customer. Within that amount, you need to consider the cost of producing the product and/or the cost of your service. Do you understand the difference between price and cost? The price is how much the customer pays for that product, while the cost is what you pay;
- Cost: Cost is what you had to spend to sell your product or the cost of your service, such as water, electricity, internet, among other costs. You will only be able to track the true profit of your business once you can subtract the costs;
- Profit: Here’s where the term “profitable” from the verse above appears. The profit is what actually goes into your bank account at the end of the month. You can calculate your profit by subtracting your Total Monthly Cost from your Total Monthly Revenue. Let’s put everything together: If you sold 10 products/services for a price of $100 each, your Revenue at the end of the month was $1,000. If the cost of each product was $50, your total monthly cost of selling 10 products was $500, so your Profit at the end of the month was actually $500;
- Profit Margin: the profit margin is the percentage of profit you have on a product. To find your profit margin, you need to divide your Profit by your Total Revenue. In our example, your business would have a 50% profit margin ($500 profit divided by $1,000 revenue). Armed with this information, you can “calibrate” the price of your product/service according to the profit margin you expect to have.
God included the word “profitable” in that verse because He doesn’t just want you to have your own business. He wants it to be successful too. Take the time to record your company’s financial transactions. Take stock of whether your work is really profitable and to what extent.
What about verse 16? In this verse, we learn that the entrepreneurial woman buys a vineyard with the money she earns from the purchase of a field. She doesn’t spend the Profit she had on the purchase of the field. Wisely, she invests it.
Another way to invest is to create an “emergency fund”. Given the uncertainty of dealing with your own business, it’s important that a considerable portion of the month’s profit is dedicated to the “emergency fund”. On months when your business performs well, you can save more. In the month that your business doesn’t do so well, you have peace of mind because of the money that you saved in the good months.
A good metric to follow is to set aside two to three months of your monthly cost of operation. Let’s assume that you need a minimum of $100 per month to pay your bills and maintain the company. Ideally, you should have an “Emergency Fund” of at least $300. If you’re starting your business now, remember that this will take some time to achieve. But it should be your goal. Whenever there are some funds left over, treat them wisely.
Lastly, if you are an entrepreneur, read Stanley Tam’s book God Owns My Business. It highlights an important rule for success—see God as your business partner. Before you start your day, invite God to be part of all your company’s financial decisions. Ask Him for discernment as you conduct your daily responsibilities and wisdom to run a profitable business. A Woman of Proverbs knows God cares about her business! After all, it’s yours, and God loves you more than you can imagine.
With this declaration of God’s love, we conclude our series on the Modern Woman of Proverbs. I hope you enjoyed this series just as I enjoyed writing it. As always, we’re here to talk and help! As a The Girl Writes reader, you’re part of a network of professionals in a variety of industries. Have a question or concern about being a woman with a career? Leave it in the comments.
Until next time!