How mompreneurs balance business risk with financial security

Starting your own business is risky. Giving up a steady paycheck to be your own boss takes self-confidence—confidence that you can earn a living while doing something you're good at—as well as a certain comfort level with business risk.

But not all risks are created equal, especially if you have a family to support.

Choosing when and how much of your revenue to reinvest in your business is more challenging when you're the primary breadwinner or are juggling childcare, too.

So how do you decide how to allocate your resources when weighing the needs of your business and your family? In addition to monetary resources, time and attention also need to be balanced.

Assess the level of risk

Whether as a mom or business exec, “Is it a healthy risk?" is what Steph Smith frequently asks herself. Smith is the founding partner of Industrial Partners Group, a Los Angeles-based real estate investment and development firm. She's also mom to five small children. Smith built her business by taking calculated risks, such as leasing to the cannabis industry in the early days of legalized medical marijuana.

But today, with a young family, she recognizes that her risk tolerance has changed. “I'm still willing to take a long shot, but I'm not willing to roll the dice and bet it all," Smith says. She has more non-negotiables, she says, including being away from her children for extended travel. She'd rather pass up business opportunities than risk not being there for her kids.

Give yourself a cushion

So as not to become too anxious about investing in her business, Bridget Burnham, owner of BurnBright Communications—a public relations and content strategy firm in Minneapolis-St. Paul—has created her own financial cushion.

She puts a portion of every payment from clients into a separate account, which has built up over time and now “helps me feel more secure … knowing that I have my cushion to fall back on if it takes longer than expected to get the ROI out of the investment."

Although she admits that she is more risk averse than if she weren't a mom of three boys, “Building up funds, being patient and growing at a pace that feels comfortable has worked well for me," Burnham says.

It can take money to make money

Dawn LaFontaine, founder of Cat in the Box, based outside of Boston, started her business in 2018, investing money from her husband's severance package to finance the startup. A self-described “bootstrapper," LaFontaine frequently solves problems using free or low-cost solutions whenever possible. However, she acknowledges that sometimes “not spending money is a risk as well."

It can be challenging to judge which business investments will have a long-term payoff, she says. Spending money on building an email list, developing a lead magnet and social media advertising, for example, have the potential to payoff big, or not at all. You can't always tell whether spending the money will be worth it. However, you can be sure that doing nothing will likely yield nothing, too.

Create bandwidth by outsourcing

Flavia Berys, a San Diego-based attorney and real estate broker, admits that finding balance is the hardest part of being a mompreneur. “Time is so precious already, then you factor in that every minute you spend on your business is a minute you could have devoted to your family," she says. Which is why, according to Berys, mompreneurs “should not sell their time cheap."

By charging competitive rates and evaluating which business tasks you need to personally attend to and which you can outsource to other specialists, you can free up time away from your business without negatively impacting cash flow. Acting more like a CEO than someone with “a multi-role job you've created for yourself" makes it possible, Berys explains.

No risk, no reward

Although Emma Johnson of Wealthy Single Mommy acknowledges that choosing the safe route is common, or even preferred, especially during times of financial uncertainty, a life of abundance can only be achieved by taking risks.

She advises entrepreneurs that “these are the times you should take more risk," albeit measured, smart risks—because there are few downsides and so many upsides. “The upside of risk is so much more abundant and fun than safety," she says.