I was invited by Maria Bailey of BSM Media to participate in a conference call with none other than financial wizard Suze Orman. The call took place Thursday morning and I learned more in one hour than I could have imagined. I was surprised to find that Suze had done her research and knew something about each of the bloggers on the call. It was impressive. The call itself was amazing. Suze has energy coupled with sense and I was all ears. If you were on the call as well and have written up your notes and thoughts, I invite you to link to your post in the comments below. I know each of us took our own notes and can add something to the conversation. I’m sure all of our readers would appreciate gathering as much information as they can!

The call was sponsored by Avon, a company Suze has worked with since January, 2008. Suze chose to work with Avon because she agrees with how they run their business. Suze explained that as an Avon representative, if you sell product to someone, purchase it, deliver it to them, and the buyer changes her mind, you just send it back to Avon for a refund. You as the Avon representative are not out any money. You can recoup your investment. There is no risk. That’s a company Suze can support, and she does. She is the Avon representatives’ financial advisor.

As I write up my notes from the call and share them with you, I want to be clear that I am not directly quoting Suze unless there are actual quotes around a phrase. These are my own notes, my own interpretations.The question I was able to ask Suze was

What are the three most important things an entrepreneur/small business owner can do now to put them in a strong position to grow once the economy strengthens?

Answer: Put aside money to keep yourself going personally and don’t create more debt. Stay in touch with your customers and business contacts even if you don’t have anything to sell right now. Ask them what you can do to help them even though you’ve wound down for the time being. In times like these, do what’s right and not what’s easy: Put people ahead of money. Suze’s business model is this: Serve the needs, the places, and the times around us. In other words, adapt to the economical and social environments of your customers. It’s important to show your customers and contacts that you are not a fair weather friend and that you’ll be there for them even in hard times. If you can do that, you’ll continue to have a viable business model.

The call was focused on women and how we can build more successful businesses. The most important thing I heard was that women need to be business-minded. As moms and care-givers we tend to pay others, pay the business, pay everyone–except ourselves. We think it’s somehow narcissistic and wrong to take care of ourselves before we take care of others. Suze insists this isn’t true. We have an obligation to show our families and teach our children that it is not only OK, but necessary to earn money and use that money to take care of ourselves. And by “take care of ourselves” Suze means make sure you have an eight-month cushion in savings so you can pay for your essentials (electricity, food, shelter, etc.) if everything falls apart unexpectedly. “You have to plan to use your money to protect your tomorrow.”

One of the common reactions to Suze’s suggestion of such a large savings cushion is, “How?” When you’re up against the wall and really have to make some hard choices, it’s easier to see what is non-essential. If you’re currently living paycheck-to-paycheck and have no savings, consider what can go. Be brutally honest and understand that it won’t necessarily be pleasant. You can let cable go. Maybe internet. Cut back on cell phone usage. No eating out. Suze says these things may seem essential, but if you’re really truthful, it’s food and shelter that are priorities, the rest is flexible. You’ll have to make some hard choices. If you want to secure your future so you don’t have to worry about that? Make those hard choices. “Do what you need to do today to protect yourself tomorrow!”

Key points from the Suze Orman callWomen and Money

  • Moms need to take care of themselves just as much as they need to take care of their families. It’s OK to let yourself come first.
  • It’s important to have your own bank account and be financially stable in your own right. Yes, you can have a joint account with your significant other, just make sure you have your own as well.

Insurance

  • Never, ever, under any circumstances should you buy a Universal life insurance plan. Use Term life insurance instead, but never make your children the beneficiaries. Why? Minors can’t inherit that money.
  • Do not use life insurance as your savings. Savings and insurance are two separate things!
  • Go to saveyourself.com to start saving money.

Saving for College

  • Use 529 plan to save for college. However, the danger of this type of plan is that if the stock market busts before your kids go to school, you lose your money. How do you avoid this? Stay on top of your investments and be aware of what’s happening with the stock market. You can make changes twice a year.
  • Check out savingforcollege.com
  • Only save for college if you have no credit card debt, have an 8-month savings cushion, and are saving for retirement. Take care of yourself first.

Starting a new business

  • If you’re thinking of starting a new business, it’s not wise to finance that business with your own savings. You’ll need those savings if something falls through or the business tanks. How can you encourage someone to invest in your business? Have an extraordinary idea, show you’ve done your homework, and sell it! Presentation counts! Make sure your business plan looks good and can walk the walk.
  • Never finance your business with cash advances, 401k loans, home equity, etc. if you don’t have your savings in place. You’re using the very money you will need if things don’t work out.
  • Have an exit plan. What will you do if the business doesn’t work? Many women don’t consider this when they plan the business.