You asked for more content around business finances, so we’re delivering. Welcome to Money Matters, where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.

On this week’s Money Matters, Nadine McCarthy joined us to talk about her journey through the world of jewelry with her company, Stone and Strand. Like many entrepreneurs, McCarthy saw a need for a change within an industry and set her sights on making the change herself. McCarthy prioritizes creativity, attention to detail, and personalized service when managing her for-women-by-women company.

Influenced by her time spent in Singapore and London, McCarthy’s unique global upbringing clearly shows through in her creative approach to jewelry and design. We feel honored that McCarthy was willing to share her words of wisdom with us; this is definitely a Q&A you won’t want to miss out on!

Where do you think is the most important area for a business owner to focus their financial energy?

Cash Flow and Unit Economics. Incredibly easy to say but in reality much harder to get good data on and to track as a small business on a limited budget.

What was your first big expense as a business owner?

I spent around $12K designing and developing our first website and this came completely out of my own pocket. I self-funded the company and used all of my savings to launch.

How did you decide what to pay yourself? 

We haven’t raised any venture capital at STONE AND STRAND, and are committed to growing the company in a profitable, sustainable way. This decision has a big impact on the salary level you are able to pay yourself as a founder, as our profits have to be reinvested in the business in order to sustain our growth.

As a first-time entrepreneur, I completely under-estimated the opportunity cost of starting this business, and even now, seven years later am still paying myself less than a job offer I turned down to start the company.

Despite the financial risks, I don’t regret starting STONE AND STRAND and am thrilled with the progress we have made. However, this is one area in which I always try to encourage other soon-to-be entrepreneurs to really think through. 

In order to be sustainable in the long term, a company’s business model has to align with its funding options, as well as your motivation for starting the business and the level of income you need to survive. 

How did you decide what to pay employees? 

I try to pay our employees as much as I can, given the current budget we have. People make or break a business and I want to hire the very best talent out there.

What are your top three largest expenses every month?

As a branded business dedicated to making a high-quality product, our largest expenses are costs of goods, payroll, and marketing—I see these as areas where we need to be absolutely on top of our game and better than anyone else out there. 

If you think about it, we compete directly with extremely established giants such as Tiffany & Co and Cartier. Somehow, we need to make magic happen in order to drive the same level of emotion at a very different budget.

How much are you saving? When did you start being able to save some of your income?

I have two very young kids and live in New York City, so right now it is difficult to save any of my income after childcare expenses. That’s an area I’m not willing to cut back on. 

What apps or software are you using for finances? How did you decide when to hire a financial advisor (if you have one)?

We use Quickbooks for our finances. Right now we rely on our accountants and board members for financial advice but are also considering retaining a financial advisor for longer-term strategic decisions such as a corporate structure that have significant financial implications for the business. 

Do you wish you’d done anything differently in your financial journey as a business owner?

It took me a little time to really understand the cost and consequences of different funding decisions (e.g., whether or not to raise venture funding), and also to personally dig deep and have a clear understanding of what I want to get from founding a company and whether or not that is compatible with my funding strategy. I wish that I had initially been clearer about these choices, and had acted based on them from day one, it would have saved me a lot of time and energy!

Why should women talk about money?

It’s definitely the one area of our lives that we tend to share the least about, which is such a shame given how important it is. I rely heavily on my friends and family to give me feedback on the decisions I make in other areas of my life, and finances should not be any different. 

Do you have a financial mentor?

I don’t—sounds like a useful thing to have. I personally aspire to be more like my father in my finances, so he would be the closest to a financial mentor to me. 

He was incredibly frugal in many ways; he would always take the bus rather than a taxi, and never spent any money on himself. At the same time, he ensured that we had the very best education possible (both public and private) and also invested in creating incredible life experiences for us. 

Sadly (or not) it’s not really in my nature to be quite as frugal, especially when it comes to decisions around clothing, jewelry, and entertainment. I’m a visually-led person and I love beautiful things! However, I do seek to ensure that at my core there is very little I actually “need” in my life from a materialistic perspective

What is your best piece of financial/money advice for new entrepreneurs?

Be honest about what you need to survive, and where that money is going to come from. It takes much longer and is much more expensive than you can imagine to set up a business, so be very conservative in this area!

What was the biggest money lesson you learned since starting the company?

Our biggest financial mistakes have occurred when we have tried to invest in “future need” rather than focusing on what we actually need today. For example, we built one of the early versions of our website on a platform that was way, way, way too sophisticated for our needs, thinking that some cool features might come in useful in the future. It was one of our worst decisions financially and incurred a huge time and emotional cost to fix.

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