Your mindset around money is one of the most important factors in determining the success of your business. Yes, it’s a bold claim, and perhaps a surprising one for someone who is very candidly not “woo-woo.” But I 100% believe this statement is true.
As a former CPA and numbers-fanatic, I was surprised to learn that a lot of entrepreneurs hate the money in their business. They hate talking about it, they hate thinking about it, they hate checking up on it. As someone who gets excited for tax season and loves to do a financial review every month, this was confusing behavior to me. What I love about numbers is that unlike pretty much everything else in life, they are consistent. One plus one will always equal two. Where else in business can we get that kind of certainty?
I realized, then, that the problem is not around the numbers themselves, but people’s beliefs about and attitudes towards those numbers. For some, earning money is equated with greed or arrogance. For others, childhood memories remind them that conversations about money lead to arguments and resentment. For others still, they are taught not to talk about money – it’s uncouth.
You might be wondering, why does this matter? Perhaps you run a successful business with lots of clients and work you enjoy. But let me ask you this – do any of the following sound familiar?
- You hold your breath at tax time and hope you have enough to cover what you owe.
- You avoid checking your bank account because seeing the number stresses you out.
- You don’t like telling prospective clients how much you charge.
- You don’t know, on any given day, how much cash is in your business bank account.
- It feels like clients take forever to pay you yet you hate reminding them to do so.
If any (or many) of these hit home – you’re not alone. Talking about the money in your business, whether that’s with yourself or your clients, can be an uncomfortable subject for many. But in order to run a successful business where you are truly in charge, you need to take charge over your money. And this requires having the right mindset. So what is the right mindset? Here are a few steps I’ve found helpful to get my mind in the right place and my money under control.
Tip #1: Understand your own money blocks.
Not to get all therapist on you, but in order to move forward and have the right money mindset, we need to start by understanding all that crap from our past. Start by asking yourself these questions:
- What do I think about people who have money? Or people who are considered successful? (e.g., people with a lot of money are greedy)
- What was I taught about money, either directly or indirectly, growing up? (e.g., money leads to anger and fighting)
- How do I feel about money in my business today? (e.g., I’m afraid I won’t be able to pay my bills if I lose a client)
Now work to understand how these blocks are affecting how you act in your business. If you believe that all successful people are well-educated but you did not complete your college degree, is that a block that is keeping you from charging what you’re worth? Do you avoid checking your bank balance because growing up your family lived paycheck to paycheck and the bank account was always overdrawn?
Once you’ve identified your blocks and how they are negatively affecting you, make an action plan to combat each one. I like to write them down on a piece of paper that I hang up in my office, and next to each one, I write my “action response” to each block. For example:
- Money Block: Women aren’t as valuable or hard-working as men.
- Negative Affect: I’m not charging enough for my services in my business.
- Action Response: I am valuable and worth every penny I charge. Even if it means I lose potential clients, I will not undervalue my work or my worth.
What are some of the money blocks holding you back and what are your action responses to them?
Tip #2: Set your intentions and identify the actions needed to get there.
Once we have an understanding of what is holding us back and a concrete plan to get past those blocks, we can turn to look towards the future. A lot of business owners I know are big about goal setting (as they should be), but they fall short when it comes to financial goals.
In this case, you’ve got to play to win. Think about whatever you need to cover your bills (including paying yourself) and quadruple it. Or maybe even more. Think bigger. Don’t settle for what feels achievable because you’re afraid to go for greatness.
What matters more than how “reasonable” your financial goals feel to you is your action plan to get there. So take whatever big financial goals you’ve come up with and craft out the steps you will take to get there. If at that point it still feels unobtainable, then maybe it is. But don’t decide from the start that something is unobtainable simply because you’re afraid to go after it.
Tip #3: Create and implement daily money mantras.
As previously stated, I’m not a big “woo-woo” person, but I do think daily mantras can help. I’ve introduced them into my business recently and I do find that it sets my intention for the day and gets my head in the game. Using the information you’ve gathered from understanding your money blocks and setting your intentions, write down a few money mantras and hang them up in your office. Make sure they’re in a spot where you can easily see them, and start off your day by loudly (and proudly!) pronouncing them.
Here are a few of my favorite money mantras:
- My products/services provide great value to my clients/customers.
- My clients/customers willingly pay for my products/services because they give them great value and benefits.
- You have to spend money to make money / the risk now is worth the return later.
- Money doesn’t buy happiness but it does provide me with choices. The more money I have, the more choices I have, and the more impact I can make.
- I deserve the money that I make in my business.
- I am capable of running a successful business.
- I can earn more money in my business; the sky’s the limit.
Tip #4: Ditch the negativity.
Jen Sincero, author of “You are a Badass” and “You are a Badass at Making Money” once said “You have to want your dreams more than you want your drama.” YES GIRL.
I’m one of those people who cringes at negativity. I hate complaining and it feels like nails on a chalkboard when I hear someone self-deprecating or complaining about something that seems irrelevant or unimportant.
That’s not to say that I don’t believe in venting or getting things off your chest, I do. I just hate being around people who constantly complain about everything and ultimately it’s because it comes down to one thing – they’re blaming others for their problems.
Not sure what I mean? I’m talking about that person who says “I’m so broke” or “What if my business fails?” all the time. They’re starting from a place of negativity, which I’m convinced nearly guarantees what they’re afraid of will actually happen.
Instead, start from a place of positivity. Perhaps your bank account feels empty right now – but instead of saying “I’m broke” say “I’m building my business.” Instead of worrying about your business failing, create an action plan for how to ensure your business doesn’t fail and a backup plan to account for the inevitable bumps every business faces.
Tip #5: Don’t ignore your money.
This is a BIG one for me. I will admit that when I’m going through slower periods, sometimes I’m afraid to check my bank account or my credit card statement. But it’s critically important that you stay on top of your money. You need to understand where it’s coming from and where it’s going. Without that knowledge, you can’t make informed decisions in your business.
My tip here is simple – set up a regular financial check-in in your business. I have a recurring event on my calendar for every two weeks. I use this 30-minute time slot to review my income statement (income coming in and expenses paid out), my balance sheet (cash in the bank, debts I owe) and cash flow projections (what expenses I have coming us vs cash I have coming in).
I will also use this bi-weekly meeting to review my financial goals and make changes if needed to ensure I’m on track to meet those goals. Lastly, I’ll follow up on any unpaid invoices from clients to make sure that I’m being paid on time.
Tip #6: Be open to opportunities.
Think back to those intentions you set above and your broader business goals. While it’s good to have a concrete action plan for how you’re going to get there, if you are too rigid about that plan, you’ll miss out on opportunities that could expand your business in ways you never imagined.
It’s especially important to make sure that your rigidity doesn’t just lie with your action plan. If your money blocks are preventing you from seeing or being open to opportunities, you are leaving money on the table. For example, if you are uncomfortable making lots of money and you hit your financial goals during the year, you may reject other well-paying opportunities because you feel like you’ve already “made enough.” Remember, you are always deserving of more money in your business.
Tip #7: Give yourself the room to make mistakes.
Lastly, remember that no one is perfect. In every aspect of our businesses, there are going to be days when we falter, and that’s OK. Having a strong money mindset is not something you figure out one day and then it’s good forever. Like most everything in our businesses, having a strong money mindset is something you have to work on every day.
Give yourself the room to make mistakes. Recognize if you are having a hard day, and be patient with yourself. We can’t all win at everything, every day. If you are struggling, come back to those blocks and your action response plan. Revisit your money mantras and say them a few more times than you normally do. And surround yourself with people who have strong money mindsets – not only are they great examples to mirror, but they will help pull you out of your funk in those tough times.
Having a strong money mindset is the key to a healthy and successful business. Without one, the money in your business will work against you and not for you. By understanding your money blocks and creating an action response plan to overcome them, implementing daily mantras to keep you focused, and staying on top of your money and knowing where it comes from and goes, you’ll be the one in control of your money in your business, and not the other way around.