Today we’re talking about the dirty little secret of business owners everywhere, and that’s the mistakes they make with their money. A core piece of our curriculum in The Bold Profit Academy is helping small business owners figure out what the heck to do with their money and give them the confidence to manage the financial side of their business without influence from a parent, a partner, a husband, or giving your power over to an accountant.
Our money curriculum is designed to meet business owners where they’re at, and guide them through some of the most challenging aspects of money management like gaining financial literacy, having better conversations with bankers and accountants, setting up the right business bank accounts, and implementing Profit First so you know exactly how much you’re going to make, and what the best use of that money is that you’re already making.
Not only do we dedicate a full 12 weeks to building financial literacy, but you also have access to asynchronous resources and a monthly money call with me or the financial professionals on my team. The best place for you to start is by downloading our free Revenue Goal Calculator. For a limited time, I’m going to be offering 15-minute one-on-one sessions with me to walk you through using the calculator and help you set the best goal for yourself.
Ready to talk about the dirty little secret of business owners everywhere and what you can do about it?
Let’s talk about the mistakes that we make with our money. Sometimes, these mistakes add up to hefty sums. I certainly know that has been true for me. Countless times, I’ve sat across from a person in tears of embarrassment or shame over the choices they’ve made and the ROI not realized, the $30,000 invested in branding that didn’t lead to any more sales than they already had, the EIDL loan that they felt like they’ve blown on team members that didn’t work out, the tens of thousands of dollars poured into Yelp ads, Facebook ads, print ads that didn’t bring a single customer through the door, the $60,000 on courses that were half-implemented and ultimately didn’t have any real strategy to them that left them with a Franken-business that was too complex to keep up with.
Just the other day, a person in The Bold Profit Academy found $10,000 by doing the plug your money leaks exercise because they forgot a very expensive subscription that they weren’t using. When I asked a potential client what her expenses were for her business, she teared up saying that she never looks at her bank or credit card statements. I’ve made the mistake of paying down debt too quickly and leaving myself strapped for cash. It happens. When you beat yourself up and allow shame to swallow you, it becomes hard to receive the support that you actually need. I know that we want to bury these things.
You want to be seen as knowledgeable and like a business person who has their shit together. You want people to think the business you bragged about starting is succeeding beyond what even they can imagine. You absolutely do not want to think about how you could have paid yourself maybe a little more with the money that you had sunk into ads or some other investment that hasn’t yielded a return. You certainly do not want to talk about how you might be up at night lying awake thinking about impending credit card bills. Unfortunately, burying these things, not talking about them is the absolute worst thing that you can do after making a money mistake. Shutting down, being secretive, hiding, or isolating yourself, yes, those are self-protective but do not serve you as a business owner. Avoiding looking at your money, never investing in growth again, never hiring another team member, never seeking out the support you need will only make things worse.
As a business owner, the name of the game is resiliency. to keep going, gently putting one foot in front of the other, to continue being curious and experimenting so you can find your secret sauce in how you want this entrepreneurship thing to work for you.
Reframe your money mistakes so you can keep the momentum going instead of falling into a trap of feeling stuck and not moving forward.
One, change your expectations from “I have to be perfect with my money” to “I expect to make mistakes with my money.”
“When I make mistakes with my money, it’s a great way to learn,” that’s the mantra. When I make mistakes with my money, it’s a great way to learn. I look forward to messing things up and figuring them out. What if you shift the energy? So many people tell me that they feel like they have to be perfect with their money in order to make money, and that’s not true. That’s not actually how money works. Change those expectations.
Two, this is a great place to set some boundaries around what’s okay and what’s not okay when you experiment with money.
How can you work with your risk tolerance, because not taking risks is not acceptable. The very nature of entrepreneurship is risk and high stakes. I see risk as a spectrum. It’s not either you have it or you don’t have it, but it’s this spectrum from low risk to high risk. In every given point, we’re navigating this spectrum. Now, when I was first starting out and I was first starting to build trust with myself and build that commitment muscle, the risks that I took with my money were smaller. It was buying something for $500, $1,000, or $2,000 before I invested much larger sums of money, like $12,000, $24,000, $30,000 at a time into my business. Really understand what your boundaries are.
Also, Profit First really helps you figure out exactly how much you have to invest and how to save money so that you can invest in the future. Instead of just always pouring out money, being more intentional about it and saying, “This is what I have now. If I save this much, then I have this much in six months and then can make that investment.”
Three, have a sounding board for when you’re making an investment.
Someone who can talk about financial decisions with you. Someone who has maybe even experienced this and has had to make these same decisions. This is where mentorship really pays off. One of my favorite things to do is save my clients’ money by helping them evaluate these types of decisions because we all have our low moments, we all have our moments of desperation where a shiny object is oh so shiny and we need to talk it through. As a matter of fact, I just reached out to one of my mentors and asked them about an investment that I was considering. Ultimately, I didn’t make it. The person was actually able to help me instead of me going and spending money with this other person, and it saved me a good deal of time that I really didn’t have to focus on it anyway.
Four, educate yourself on the investment.
Whether this is investing in the stock market, real estate, a website, your own skill set, a program, research it beforehand, vet the person’s credentials, book a call with them, follow them on social, and sign up for the email. Before I started managing my own investments, I read a ton of books, talked to people who were already doing it, interviewed them, understood my boundaries, created a tiny plan that felt doable for me, and I still lost money, quite a bit actually. But that allowed me to refine my plan, evolve my thinking, tweak my boundaries.
Five, stop making financial decisions from a place of emotion.
Money is an inherently emotional topic, so is how you feel about your business. Making decisions from a place of emotion does not lead to the best decisions. Your emotions and your energetic ups and downs can create feast and famine cycles in your revenue. It will waste money when you buy from a place of FOMO, insecurity, or spending big bucks because you’re excited. Sometimes that happens. Sometimes we’re so excited to learn or do the thing we spend the big bucks on. It’s not always from a place of insecurity or FOMO.
I’m a big fan of processing emotion outside of your business and money decisions. I have a whole morning practice that allows me to regulate my energy and my emotions. I get support from a therapist. I have my journal. I put a pause between the stimulus and the response. Having emotions and making decisions from emotion are two different things. We’re allowed to have our emotions. We are human beings. Nothing is going to change that. That is the human condition. We can address those emotions in a way that does not impact some of these more important decisions in our business.
Knowledge is power. Financial literacy is power.
When you learn how to talk about money when you have a line of sight, when you understand how to allocate your revenue and give every dollar a job, navigating not only the day-to-day becomes easier but you will minimize the likelihood of those moments that cause you embarrassment, and it’s going to allow you to move forward when you do experience a blip.
In closing, I want you to pull out your journal after you listen to this. Take a moment and reflect on your money, your relationship with money, and ask yourself, “What is my experience with my finances right now? How do I want it to be different?” Then download the Revenue Goal Calculator and book your 15-minute private call with me so we can walk you through using it and setting up your best financial goals.
On a recent call with a female business owner, we were able to get clear on exactly what would make this person feel financially successful, what motivates them beyond the money, figure out how much that was going to cost them to achieve that, and reverse engineer how they get there including how much she needed to pay herself. That single conversation is going to make a huge difference for her this year. These are the types of conversations that I want to have with each and every one of you.