Even though one of THE most rewarding aspects of running our own business is being able to make a living doing what we love, ‘money’- the stuff which enables us to turn our passion into profits – is very often the bit which intimidates us the most!
There are very few people I know who are truly comfortable thinking about money, never mind talking about it! It’s certainly a recurring issue for many of my clients – but it’s important that we get comfortable with money because there’s no getting away from the fact that generating an income and being paid for what we do, is what takes our activity into the realm of truly being a business.
It’s only money
It ‘should’ be simple, right? Because all we’re talking about is a financial exchange between you and those who want your service or product and yet many of us feel awkward about charging our true worth and would feel much better if clients just handed us what we’re due without money being discussed at all!
Alas, things are rarely simple where money is concerned because in reality it’s so much MORE than a financial transaction. The whole ‘money thing’ is steeped in emotion and tied up with things such as validation, self-worth, value, recognition, approval – and THAT’S why we tend to get heated up about it!
The thing is, when you love what you do so much, the need to make money can easily take a back seat. Maybe you say things along the lines of, ‘oh I’m not motivated by money’ and yet, deep down inside you’re aware of using this as a shield to protect you against something you find uncomfortable or difficult – or both!
So, I think it’s fair to say that many of us have quite a complex attitude to money and all the stuff that goes on in our HEADS can be a huge psychological barrier to overcome. So it’s always worth looking first at the emotional baggage we carry around with us.
Try this quick exercise…
Look at these statements and simply notice your instinctive gut response to each of them.
- Making a difference is incompatible with financial success.
- Money is not a motivator for me.
- The last thing I want to be is a sales person.
- I don’t have enough money to start/build my business.
- Making money is hard.
- Money is complicated.
- I’m not good with numbers.
- Successful, prosperous people are different to me.
When it comes to money, we all have baggage
Now, can you see from this short exercise, how some of your instinctive responses were positive and empowering while others were negative, fearful or resentful? Well, that’s the ‘baggage’ I was talking about!
The reality is we ALL have baggage when it comes to money but recognising our personal shortcomings and biases around money is the first step to ‘unpacking’ that baggage!
I’m not suggesting this is something you can do instantly because much of the baggage may well have been with you since childhood but being aware of your own ‘money vibration’ is a great place to start. From there you can then explore your beliefs and decide whether you want to hold to them or whether new beliefs about money would serve you better.
Knowing your numbers
As a small-business owner, you wear a lot of different ‘hats’ and your days are filled with a variety of different tasks. But one critical activity often ends up pushed onto the back burner. And what is that critical activity? Getting to grips with the financial fundamentals – the key numbers which will enable you to take your passion and turn it into a profitable business.
- Do you know precisely how much money you want to earn in a year?
- How much is ‘enough’?
- Do you know how many of each of your services/products you need to sell per month to give you the income you want?
- Do you know how much to charge your clients for the service you provide, in order to make a profit?
- How many clients do you need per month willing to pay you what you are worth? (Come to that, do you know what you’re worth?)
- Do you know what your costs and expenses are?
- After all your costs and expenses, is there at least enough left over to pay you a salary?
Now, I know these are ‘financial fundamentals’ but the truth is, you don’t need an in-depth understanding of accounting to know which numbers are critical to the health of your business and as such, deserve your full attention.
If you’re someone who’s a bit intimidated by the financial side of running a business, it could well be that just asking yourself these questions made you squirm. You are certainly NOT alone – many of us feel uncomfortable and experience massive resistance when it comes to tackling these financial fundamentals but spending some time getting to grips with them will free you from their tyranny. It means you can measure your progress, make informed decisions, tell if you’re on track and, importantly, adjust your plans as needed if you’re not.
Money IS undoubtedly an important part of creating a sustainable business. It’s certainly NOT all about the money – autonomy, fulfilment, passion and purpose are likely to be much stronger motivators – but neither are they mutually exclusive and if nothing else, it’s important to make sure you get paid for what you love to do so that you can can continue to do what you love to do!
Over to you!
We all have blocks and beliefs about money – how have these played out in your business? How would you describe your relationship with money? Is money a difficult subject for you in your business?
I’d love to hear from you so please post your thoughts and comments below….