The way you as an entrepreneur think about money has a huge impact on the development of your company. This is because your (often unaware) views on finances will influence various processes, from price setting to financial risk taking, or the way you handle bigger business opportunities.
The way you think of money, of people who have them and the ones who don’t and how easy or hard money are to get will affect the way you see the world, who you deep down want to be and who you fear to be. We all internalize concept around richness, scarceness and the flow of resources as we grow up and go through life. To get clear of these internalized views will help you see where you may be holding yourself back.
Where to start?
To begin with, analyze the story you are telling yourself. I often do this by a brainstorming excercise. On a blank sheet of paper you write down all the words that come to mind when you think of money. Don’t edit or think deep, just write down the spontaneous words that come to mind. When you have got that you can turn the paper and on the other side you write what comes to mind when thinking rich and when thinking poor. Now have a look at the two sides of the paper and see what patterns you can see. How do they affect you?
Underestimating your own financial skill set
A while back I was coaching an entrepreneur who told me that he felt insufficient and lacking control of his business because he was not doing his own bookkeeping. After this confession I asked him to tell me a bit about his company’s finances. He went on to describe the entire budget of the last couple of years from the top of his head. A few seconds later he went quiet and in that silent pause I could see his realization: he had more control than he thought.
This can be your starting point too. Check your assumptions and beliefs. Ask yourself: how much control do I have over my company’s finances? How much of these financial matters do I have the power to influence and change?
After you get a snapshot of where you are right now, look for the evidence that shows you that you do have control over your finances. Work on understanding both the direct and indirect ways in which you affect the company’s finances and this will ensure that you are not unknowingly acting as a blocker out of neglect.
Where responsibility ends and risk aversion begins
I have also met the other type of entrepreneur, the one who has a very strong sense of financial responsibility. This type sometimes steps back from good opportunities because they do not dare to take the risks associated with a deal.
Having “you know what you have but never what you get” as a mantra often ends up holding many companies back. If you find that this applies to you, you might benefit from exploring the world of calculated risks. Doing this can tap into a lot of latent potential and give you the space to experience unprecedented growth. Much like a chain that breaks and then releases a lot of energy.
Of course, this does not mean that you should experiment with taking risks beyond sound finances, but being an entrepreneur involves accepting uncertainty, risks, and having adequate strategies of coping and dealing with these.
The perspective game
Lastly, quite often living an entrepreneurial lifestyle involves shifting between two perspectives on finances and money. For example, at work you might be handling transitions of the order of millions, while at the grocery store you might still choose the cheaper product over the more expensive one because you are holding back on your own salary while growing your company and need the extra cents to last the month.
Acknowledging the 2 perspectives (businessperson and private person) and managing the mental mismatch that can be in handling them is crucial. This will allow you to switch more easily between these two perspectives and draw sharper lines between your personal and business thinking around finances.
Do you have any questions, would you like to know more, or you would like to simply get in touch? Email us at info@guldkanten.com
Have you missed the previous blog post? You can find it here: #1 - You are action-oriented. Now what?
Check out the next blog post from this series for entrepreneurs: #3 - How to create a personal and business growth synergy