How many times have you heard someone say, “I’m just not a money person”? Have you ever been that person? It’s a common expression and an easy escape hatch to fall through when you’re staring at spreadsheets full of numbers and formulas. But it’s a phrase, and an attitude, that’s ultimately unproductive and stopping you from taking your business to the next level.
The truth—one that many people wish they could ignore—is that money is the blood that pumps through every part of your business. It fuels your marketing efforts and product initiatives. It keeps the lights on. And, hopefully, it pays the wages that support everyone in the business having a quality of life you’re proud of. Especially you.
If you stop and think about it, there’s literally no aspect of your business that money doesn’t touch in some way. Take customer service. It’s easy to reduce it to phone calls, emails, and scripts—not having anything to do with finances. But what does creating an unbelievable customer experience do for your business? Is it creating a customer for life? How much is that worth to you? Growing your understanding of money is about digging down to see the very real impacts and implications of how money moves through every aspect of your business.
This pivot can be especially hard to make if you’re someone who doesn’t naturally focus on the money side of your business. Maybe what drives you is having an impact on your local community, or creating a legacy that goes beyond you, or maybe it’s all about a passion to create your specific product or service. Whatever those other drivers are, money always ends up playing a role. It increases your ability to impact your community, it sets the scope of the legacy you’re creating, it enables you to invest even more in developing a product that disrupts and revolutionizes your industry.
Here are some important things to think about as you look for the motivation to shift your relationship with your numbers:
- People who are money-savvy end up running the most successful businesses. There’s no guarantee that your business will prosper just because you learn how to read financial statements. But without this skill in your arsenal, you’re fighting an uphill battle. You may be thinking, “This makes sense for people in a financial business, but clearly, this doesn’t apply to me… I’m a contractor (or a doctor, or an engineer...).” The truth is, it doesn’t matter what industry you’re in. There are plenty of musicians who have built empires because they recognized that understanding their business from a financial perspective helped them make their art. And, for you, it can help create a business capable of turning your dreams into realities.
- When you stop worrying about money, it frees you up. When you hide behind the mask of not being “a money person,” it often causes the opposite effect you’re intending: your lack of understanding doesn’t decrease your anxiety, it increases it. Not being on top of your financial situation is what perpetuates the cycle of your fear about it. You worry about whether you have enough cash to cover your bills next month. You don’t know if you have enough set aside to pay your taxes this year. Imagine taking all of the energy you spend worrying and putting it into your marketing or product development instead. How much better off would your business be?
- You’ll make better long-term decisions and avoid the “ping-pong effect.” When you have a solid understanding of your financial performance and its impact on all aspects of your business, you’ll automatically start making better decisions. Without this perspective, you’ll find yourself too often making the best guess based on what you know or feel at the moment. It’s not that gut feelings aren’t important, but relying on them too much results in the kind of ping-ponging that probably sounds familiar: growing your staff too quickly and then having to lay them off, investing in a new piece of software for your company and then abandoning it months later when you realize you can’t support it. These unfortunate events all have a serious financial—and emotional—impact on you, on your team, and on your business as a whole.
Here’s the best news: no matter how long you’ve been hiding from your finances, you still have the choice to change it. It comes down to whether you’re ready to take control of your financial future or want to continue to feel victimized by it. Given the right tools and careful explanations, you can change your relationship to money—and the results will follow. The challenge is stepping over that escape hatch and saying, “I’m up for the task.”
What have your struggles in understanding the finances of your business been? Where are you stuck right now? What are you doing to change this?