October 3, 2018 by Nicki Parr, WEV’s Business Recovery Specialist
Our current intake of Smart Entrepreneurial Training (SET) students are now four weeks into their 14-week program, and are coming face-to-face with some of the more incisive and exacting questions around not only their business concepts but also their personal goals and traits. We want our SET graduates to begin their businesses with their eyes wide open and fully prepared for the challenges that lie ahead. Not only will they be asked some of the knottier questions about target customer base, marketing strategies, and business formation, we will also help them to consider the financial aspects of entrepreneurship. For instance, are they really ready to launch from a financial perspective? And, once launched, can they practice good “financial hygiene”, maintaining a clean and up-to-date set of accounts, paying bills on time, not taking on unnecessary debt, etc.?
While on the face of it, accounting and money can seem like a dry and unemotional subject, the reality is that we all carry with us some unconscious emotional biases around money. These can influence our money behaviors – how we spend, how we save, what we record, how we feel, and it can be useful to identify what some of the negative biases are so that you don’t allow them to influence how you run your business. Whether our clients are already in business or preparing to launch, we encourage them to get (and keep) their personal financial house in order.
So what is your “money story”? What are some of your common behaviors where money is concerned? Are you avoidant or pro-active? Do you open your statements and reconcile them, or pretend not to see them and leave them unopened? Do you feel like you deserve financial rewards? Do you view money as inherently good or inherently bad, or just inherently boring?
If you have never really considered your money story, it can be fascinating to start paying attention to your habits. Or perhaps all you need to do is look at your desk to get your answer! Often money-related issues can make us feel shame, embarrassment, frustration, helplessness. There can be a lot of emotional baggage to unpack which can leave us feeling confused – where did all of this even come from? Experts suggest that much of our money story gets determined in childhood and observing how money issues were dealt with by our parents and in our families, which could account for the sense of powerlessness some of us feel around our finances.
Without judgment or shame, can you start to become curious about how you view and handle money? Be honest with yourself – are you truly spending at (or below) your means and taking responsibility for your financial security? On the other hand, are you able to relax the reins a little and acknowledge that it’s ok to spend the money you have earned?
As a small business owner, your personal finances will inevitably be closely intertwined with those of your business. The same practices that I advocate for financial resilience in small business apply to you as an individual: build an emergency fund, minimize or eliminate unnecessary expenses, pay down credit card debt and get sufficiently insured. Re-write your money story so that you feel more in control, more honest with yourself, less anxious about your financial situation…and free to focus on growing your business.