6 Money Mistakes That Stop Your Business from Making Money
I can’t believe its May already! May of course has me thinking about Mindset & Money all month. All month long my posts will be about both of these subjects. I’ve been meeting a lot of business owners as I move further out of my comfort zone, going out and networking. One of the main things I’m seeing is that PEOPLE AREN’T MAKING MONEY!!! Its really unfortunate BUT, hopefully, something I say or do can help spark a change.
Lets get right into this topic. Poor money management has been the cause of more business failures than any other single issue. And it’s no wonder. We aren’t born knowing how to manage money. Most of us aren’t taught how to handle it either. We figure it out along the way, through much trial and error.
Those same mindset issues and bad habits that wreak havoc in our personal finances can plague our businesses as well if we’re not careful. Let’s take a look at these mistakes:
1- Not Knowing How Much to Charge for Your Personal Income Needs
This might be the biggest mistake, aside from number 3. (BTW these aren’t in order, but #3 does happen to be my least favorite of the bunch).
So what’s this great big mistake I see almost ALL online business coaches make?
Not knowing how much you need to live on!
It’s really an honest mistake. When we start out in business we might have an idea of what our “break even” number is, but the further we get into our business, the more blurred our “is this business or personal?” expense lines become.
Too many of us just figure we’ll “make it work” like we’ve been doing, without really sitting down and figuring out what it’s going to take.
2- Catching Shiny Object Syndrome
Some things are just hard to resist—especially when your friends and colleagues are all jumping on board! New tools, training, group coaching programs and even business models can all have a strong pull, and if you aren’t careful, these shiny objects can quickly distract you from your current goals.
If you find yourself catching shiny object syndrome frequently, try this two-step plan instead:
- For “too good to refuse” offers, make a plan for achieving a positive ROI before you purchase. If you cannot find a (realistic) way to make the purchase pay for itself, don’t buy it.
- For exciting new business ideas, create a “someday” list. Jot down your idea and a basic outline, then get back to the task at hand. Now that great idea won’t be lost, but it also won’t join the ranks of half-finished business plans that litter the internet.
3-Lacking a System
As an online coach, you’re in charge of making sales, paying taxes, paying your business’s bills, and issuing a paycheck for you and (maybe) your employees. And this is just the financial stuff!
As an individual human with (hopefully) a paycheck, you’re responsible for paying your personal bills, taking care of those who are dependent on you, paying your debts (if they exist), and if I have anything to do with it, building up your emergency savings fund and funding your retirement accounts.
You’re basically in charge of keeping two financial houses afloat, and if you don’t have a system or a rhythm to carry out the many tasks involved with this fun money game we’re all playing, it can be very difficult to keep up.
This is why most online coaches avoid their finances in the first place, because without a system, things get messy, disorganized, and don’t feel good or easy.
4- Falling for the “I’ve Already Spent it So…..”
If you’ve ever said to yourself, “I’m not using this subscription, but I can’t give it up! I’m still paying the launch price and now it’s much more expensive!” Then you’ve fallen for the sunk costs oops….
This common mistake is famous among economists, and we all fall victim to it from time to time. Simply put, the “sunken costs oops” is what makes us justify investing more money or time in something—even though we’re not seeing results—because we’ve already spent so much. It’s what encourages us to repair the car one more time (after all, you just put new tires on it), eat a meal we don’t enjoy (simply because you’ve paid for it), and yes, continue to pay for tools and resources you’re not using.
Take a few minutes and examine your current business expenses. What are you paying for month after month that you’re not using? Either make a plan to put them to work for you, or cancel them. Stop falling for the sunken costs oops.
5- Too Much Penny Pinching
You thought this was all going to be about overspending, didn’t you? Here’s the kicker: Spending too little is just as bad for business.
When you’re constantly on the lookout for free and low-cost tools or working 16-hour days because you “can’t afford to outsource,” you’re not doing your business any favors. Sure, it looks like you’re bootstrapping and working really hard to make something from nothing, but what you’re really doing is digging yourself a rut it will be nearly impossible to climb out of. Not only that, but you’re reinforcing a scarcity mindset that will continue to plague you for years if you let it.
Rather than pinching pennies, learn to spend money strategically. Buy what you need, when you need it. Invest in top-quality products and programs rather than settling for the low-ticket, half-baked plans. Just like quality clothes, cars and furniture, quality services and software last longer and work better. And unlike that car, good quality business tools will pay for themselves.
6- Doing Everything Yourself
As a business owner there are things you do better than anyone you know, and so you continue to do them yourselves and procrastinate the hiring of others to handle those tasks, or you avoid paying for quality, saying “If you want it done right, do it yourself.” This is flawed thinking that doesn’t allow your business (or even your own capabilities) to grow. Learn to delegate. NOW. Growth = REVENUE | You want revenue don’t ya?
WOAH!! HOW MANY OF THESE DID YOU SEE IN YOURSELF? Comment below:
Did you realize that as a Certified Business Strategist, I coach solopreneurs, entrepreneurs and small business owners on these very topics?
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