IN THIS EPISODE
For you to avoid these money mistakes, you need to have a strong healthy mindset and sense of discipline. It’s going to be tempting to ignore these, especially as you are boot-strapping in the beginning.
Money Mistake #1: Not Paying Yourself First
I have seen seasoned business owners and 7-figure businesses make this mistake. Because of this mistake, many of them have lost their businesses.
You must pay yourself first. It completely changes your mindset and the way that you value yourself and the way that you show up every day.
If it seems difficult to pay yourself, ask yourself this: “Are all of the things that you are paying for in your business a necessity?” I know it hurts sometimes to have to make really tough choices and to scrimp and not splurge. Girl, let me tell you something, there is a time and a place. You will have the time to spend money on business growth and the impressive things.
Whenever a client comes to me and has splurged but isn’t seeing results it is usually a hiccup in mindset. They’re doing it in the wrong order and they’re going out into the world feeling like they are not good enough. All because they aren’t paying themselves.
Your Priority #1 is to get paid, not to pay for the expenses. With the skills and inner circle that you have, you can get paid even without all of the things like logos, business cards, websites, etc. People don’t pay for business cards, they pay for the connection and for you.
Once you start to bring money in, start paying yourself. Have a budget or a spending limit to ensure that you can and give yourself your own minimum wage, even if it is something embarrassing. If you aren’t yet bringing in any money, give yourself a probationary period in which you are willing to work without pay. This is your training period that you are allowed to work for free. When that time is up, start paying yourself no matter what. Start telling yourself, “I’m worth something and something is better than nothing.” Set yourself a schedule for pay raises.
Taking money from your business and bringing into your personal life fulfills the need of contribution. This is really important and something we all need as humans.
Money Mistake #2: Not Having an Emergency Fund
There will be low seasons. There will be lulls in your business. No matter the industry. Knowing your season and preparing for them can be a game changer for your business.
When you are prepared, you save yourself from being desperate for the client or the sale. Slipping into that mindset changes the way you operate and the way you think. It holds you back from the right clients and opportunities.
That is why you need to set aside money every month during your good season. That way you have confidence that you can afford a dip or a lull, even if it’s self-imposed, is amazing.
With an emergency fund, you can start to take chances and risks and go after bigger opportunities. During your boot-strapping beginning, it is easy to get stuck without an emergency fund or a plan. You are only one person without a team so you are juggling. You are both working on your business and in your business and wearing many hats. You are serving clients and focused on client work. It’s difficult to focus on business growth when you’re still trying to bring the income in.
Set yourself a determined amount of time to be focused on client work exclusively. When you get to the time where you focus on your business, ask yourself “Where can I invest time to grow and scale and develop systems?” You can afford to work on your business for a short time because you now have cushion in the bank.
Money Mistake #3: Not Saving For Taxes
This is a big mistake that is often made when you are just becoming profitable. You have a good revenue and you are finally not in the red with your business at the end of the year. Then you get hit with taxes. It can be devastating when you think that you are rocking it and then Uncle Sam takes it all away because you didn’t plan and prepare.
Put a little bit aside every month. You may choose to do this only on your good months, but put some aside. If you are crushing it, you might want to put aside 30%. if you are brand new and a lot of your revenue is being spent on actual tax deductible expenses, do less. Talk with a tax professional about this, because I am definitely not one.
Specific Money Steps to Take
Set up a separate account or a separate place within your budget for your emergency fund and taxes. For many, creating another bank account, like a business savings account, is best. This way the money is out of sight out of mind and money you don’t touch.
For your emergency fund, pick a number that you think would be safe and build your account up to that.
For your taxes, talk to a professional to find out how much you should set aside.
Let’s Chat More
Take a moment and do a visualization of yourself in the future looking back on today and see what you did. Head on over to the Facebook Group and let us know what it looked like.
- 0:51 These mistakes really boil down to two things: mindset and discipline. Notice I didn’t say skill. Skill is something we can learn and grow.
- 2:17 If you are not paying yourself, you are basically telling yourself and the world and the universe that you are not worthy. You’re not valuable enough to get paid. You come last.
- 4:36 You can make money with everything that you know and have right now.
- 11:23 When you have the money and you don’t need clients and you don’t need money coming in, it allows you to be picky, more confident. You will maintain that high vibe of confidence no matter what happens.
- 20:50 These are preventative measures you can take to step into the role of CFO of your business and take control and take charge and know without a shadow of a doubt that you are implementing the right financial systems and measures to ward off against any unforeseen negative crappy situations and emergencies. You’re going to be able to handle it no matter what.
- 21:30 You are stepping into the right mindset into what it takes to really be the boss, to be a true entrepreneur and to be valuable, to be the #1 asset in your business.
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