There are so many potential money mistakes an entrepreneur can make…and many of them are INVISIBLE to the business owner! Very few entrepreneurs start their business with a blueprint for profitability. If you are like me, you probably started your business because you wanted independence and had a passion for the work you do.
But what many entrepreneurs don’t realize is this…
Learning to MAKE money is a small part of being financially successful. Just because you know how to make money doesn’t make you an expert at keeping the money you work so hard to generate.
Most of us are never taught how to be good financial stewards (I certainly wasn’t) so it’s easy to make money mistakes and rack up debt thinking you are just leveraging your financial assets to grow.
Here are four of the biggest money mistakes I see entrepreneurs make:
1. Mental Revenue Planning
Mistake #1 is the act of planning for your financial goals in your mind – instead of putting them on paper. Nine out of the ten entrepreneurial clients I coach don’t have a process to map out their potential revenues. Without this step, the small business owner will almost always waste time and money on low payoff products or set themselves up for the dreaded cash flow crunch.
When you muse over your potential revenue in your head you will often make the picture look far better (or far worse) than it really is. When you learn how to map out your revenue potential you can see your situation for exactly what is realistic based on your current offerings and time availability. Then you can make smart decisions for which of your offerings you should put the most time and attention into first.
2. Avoiding Reconciliation
In my MoneyDNA 2.0 program I teach my participants about the Seven MoneyDNA Blueprints. Interestingly enough, over 50% of my graduates discovered they had an “Avoider” Blueprint – and often avoided reconciling their books for months (if not years.) When you avoid looking at your financial cash flow picture you will have no idea how much money you are spending to make the money you have right now. I’ve coached millionaires who were actually broke because they spent more growing the business than they could make with their offerings.
Avoidance is only going to make your financial prowess weak and powerless. Most Avoiders simply need an easy to use a system to stay on top of their cash flow so they can make better decisions. But its also about making the commitment to be a good financial steward and have on-going reviews of your books.
Solution: Create a weekly or monthly habit of reconciling your bank account. If you struggle with numbers, hire a good accountant (or bookkeeper) to help — but be sure to review the numbers too!
3. Over (or Under) Delegating Bookkeeping
The third mistake made around money is not having a good bookkeeping process. Many entrepreneurs are fearful of letting go and hiring a good bookkeeper to keep them on track (which in turn leads to the avoidance issues.) But I’ve also discovered that once you do have a good bookkeeper that some small business owners will over delegate and abdicate responsibility (which often leads to corruption or costly mistakes.)
Delegating the routine bookkeeping activities like reconciling your transactions against your bank statement can free up valuable time. But you have to stay in control of your financials with regular reviews of your financial statements.
Solution: Be sure to always have at least two people who touch your books – a bookkeeper and an accountant – to avoid mismanagement! And you must review it at least once a month too.
4. Cutting Back During Growth
The last mistake is more of a mindset issue – and a sign of a common hidden profit drain – is “fear disguised as logic.” Cutting back on marketing activity, team support or coaching when you want to grow is a sign that you have limiting beliefs or conflicts in the way of playing your biggest game. Look, HOW you make decisions to grow your business is the key to getting more successful. If you hold back from investing in a strategy, resource or support that you know could help but due to fear you just don’t pull the trigger, your mindset needs a tune up.
Its normal to not know how everything will turn out in your business – that’s the name of the game as an entrepreneur. If you want to grow your impact and income, you need to elevate your internal success blueprint so that the clarity and courage to make investment decisions is easier.
Solution: Don’t let fear make your growth decisions! Decide where you want your business to be then create a plan to get there.
When you suspect your decision-making is stuck in fear and your mindset could use an upgrade so that your actions are programmed for success on auto-pilot, you’ll want to start with the MoneyDNA 2.0 Success Transformation Program. This powerful training is exactly how I reprogramed my “scarcity patterns” and upgraded my money habits so that I could create my OWN economy, in both good and turbulent times.