A Holistic View of Business Ownership
In addition to addressing a client’s business concepts and goals, many of WEV’s business classes also encourage aspiring business owners to think deeply about their personal goals and traits. To some, this may seem a little strange; why place this focus on the business owner themselves?
Entrepreneurs who launch their businesses with their eyes wide open, fully prepared for the challenges that lie ahead, are in the best position to succeed.
Assessing Financial Readiness
Beyond critical questions about target customer base, marketing strategies, and business formation, but it is critical to consider the financial aspects of entrepreneurship.
For instance, are you really ready to launch from a financial perspective? Do you have cash to invest in your business plus reserves you can use if necessary, as well as a clear and honest idea of when your business is likely to become profitable?
And, once launched, are you prepared to practice good “financial hygiene”; maintaining a clean and up-to-date set of records and accounts, paying bills on time, not taking on unnecessary debt, etc.?
Looking at the Money Mindset
Accounting and money can seem like dry and unemotional subjects. But the reality is we all carry 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 some of the negative biases you carry so that you don’t allow them to influence how you run your business.
What is your “money story”?
If you have never really considered your money story, it can be fascinating to start paying attention to your habits. What are some of your common behaviors where money is concerned?
- Are you avoidant or pro-active?
- Do you open your bank and credit card statements and reconcile them, or leave them unopened?
- Do you feel like you deserve financial rewards?
- Do you view money as inherently good or inherently bad, or maybe just inherently boring?
Often money-related issues can make us feel shame, embarrassment, frustration, and 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, 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?
Get Your (personal) Financial House In Order
Getting clear on your financial readiness to launch and run a business is critical to your success. But keep in mind that, as a small business owner, your personal finances will inevitably be closely intertwined with those of your business.
The same practices that we recommend to build financial resilience in your small business also apply to you as an individual. Build up 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.
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Updated on August 18, 2022