I am distressed by debt and am actually quite annoyed by the fact that I fell into a typical new business owner mindset of just throwing money at my business to see what stuck. The result was a $6,000 loss for my business the first year. Part of that loss was unrealistic income projections and the rest was bad purchasing decisions.
The second year I applied my personal money mindset to my business and at the beginning of December I had a nice chunk of change sitting in my business bank account. I was impressed with myself because although I worked for free that second year I had added in a small salary to me and payments toward that $6,000 debt into my third-year budget. I had a six-month business emergency fund. I had arrived at “real” business status.
The day after I created my third-year budget it occurred to me I would have to pay taxes on that nice chunk of change sitting in my business bank account if I carried it from December 31 to January 1. Ouch! What a difference one day can make.
I buried my saver mindset that month and for me it was very, very hard. My first step was to withdraw the money I had budgeted to pay back toward my first year’s debt. That took my December profit to a negative balance. I had worked so hard that year to make sure I made a profit each month (I did miss the mark in March) and it was excruciating for me to look at that negative number each day even though I knew it was the best business decision at that point in my business.
Next I started moving some of my third-year expenses into my second year (it was still December after all). As that negative December profit number got bigger I could feel my anxiety rising. So what did I do next? I spent more money of course. The decision had been made to spend my profit to date so I had to quash my feelings and stick to the plan. I decided to get a booth at the annual Business Expo and there was a note on the application requiring proof of business liability insurance.
“What you talking about Willis?” I work from home; why do I need business liability insurance? There are about a million reasons why - all of them dollars. Now I have an even more “real” business with insurance to protect me if you slip on the ice dropping off a check (use a stamp next time) at my home office or if you do not warn me you are coming and my bad bulldog jumps on you and knocks you over because I did not put him in the kennel and he wants to love you so much it hurts (you).
I started my third year exactly where I started my second year -- with $277.93 in my business account. It would be a depressing thought except:
- I had ten more semi-regular clients than the year before.
- I budgeted regular paychecks for me. I did not work for free my third year!
- I had some online programs that leverage my time which were starting to make a little money.
Although I am a “numbers” person I am not motivated by numbers goals. I am motivated by progress and I made a lot of progress that second year. I considered my business successful even though that profit I spent down that December was less than $10,000 (forget about six figures profit, I did not make it to five -- and then it was zero).
Take an honest look at your business. Are you growing? If you are not (and you want to be), you need an outsider to objectively look at your business. Sometimes you are not ready to get out of your own way and nothing anyone suggests will stick. You know if you really are willing to do the work or if you want it to be “easy”.
I can help you in some aspects of your business and I know coaches who can help you in others so please reach out to me if you need help. I will not try to push my services on you if I do not believe I can help. I want you to be successful even if I am not the one to help you get there.
And if you are progressing in your business… woo hoo! Write down a few of your proudest accomplishments and celebrate. Do not dwell on other people’s definition of success. You choose whether or not you are a success and what that looks like for you.
Until next time…
Have a great day,
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