When it comes to improving your finances as a business owner, your money mindset sets the foundation for your success or failure. The truth is, the way you think about money and what you believe about money determines your relationship with it.
Your relationship with money or your money story can have a huge impact on the financial decisions you make in your business. If your relationship with money is a struggle, you’re going to struggle to set the right pricing strategy, manage your money, and even scale your business.
Your money making mentality says everything about your business. And if you’re looking to change your mindset about money, we first need to explore what your relationship with money looks like.
So how do you start working on changing your money mindset? I wish there was a one size fits all answer but shifting your mindset around money takes time and self awareness. Even though I’m a CFO, I still work on changing my money mindset every day.
There are a few things you can do to help break the cycle, shift your mindset, and move your business forward that I’ve found helpful with clients and teach in my small business finance course, Not Rocket Finance.
What Is Money Mindset & Why is it Important?
To start, a money mindset is your unique beliefs about money, how you interact with money, how you spend money, and your overall handling of money. The truth is, talking about money is hard for almost anyone, including me! And my job is literally talking about money.
A lot of business owners struggle with talking about money because they often lack confidence in how they’re handling their finances. Whether your books are in great shape or you don’t even have an accounting system in place, I’m willing to bet that you struggle with your thought process around money like most entrepreneurs. Maybe you even feel ashamed about your business finances!
Some of the things you tell yourself about money or the things you believe about money can dramatically impact your business or create limitations. For instance, if you’re worried about money disappearing because those beliefs were ingrained in childhood, you may not take the financial risks required to grow your business.
When you master your money mindset, you can change your behavior to reach your goals and how you get there. When your mindset about money shifts, everything changes about how your business looks, how it’s run, and how profitable it is.
Start By Exploring Your History With Money
A lot of how we deal with money is impacted by watching our parents or others around us deal with money. How money was handled in our childhood transfers over into our adult lives.
Were your parents penny pinchers? Were they big savers? Did they ever talk to you about finances? How did they react when you asked for money from them growing up?
Because our caregivers are the source of money when we’re children, our perspective about money and how we interact with money has a lot to do with those early interactions. These early interactions impact how you interact with money today and the decisions you make in your business about money.
Breaking the cycle our families started can feel impossible, especially if your goal is to improve the way you think about and handle money. Getting rid of money blocks all comes down to changing our mindsets on money.
It all starts with gaining awareness of your own perspective of money. Thinking about how your parents and family dealt with money and what that taught you about how to deal with money can help reveal a lot about your own money mindset.
One of my favorite exercises is to think about your first memory of money—what is it? What does it tell you about how you view money in your business? It’s time to start unraveling those stories and reframing them as an adult to heal your relationship with money.
Decide How Much is Enough Money for You
It’s almost impossible to talk about money mindset without acknowledging that our capitalist world impacts how we think about money. Unfortunately, we live in a world where we’re taught to prioritize profit over people. And a lot of that directly translates to how we value people—and even ourselves.
We usually default to one of two money mindsets: scarcity or abundance. We live in a world where the default assumptions are that first, that there's not enough money for everyone, and second, that more money is better. We also tie a lot of our judgments about the value of a person to how much money they have.
But, if we’re really honest with ourselves, we can realize that there is a point where we have enough money and that money isn’t an indicator of the value of our contributions or ourselves. While the point of enough money is different for everyone, there’s a level of financial success where we can feel happy, rewarded, and secure. And yet, all the same, we feel that we have to work harder, hustle more, make more money—because that goal post of success keeps moving.
Where is your final destination for money? How much is actually enough for you? It's a personal definition, a personal feeling, a personal benchmark. Maybe it's a specific number, maybe it's just a feeling.
Enough is where you plant your goal posts, so they stop moving.
Translating Money Mindset into Your Ideal Business
Figuring out where enough is for you can be a very powerful tool in helping you evaluate the choices you make around your finances and the growth of your business. Based on where the point of enough is for you, you can start to evaluate what your business brings in, how it functions, and how you participate in it.
- How much does your ideal business make?
- How much are you involved in that business?
- How do your values about money translate into how your business is run?
There’s hundreds of directions you can take your business and each is a reflection of your money mindset and relationship with money. For example, if you believe that part of enough for you is not working more than a few hours a day, the way you design your business is very different than someone who wants to be more involved on the day to day in their business.
When it comes to making decisions, you may be wondering what’s right or wrong. The truth is, there’s no one clear answer. The spectrum for decision making is long, but what you can control is how you feel about those decisions.
It all goes back to your money mindset, again, and letting go of guilt and shame about how your business should look to design a business the way you want.
Improve Your Small Business Financial Skills
Another part of why you probably struggle with your money mindset is you’ve never been taught the basics of financial management. As a business owner, you’ve maybe even tried to get a handle on learning the basics of small business finances but most of it was overwhelming and confusing.
One of the other things you can do to improve your relationship with money is learn about how to manage it in a way that makes sense to you. Instead of feeling guilty or ashamed that you don’t understand accountant-speak, finding a way to learn about managing small business finances that’s actionable is a much better path.
That’s why I created Not Rocket Finance, an actionable small business finance course that covers how to change your money mindset and get the data and knowledge you need to run your business finances. I teach the essentials for money management and help you explore how to change your money mindset in my course.
Not ready for a course yet? You can start by checking your small business financial health and seeing how you’re doing so far. How well does your business reflect your newfound money mindset?
I have a free download to help you do a small business financial health check and get an idea of what financial shape your business is in right now. Once you know your financial health, you can assess areas of improvement and figure out what decisions you need to make to start building your ideal business and putting your new money mindset to use.