Q: What tools, strategies and advice do you provide your clients to help them keep afloat?
LH: As a business owner, particularly in a skilled trade, it goes without saying that you need to know how to do a great job, on time, on budget and with the specific skills your clients require. But you also really need to understand ‘your numbers’, your financial fundamentals. You need to understand what all of your current and future bills are, and what percentage of an increase you need to grow.
This is one area that outsourcing can really come in handy. If you don’t know exactly what you are spending, what spending habits you are forming and what the percentages are over time, you are running your business with your eyes closed.
Once you have found the financial support you trust they will take a look at your current spending.
Then the next step is to make a realistic budget, your income versus all of your expenses down to the cent. This might reveal where you are over-extending yourself now, where you can cut back, and allow investment and future growth. Much like your mindset, this also requires some understanding of the emotional relationship you can have with money. Spending makes us feel good, right? But setting an unrealistic budget that we can’t keep to will result in lack of motivation.
So, turn your understanding of your finances into a chance to get a joyous little happy hit when you discover a way to save, so you can redirect your money elsewhere.
Then next step is all about investment strategies, such as equipment upgrades or training – things that will make your business move forward in the future.
Q: You speak about a ‘Money Mindset’ what does that mean?
LH: As a small business owner, you often work from day to day, money coming in and going out at a fast pace. Cash flow is often tight – or worse almost non-existent.
One thing you do have the power to control is your mindset when it comes to money; yes, your emotional status quo about your finances. Now, this takes quite an adjustment for a lot of people, so bear with me.
If you are in a constant state of holding your breath, and in fear that you will ultimately be short of money, you will be afraid to look into opportunities that may benefit your business in the long run. In a way, you are afraid to spend money or make a mistake, which limits your ability to see things through open eyes.
What you should have is an ‘abundance mindset’, which is really about having an open mind. It doesn’t mean taking un-researched risks or excessive extravagance, but being able to listen to what is out there that might help to grow or support your present and future business. This could be, for example, spending money on your website, looking at innovative methods or tools, investment in expanding into areas that support the work you currently do as your core offering, attending courses or hiring consultants.
A negative mindset can result in passionate staff, industry colleagues or advisors feeling that they can’t offer you their insights or suggestions because they will be shut down. In turn they stop coming to you with ideas, conversations that inspire won’t naturally flow, and the spiral continues, leaving you feeling even more alone and in a state of impending doom.
If all you do is focus on scarcity, or what you ‘don’t have’ then you are creating a negative space that is difficult to operate out of.
I have so many examples of clients who have come to see me feeling they lack confidence in running their business, and finances. One of my favourite moments is when I see them again months later and they feel positive and excited for the future.
Q: Should small business operators see themselves as entrepreneurs?
LH: Seeing yourself as an entrepreneur is an important shift that can also help you to grow. Above we discussed your money mindset, changing your focus on the lack of funds to potential abundance. The next step is to see yourself as progressive, an innovator and in a way a thoughtful member of the industry you work with. A leader.
By seeing yourself as not just a ‘business owner’ but labelling yourself as a successful business owner and an entrepreneur is a great place to start.
We all have the potential to be creative, to have new ideas and do things a little differently, to specialise and become well- known as an expert. Those who are considered ‘entrepreneurs’ will often see themselves in that light before anyone else does. They are principally known to be open-minded and on the lookout for new ideas and opportunities, while keeping a firm eye on their core practice.
Having a business is not so much about making deals and money, but how it can also make you happy – providing you with a lifestyle for yourself and your family.