Busting 5 myths about money management and business ownership.
It’s about time that we bust some myths.
My mind is blown, day in and day out, by the amount of myths I hear on calls with business owners.
There are so many beliefs, stories, fables and superstitions that float around among business owners; maybe they’ve come from the advice of the previous generation, or from people who maybe don’t know any better, or even from the back of a cereal box, but I am here to bust them all.
Let’s dive in, shall we?
Myth #1: It takes two years of business before you can pay yourself.
Like, what?! This is absolutely untrue for the majority of businesses.
For a very small portion of businesses (scalable startups and product businesses, manufacturing and large scale retail, for example) this could be the case, but most businesses should be able to generate a salary for the founder within the first six months.
This myth is causing so many small business owners to keep trying to push through with an unprofitable business model because they accept that this is just the truth. It is not.
The truth is that with the right business model, pricing and money management skills you can pay yourself in the first year of business.
Myth #2: Once you’re making money in your business you can then invest in learning to manage it (or outsource this).
Another one that is completely untrue. You wouldn’t wait to be able to cook the perfect soufflé before you invest in a cooking class, would you? That doesn’t make any sense.
It is the same idea; waiting until you’re making a great living before working out how to manage your money is just not a good idea. It’s backwards.
Learning to manage and organise your money is how you will make more of it. Let’s learn to walk before we run, shall we?
Myth #3: You need to reinvest your profits to make your business successful
Reinvesting all of your profits is code for making no profits, so this one is a no bueno. We are in business to make a profit, and when we reinvest it all back into business-as-usual expenses, we are not a profitable business.
Profit is a vital part of building a successful business. It’s what allows you to make investments in things that will change your business, pay yourself a bonus and build a rainy day account.
Myth #4: Profit is a dirty word.
The word “profit” is about as dirty as a brand new car (hint: it isn’t).
A profitable business is one with happy customers, a happy team and a business owner who knows this is a marathon and not a sprint. Profit is what you need to create an impact, build freedom into your life and take time off when you want to.
There is nothing dirty about the smiles that profit puts on everyone’s faces.
Myth #5: Manifesting and gut instinct are how I will succeed
Big nope.
I am a big believer in manifesting; it is amazing, but it only works when you actually have clarity about what you want. You can’t manifest something vague. Gut instinct, which is also a great thing to have, is sometimes actually just anxiety, or fear, or recklessness.
When we combine business strategy and solid financial mapping WITH manifestation practices and our intuitions? That’s when things start to happen.
I know that my feelings about these myths might ruffle some feathers, but that is exactly what I want to do. As long as these ideas are still floating around, there will be people believing and following them, and I am on the mission to break them out of it.
If you were a believer of these myths (thankful you’re here!), or think you could benefit from learning from a Chartered Accountant with 23 years of experience working with small business owners and their money, I’d love if you sent me a message so we can chat.