New Year … New Money Mindset

As we begin the transition from one year to the next, we inevitably find ourselves looking at things with a renewed perspective. We tend to think about both all that we are grateful for and all that can be improved upon. And for many business owners, one area of improvement relates to their mindset surrounding money. With another tax season just on the horizon, it is even more of a priority to shift the historically negative money mindset of business owners and begin to have the conversations that matter most when it comes to their financials.

As someone who is deeply passionate about helping business owners understand how to make their money work for them, I have found that there are two primary notions surrounding the mindset of money. First, there is the notion of shifting from a scarcity outlook to one of abundance. And second, there is the notion of shifting the conversations about money to focus on the data that matters most.

Shifting from Scarcity to Abundance

Money, and nearly all issues surrounding it, often carries a negative connotation. But it doesn’t have to. It is not merely thinking about accumulating wealth or feeling greedy for wanting more of it, but about the positive impacts that can be made when we have money. At those times. we increase our capacity to give back, to do more, to employ more, and to contribute to charitable causes and the communities around us. There is absolutely no shame in acknowledging the role of money in these pursuits. Yet, far too many sadly get hung up on sentiments such as—I will never have enough. I don’t deserve more. This must change.

Breaking this long-standing taboo, particularly for women, involves challenging societal norms around discussing money openly. Many of us were raised with ingrained beliefs about money and secrecy. We were taught that you simply don’t talk about financial matters to others—not about what you’re making, what you should be making, what your business is bringing in, how many expenses you have—it was all very hush-hush. But it shouldn’t be. And we are long overdue to recognize and question these money narratives that, over the decades, have created more harm than good.

The transformation begins by shifting the tone and direction of these conversations. Money should not be viewed as a source of shame or secrecy but rather, as a tool that can be harnessed for positive change and growth. Instead of shying away from financial discussions, business owners must persistently engage in them. They must get comfortable being uncomfortable and acknowledge the embarrassment in recognizing their need for financial assistance. Over time, they will get more comfortable navigating these essential dialogues.

Shifting to the Right Data and Conversations

In today’s information age, most business owners are inundated with data, making it crucial to decide what information holds the most significance. The key lies in identifying the data that is paramount in measuring success. Yet, many business owners focus on the wrong definition of “success” and as such, the wrong data. In this way, even when they are talking about money, they’re talking about the wrong money. For example, business owners inevitably talk about their top line number. It’s understandable—they’re proud of reaching certain milestones. However, what they have to realize is that it doesn’t matter if they’re bringing in $1,000,000 in revenue if their expenses are $1,500,000. If they truly don’t see any of that money, the amount is irrelevant in many respects.

The more appropriate question for them to consider here is—Am I profitable? A positive response to that question is what will change the trajectory of their business, not how much revenue they brought in. This all-too-common overemphasis on the top-line number merely clouds the perspective of the business owner. Rather than being captivated by these impressive figures, it’s far more sensible to redirect the focus toward sustainable profitability—the true driver of long-term business success.

Further, the right data allows businesses to implement a robust KPI system that can demonstrate the metrics that matter most (i.e., profitability) to make better business decisions grounded in reliable data. This includes preparing for the unexpected—something in which the Covid-19 pandemic provided a crucial lesson. If we learned anything, let it be a lesson in preparation, which will always begin with financials.

By examining the right questions, based on the right financial indicators, business owners can foster a more meaningful dialogue about the health and prosperity of the business. For example, the following questions should be considered: What is it that I want? What type of lifestyle do I desire? Does my business align with that vision? When armed with the data the answers to these questions reveal, they gain the ability not only to understand what’s behind the numbers today but also to proactively anticipate and utilize the data for informed decision-making tomorrow. As we navigate an unpredictable business landscape, the importance of proactive financial planning cannot be overstated. It is through a comprehensive grasp of financials that business owners can strengthen their businesses, ensuring not only survival but also sustainable growth. But it all starts with shifting the money mindset!

Happy Holidays and Happy New Year!

At Agile Planners, we take care of the numbers, so you can sleep at night. We provide strategic guidance and outsourced CFO services to companies of all sizes. We can help provide the strategy your organization needs for the growth you want. We understand that no two organizations are the same. And with our experience and financial knowledge, we can help develop the right strategic plan for your business to grow and reach its goals. Simply, we’ll be your trusted partner, so you can focus on running your organization. Contact us today to learn more about how we can help.

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