Sometimes it feels like all we face is turmoil. And this feeling is not restricted to those Salt Lake County businesses who survive “month-to-month”.
Even the best-capitalized among us can get trapped by the ever-increasing cycle of impending doom.
This is especially true if we follow all the Facebook rabbit trails, or shiny object “gurus” — it seems like much of the media is perversely incentivized to keep us discontent.
I have spoken of this before.
But it’s not just the media.
You see, I sit down every week with Salt Lake County business owners across a wide spectrum of success, and sometimes I notice something interesting, even from those with great resources: “poor” thinking.
With all of the seeming turmoil, it might be a temptation for my wealthy business owner clients and friends to succumb to this kind of wrong thinking — the kind of thinking which they successfully avoided in order to attain the level of success they’ve achieved.
So I thought it appropriate to put together a small series on “right thinking”, when it comes to your resources, and your business. It may be a bit controversial, but I do hope you receive it in the spirit with which I write…
(And, as usual, I’d love your thoughts.)
How Money Works For Salt Lake County Business Owners (Part 1)
“Life is not a matter of holding good cards, but of playing a poor hand well.” -Robert Louis Stevenson
In my line of work, I get to have deep and meaningful conversations with business owners about the things which they most care about. I LOVE those conversations, and I believe that understanding these deeper passions is “the only way to fly” when it comes to financial work of any kind (be it tax, or otherwise).
Now, as I do so, I also run into people’s attitudes about their wealth.
I’ve made an unintentional — but close — study, over the years, of how money works, and just what it is exactly that propels certain business owners into greater and greater quantities of resources … and also what brings them down.
You see, sometimes the very successful in business begin to act like they’re poor.
It’s the beginning of a bad problem.
You may have resources NOW, but are you …
… spending money on things you really don’t need?
I’m sure we’ve all got one of those friends who just loves to spend money, and buys things just to say they have them. The newest software arrived on the marketplace, and it might save their team 30 minutes? They buy it, even though they already have a perfectly acceptable solution. A new piece of equipment came out with more features than their current one? They buy one so they can say they have the newest and latest technology.
That may be fine for a certain amount of time, but there is something deeper happening in the heart there, which, if left unchecked, can signal a decline in motivation or focus. Because it starts with the software … but where does it end?
… ignorant about where your money is going?
Far too often, people who are broke find themselves short because they’ve tracked their monthly cash flow when things were small … but now that they’ve grown a little, their small expenses are adding up to consume everything they bring in. They really need to get a better system for cash controls, and signaling to themselves (and/or their employees) when they should slow down the spending.
But the newly-successful business owners sometimes begin to believe that they’re immune to such proletarian concerns, and allow the same bad habit to encroach into their accounts.
Of course, the opposite can also be the case. (E.g., are you checking your accounts every day? That’s also a problem.)
… blaming your problems on outside forces?
People don’t like to see themselves as the source of their problems. And as a group, business owners can often be very smart about this — at least in the beginning.
Taking that “first entrepreneurial step” feels like a big deal, and it is. But a few years down the road, and far too often they will ever-so-subtly begin to shift blame when they should be looking at themselves. They blame their employees, customers and the government. They believe that “the little guy just can’t get ahead”.
Are you doing the same thing? “It’s the market’s fault!”, “My financial advisor screwed me over!”, etc., etc. Again, these are signals of a deeper problem.
… more interested in having others think you are successful, than actually being successful?
Business owners in Salt Lake County who are always broke like to be seen as wealthy and successful, even if looking that way to others means that they’re actually forfeiting the possibility of being profitable and successful in reality.
Are you pumping your resources into an image? Are you “investing” in items which, really, are more about how people will see you and your business than how they will help your business’ bottom line?
… not planning ahead?
For the always-strapped business owners, money is short because they haven’t set up an actual business budget, and a retained earnings and spending plan. When they set up a monthly cash flow forecast, and know exactly what they’re going to spend in what categories — they’ll do much better.
If you fail to plan, you can plan to fail, right?
Again, many resources can lead to laziness in this area. Don’t let up with it.
I will have more to say on this and other topics next week.
But if this sparked something in your thinking, shoot me back an email to this strategy note through the ‘email us’ button at the top of the page. Let’s make a real plan for long-term financial health for your business.
Feel very free to forward this article to a Salt Lake County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Salt Lake County families and business owners.
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