Written by: Dr. Bonita Parker, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Poor money management has been the cause of more business failures than any other single issue. And it’s no wonder. We aren’t born knowing how to manage money. And the truth of the matter is that most of us aren’t taught how to handle it or develop a positive relationship with it either. We figure it out along the way, after costly mistakes and through much trial and error.
Those same mindset issues and bad habits that wreak havoc in our personal finances can plague our business finances as well if we’re not careful.
Trust me, I know firsthand!
Catching Shiny Object Syndrome
It’s no secret that we love new things! We like to partake in what’s trending and current. I get it—some things are just hard to resist—especially when your friends and colleagues are all jumping on board! New technology, conferences, group coaching programs, and even business models can all have a strong pull, and if you aren’t careful, these shiny objects can quickly distract you from your current goals.
If you find yourself catching shiny object syndrome frequently, try this two-step plan instead:
For “too good to refuse” offers, make a plan for achieving a positive ROI before you purchase. If you cannot find a (realistic) way to make the purchase pay for itself, don’t buy it. Get into the habit of assessing how to monetize the investments that you make and know that it’s okay to pause and think about its benefit.
For exciting new business ideas, create a “someday” list. If you are anything like me, your mind stays turned on and ideas are always coming to you. Jot down your idea and create a basic outline, then get back to the task at hand. Now that great idea won’t be lost, but it also won’t join the ranks of half-finished business plans that litter the internet.
Falling for the Sunk Costs Fallacy
If you’ve ever said to yourself, “I’m not using this subscription, but I can’t give it up! I’m still paying the launch price and now it’s much more expensive!” Then you’ve fallen for the sunk costs fallacy.
This common mistake is famous among economists, and we all fall victim to it from time to time. Simply put, the sunk costs fallacy is what makes us justify investing more money or time in something—even though we’re not seeing results—because we’ve already spent so much. It’s what encourages us to repair the car one more time (after all, you just put new tires on it), eat a meal we don’t enjoy (simply because you’ve paid for it), and yes, continue to pay for tools and resources you’re not using.
Part of my entrepreneurial success strategy was to conduct quarterly dumps that saved me from wasting tons of money on things that no longer served me well in my business. And you should too! Take time to examine your current business expenses. What are you paying for month after month that you’re not using? What can you get rid of that is no longer assisting with conversion? Either make a plan to put them to work for you, or cancel them. Stop falling for the sunk costs fallacy.
Too Much Penny Pinching
You thought this was all going to be about overspending, didn’t you? Here’s the kicker: Spending too little is just as bad for business as spending too much. Shocked at all?
When you’re constantly on the lookout for free and low-cost tools or working 16-hour days because you “can’t afford to outsource,” you’re not doing your business any favors. Sure, it looks like you’re bootstrapping and working really hard to make something from nothing, but what you’re really doing is digging yourself a hole that will be nearly impossible to climb out of. Not only that, but you’re reinforcing a scarcity mindset that will continue to plague you for years if you let it.
Rather than pinching pennies, learn to spend money strategically. Buy what you need, when you need it. Invest in top-quality products and programs rather than settling for the low-ticket, half-baked plans. Just like quality clothes, cars, and furniture, quality services and software last longer and work better. And unlike that car, good quality business tools will pay for themselves.
Need a mindset reset to rebuild your relationship with money, I can help!
To know more about me and my work, please visit my website and follow me on Facebook, Instagram, and LinkedIn!
Dr. Bonita Parker, Executive Contributor Brainz Magazine
Dr. Bonita Parker is an experienced and certified Master Life Coach, CEO Success Coach, Publisher, and 3x international bestselling author who is the driving force behind the success of Bonita Parker Enterprises, a multifaceted corporation that strategizes with new and aspiring business leaders to identify their core strengths, build out their individual success blueprint and provide resources that get excellent and proven results in their business.
Dr. Bonita knows firsthand the importance that authenticity and transparency can have when building a thriving business and has dedicated her time to helping women break through emotional barriers and mental blockages that hinder their success. Under the tutelage of her Dream Achievers University (DAU), a virtual certification academy that focuses on the study of life coaching. she has helped a multitude of clients across a wide range of personal development sectors step into the light of entrepreneurship and build successful brands using her personal Radical Success Brilliance Model. Using this interactive step-by-step methodology, clients are able to break free from invisible enemies, shift their mindset and align with their optimal success path.
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