Have you lost sight of why you became self employed in the first place? Are you constantly worried about paying bills in your business? Do you feel like you are always accepting the wrong type of work just to make ends meet?
Then you may have Entrepreneurial Financial Stress.
And trust me when I say you are not alone.
What is Entrepreneurial Financial Stress
According to mentalhealth.org stress is our body’s response to pressures from a situation or life event. The response is generally one of ‘flight or fight’ depending on which is appropriate or beneficial to the situation. However when our bodies encounter stress repeatedly the pressure can make us feel overwhelmed or unable to cope which can lead to poor judgement and poor decision making.
Whilst being an entrepreneur definitely has its plus points, it’s stressful. There is constant pressure to manage sales, cashflow and to find innovative solutions to grow your business on a budget.
How Entrepreneurial Financial Stress Can Damage Your Business
Entrepreneurial financial stress can affect your business as a whole. At the heart of Entrepreneurial Financial Stress is fear.
A fear of failure, having to go back to the 9 till 5 grind or brought about by a simple lack of understanding.
With this fear comes bad decision making which only adds to financial stress.
I’ve seen business owners who, out of desperation for cash, low ball on bids just to win a job with little regard for margins and the amount of work involved. Or the entrepreneurs whose spending is so out of control that they bury their head in the sand about the true debts of their business but lie awake at night stressing about what to do next.
As with any form of stress, the best way to tackle it is face on and to take control of it.
How to Combat Entrepreneurial Financial Stress
Here are 5 simple, easy to do ideas to combat entrepreneurial financial stress you can implement yourself quickly to take back control.
1. Get Real
Be honest about what is causing your financial stress whether it is overspending, not focusing enough on sales or being brutally honest about whether your business actually makes money.
Get help from a friend of family member if you have someone you can trust and confide in. Often problems can be easily sorted out but it takes a different perspective to get to the root of them.
2. Create a budget
One of the simplest way to take control of your business finances is to create a business budget.
A budget is a written plan of how you will spend money and what you expect will come in.
It’s an instant reality check and allows you to manage your money rather than letting it manage you.
3. Make A Regular Commitment to Your Business Finances
It’s easy to ignore your business finances as you prioritize client work. But this may result in spiralling spending, poor cash flow, or revenue dips, (I’m trying to think of more ways to illustrate out of control finances) causing you additional stress.
Set aside 1 – 2 hours EVERY week and commit to spending it looking at your business finances. You may need to invest some up front time to get organised and create a system, but it will reap you so much time in the future.
Staying on top of things will put you back in control alleviating that feeling of financial stress.
4. Set up a cash flow forecast
Put simply a cash flow forecast is a summary of all the ins and outs of your business.
It will help pre-warn you of times when cash may be tight giving you the opportunity to make plans to cover the deficit, like arranging an overdraft or short term loan.
Knowing when difficult times are coming and planning for them avoids the need to firefight problems and alleviate the financial stress associated with them.
5. Get Some Help
You went into business to sell a product or service you are passionate about, not to be an accountant!
If you’re struggling to make heads or tails of your business finances then maybe it’s time to reach out for some help.
My Business Hub contains all the templates and guides you need manage your business finances.
And don’t forget you can find me in my facebook group every day sharing more useful advice to simplify business finances and help you grow a profitable business.