Guest post from Tanya Brockett this month’s featured author from the Verizon Author Series. Tanya is a former adjunct professor of Entrepreneurship and Book Publishing at the University of Virginia; 15-year advocate of and consultant to entrepreneurs; and author of The Loan Solution.
When a small business falls into financial trouble nowadays, what does it do? Loral Langemeier, author of the national bestseller The Millionaire Maker, says we think small and retract. Additionally, because the credit markets have been so adept at increasing our reliance on them, we look to who we can borrow from to get out of the hole. Do you see the flaw? We don’t say, “How can I create more cash to change things?” We ask instead, “where can I borrow from to turn things around?”
We need to shift our money consciousness to start thinking creation rather than just borrowing or trading. We are trading time for money, trading interest fees for money, or trading our first born for money. Though there are times when leveraging ourselves with debt capital makes strategic sense, small businesses should also be thinking of creating cash in multiple ways.
Changing the money mindset
In order to shift our small business mindset from indebtedness to cash creation, it requires a shift in perspective. Many success teachers tell us that if we cannot see our business thriving instead of just surviving, it probably won’t. If we cannot see ourselves being successful and working with great clients/customers who see our value and are willing to pay for it, we won’t.
So the first step in creating Money Solutions for your business starts with you. You have to believe that you have something of value to offer and that you have every likelihood of being successful offering it, or there is no point in continuing to struggle!
In my entrepreneurship classes, I have my students visualize their ideal business and its success. They literally close their eyes and see the clients, the employees, the money flowing in, the products shipping out, and the positive impact that they are having on the community and their customers. I want them to feel what it would feel like to be successful doing what they are passionate about doing. If they can’t see it or feel it now, how will they recognize it when it happens? How will they continue to strive for it when the going gets tough? If they can’t see success now, what is the chance that they will ever make it a reality?
Get on the right path
For those of us in the line of business that makes a difference in the lives of our clients and for whom working is a pleasure, getting in alignment with our true intentions of providing service is a necessary first step. Whether you are a plumber or an accountant or a consultant or a professional speaker, your customer’s needs must be met by the service you provide, or you are wasting your time and your customer’s money. And yours too.
Knowing that we are doing what we set out to do, and recognizing that we must “be in business to make money” in order to continue providing that great product or service for our clients, we should then open our minds to a variety of streams of income, not just those tied to the sales of our primary products or services.
First, review your results
Sometimes we continue to operate under the status quo just because it is the way we have always done it. In this economy, that is simply not good enough. In Jack Canfield’s book, The Success Principles, he shares an equation that states that E + R = O. Simply put, events and our responses to those events, create our results or our outcomes. So, from a business/money perspective, if business is slow and we spend $1,000 on an ad in a news periodical, that only generates $200 worth of business, our outcome is a loss of $800. Yet, because we don’t often measure the results of our business decisions and we figure running ads is what businesses do when they want clients, we run that add four more times, yielding similar results, and lose more than $4,000. We keep responding the same way and get the same or worse results.
If, instead, we recognized that the E (slow sales) was still there, and our original approach (the news print ad) caused us to lose more money, we can change our response for a different outcome. So we change our R (our approach) by choosing to sponsor an event that directly impacts our target customer, and our outcome (O) changes. We pay $5,000 to sponsor an event that leads to $20,000 in additional sales, and our outcome is much improved simply by thinking out of the box and responding to the results. If we look at where we have spent our money and evaluate the return on that investment, we can choose a different path that will lead to different results. If we don’t change our response (R), we have no right to complain about how much money we wasted (or how bad the economy is, etc.).
Know what you want
If you have specific business/financial goals that you want to achieve and you write those goals down and revisit them each day, you are much more likely to achieve those goals. Brian Tracy talks about this very specifically in the book Eat that Frog. Jack Canfield takes that a step further, and offers several success principles for achieving your goals, like applying the “Rule of 5s.” The Rule of 5s means to take five steps or actions towards your goals each day. To do so, you have to know what you want, and have it written down so you can refer to it each day to have a target to shoot for. This includes money for your business.
Knowing what you want is also essential for receiving it. One example I have often given my entrepreneurship students: I can’t write a check to you for “somewhere between $20,000 and $50,000.” I have to know a specific number to write on a check before I can give it to you, so you need to know what that number is so you can tell me!
So after you have analyzed your business results and have established goals for the upcoming fiscal year, be clear on what it is you need to make those goals happen.
Visualize its attainment
As mentioned earlier, if you cannot see yourself achieving a goal, financial or otherwise, you are not as likely to bring it to fruition. So, once you have set a business financial target, you should see yourself successfully achieving it each day until it comes to pass. You’ll be amazed at the actionable ideas that come to mind as you do so.
If you think that visualizing is silly, ask the top Olympic athletes if they see themselves crossing the finish line before they run their races. Ask pro golfers if they see themselves hitting that long putt and winning the match before they play. As Secrets of the Millionaire Mind author T. Harv Eker might say, if you feel stupid doing this, ask yourself: would I rather feel normal/smart and be poor, or would I rather feel stupid and be rich? You decide.
Stay open for something new
We have entered both challenging and exciting times. It is from the depth of recessions that millionaires are born. Necessity is the mother of invention. When challenged with obstacles, view them as opportunities to create new ways of doing things, new ways of making money, and new ways of creating meaningful business relationships. Open your mind to new thought processes and possibilities. Learn to collaborate with others in your industry for the good of all concerned, instead of operating purely on the competitive plane. It is my belief that doing so will offer up to you new opportunities for Money Solutions that you would never have thought of on your own.
[Editor’s note: To win your free copy of The Loan Solution be one of the first 15 people to send an email to firstname.lastname@example.org telling us you’d like a copy of Tanya’s book. Of course, in the email, do share with us how you handle your company’s cash flow.]
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