Business owners, listen up! Today we're sharing three of the biggest mistakes entrepreneurs make trying to save money. We hope giving this article a read will help save you from the fallout of making these mistakes yourself.
Running a business is really freaking hard. And if you’ve stepped out as the captain of your own destiny, you understand the mix of excitement, vision, fear, loneliness, and frustration that comes with being your own boss.
Money can be tight when it all depends on you, especially at first. When things get tight, people get emotional about their money, which leads to bad decisions. Those decisions create choices born from a scarcity mindset, and sewing into a scarcity mindset will yield more of a scarcity mindset later.
So when someone giving it their all to pay their bills each month gets emotional about their time and money, here are some of the biggest, most common mistakes entrepreneurs make trying to save money.
(Wondering if you really need to keep all of your receipts? Take a look at this post to find out)
Getting a return takes time. When things are lean, or you’re not yet getting the results you want, it’s easy to make brash decisions to course correct. When you change things too quickly or too often, you forsake two things:
Any compelling data to support what’s working and what’s not beyond your “gut feelings.
The opportunity to fine-tune how to make your efforts actually pay off.
Besides that, the opportunity cost of change can be tremendous—even just the energy you expend to set something new up versus steadily plodding and to learn how and what to adjust.
Imagine the impact of working your business systematically for a year and having really strong, precise data about what ratios exist in your business. You can make small and calculated course corrections based on proven and tracked data. You can set goals and actually hit them because you know how to make informed decisions.
This works with your finances, sales, marketing, and operations. That’s pretty much your entire business.
Did you know outsourcing your bookkeeping is usually the safer option over doing it yourself? Learn more about that here. It also emphasizes the importance of not feeling like you need to do everything yourself.
Let's talk more about that next.
Maybe your business is brand new, and you just don’t have cash flow yet—okay, you should probably do everything yourself. But aside from selling new deals and keeping your desk clean, is there a ton to do yet?
So, if you’re past that situation, don’t make a decision that saves you $200 a month when your time is worth $500 an hour.
You might struggle with the concept of your time being worth $500 an hour as a small business owner. Don’t big-time defense attorneys charge that much??
Even if it’s not that much yet, it’s probably worth more than you think. What happens if you do something worth $20 an hour? What are you NOT doing during that time that could be earning—or planting seeds for you to earn $1,000 per hour later?
Warren Buffet said, “The difference between successful people and very successful people is that very successful people say no to almost everything.” You’re losing lots of money in your business if you’re doing things other people could do (or learn to do) just as well.
Pretend that your time is worth $500/hour for a week and ruthlessly delegate or omit everything not worth your time. Pay attention to how that makes you feel and your outlook on the future of your business.
Do that for longer and pay attention to how that impacts your bottom line.
(There's a LOT you can delegate. But this post covers the things you shouldn't delegate to an assistant, including setting an example for your team)
We get it. You’re scrambling. Doctor bills are past due. Your family has an obnoxious habit of eating every day. Tuition is due in 60 days. Diapers are really expensive. YOU’VE GOT TO MAKE IT HAPPEN.
Why did you go into business for yourself, to begin with? Was it to have the flexibility and freedom of being your own boss? Or was it to live a desperate existence that consumes the younger years of your kids’ lives you will never get back?
Remember, you’re in charge. You’re in charge of your calendar. You’re in charge of your customer agreements and engagements. YOU are the CEO of your business—even if your desk is in your spare bedroom.
You don’t have to do something just because someone asks and they’re paying you money.
Think of it as an opportunity to upsell.
Consider that you’re a respectable business person who knows the value you bring to someone and act out of that conviction. Odds are, if you act this way, you’ll make more money, and people will respect your boundaries.
Have the courage to hold YOURSELF to that same standard when your business asks something of you, and go get ice cream with the kids or binge-watch a couple of hours of Netflix with your spouse. Drink a beer.
Bottom line: what you’ve chosen is tough. It’s costly but can yield a significant return that goes far beyond a bank account balance when you take ownership over your direction.
Enjoy the freedom you choose by running your own business.
We can help! Click here to learn more about the bookkeeping services we offer that make entrepreneurial life smoother for you.
This article was updated in 2022 just for you.