Growing up, you were probably surrounded by talks and different beliefs about money. If that has confused you, don’t worry, you are not the only one. Unless you were born with a silver spoon in your mouth, chances are you will have to work for your money. And that is perfectly fine too! But, while some people develop a healthy and positive relationship with money throughout their lifetime, others struggle with a negative money mindset that is causing them constant financial stress.
However, just as a growth mindset will allow you to think big and reach your goals, a money mindset will help you make the right financial decisions for your business to grow and see success.
Here we talk about 3 ways to shift your money mindset so there will be nothing holding back your business growth.
Know your worth
Don’t be afraid to know your worth and own it. This could be a little challenging if you are just starting up, as you are not familiar with the business and your clients. But even if you don’t feel confident about it, know your worth, own it, and don’t hold back from showing it. You will see that even with higher rates, you can get clients that will appreciate your work.
Did you know that selling yourself short will only attract cheaper clients and scare away high-end clients? True. High-end clients immediately get put off by low prices. Why? Because they know from experience that cheap prices mean terrible service and bad client experience. In other words, they are pretty familiar with the concept of “you get what you pay for.”
Your mission is to shift that money mindset. Start aiming towards clients who are looking for excellent service, an outstanding client experience, and are willing to pay for it. Because you are worth it, and you deserve it!
Cash flow
Don’t be scared to talk money with clients. And in particular, set your payment terms to suit you and your business cash flow needs. Remember, cash flow is the lifeblood of any business, so it’s crucial you get it right.
But before you negotiate payment terms, it’s crucial you check your cash flow position. This means that you need to do an analysis of the net working capital. Of course, every successful businessman and businesswoman knows the importance of knowing your cash flow, profit, and petty cash. The more information you have on your capital, the more control you have over negotiating the payment terms.
For more information about cash flow, invoicing, and having the right processes in place, read our blog here.
Protecting your business and your business relationships
Avoid the dreaded chasing for overdue invoices with contracts. Instead, get paid upfront, charge interest on overdue amounts. Also chase overdue invoices as soon as possible, preferably by talking to the client over the phone so they can’t avoid the issue and ignore you.
To ensure timely payment, practice the following:
- Email friendly reminders and don’t wait until the payment is overdue
- Create a payment policy with clear payment terms
- Let the client know upfront that if payment is overdue, there will be an interest charge
- Request payment upfront or a deposit
- Ensure you have a master service agreement in place before which sets out all details
- Maintain a good client relationship
Do your research if a client who owes you money has ghosted you. If they are a limited company, check Companies House to see if there’s anything alarming on there that leads you to believe the company may be experiencing financial difficulties.
In conclusion, a clear understanding of your business’s financial well-being and that of your client, combined with a positive money mindset, will help you better control the financial aspect of your business. However, if you are still not sure how shifting your money mindset can help your business growth, don’t hesitate to contact us.