1. 48 NZB July 2015 nzbusiness.co.nz NZB July 2015 nzbusiness.co.nz 49
There, it’s out in the open. Maybe the reason your
business isn’t doing well financially is you!
There are two clear aspects to being financially
successful:
1. The practical side of money management which
accounts for 20 percent and is a learned skill.
2. Your mindset, or money psychology accounts for the
other 80 percent. This is the part that doesn’t get
talked about very often in the financial world. Sports
people know only too well this rule.
Many of my clients are SME owners. Very often
someone will come to me because they’ve reached a
milestone – their 40th birthday or ten years in business
perhaps. And they realise they’re not quite where they
thought they’d be.
On paper, they’re following the rules and doing
everything right, and yet there’s this niggle that stuff
just isn’t working as well as it should. My job is to
get into their money psychology (money mindset) and
help them to understand their money beliefs and how
this impacts their behavior, both in business and their
private life.
I start by asking a couple of questions:
1. What is your relationship with money?
Before you answer that question, let me make it clear.
Whether you like it or not you have a relationship with
money. That relationship is the longest relationship you
will have. It’s with you for life, so you may as well make it
an enjoyable one.
The good news is, like any relationship you can improve
it; you just need to have a starting point to work from.
Let me give you a couple of examples of answers I have
had to that question to give you an idea of what I mean.
• “I hate money! I hate that I continually worry about it, I
can’t manage it and there is never enough of it. Money
controls my life, it is all I think about!”
• “I love money. I love having money, being able to
choose what I spend my money on and how I invest it.
Money gives me control and power over my life”
These relationships with money are poles apart.
Both statements are from business owners. The second
business is flourishing and in expansion mode, whilst the
first lurches from one financial crisis to another.
2. What does money mean to you?
What’s the first word that pops into your head when you
read that question? Write it down and remember it, as it
is the primary association you have with money and will
impact every financial decision you make.
Let’s look at an example.
What do you think money means to Donald Trump?
Power, control, status, are words that probably come
readily to mind. Now let’s contrast that to Mother
Managing your business and personal finances should be
easy, shouldn’t it? Spend less than you earn, pay yourself
first and don’t forget the taxman; easy peasy.
But if it’s so easy why do so many businesses struggle?
Many small businesses are started by ‘doers’. The
amazing architect, plumber, doctor or personal trainer
goes ‘out on their own’. They are fantastic at their
profession but they don’t know how to run a business.
The customers get the blame; “they don’t pay me on
time”, or it’s the IRD; “I’m paying too much tax” or “I hate
doing the paperwork.”
Business owners haven’t been taught financial
management, so that must be why they strug-gle. Is it?
You can find solutions to all these problems by hiring
or outsourcing to find the skills that you need but don’t
have in your business. But even if you get the best team
in place, with the best advisors, many businesses still
struggle financially. Why?
Maybe we need to look a little closer to home. Who’s
that person we see every morning in the mirror when
we brush our teeth? No, I don’t mean your partner or the
family cat. It’s you!
Is your relationship with money sabotaging your business success?
Lynda Moore offers some insightful advice.
Are you a Donald Trump
or Mother Teresa?
HELP DESK
›› Lynda Moore is a practitioner and director
of Money Mentalist International, an
accountant, and has a post grad in
psychology. Having studied with world-
renowned executive coach Dr David
Krueger in the US, Lynda is also
Australasia’s only certified and
licensed New Money Story® mentor.
Email lynda@moneymentalist.com
Teresa. Giving, non-materialistic comes to mind. Money
gave her the ability to help others; to give it away, not
keep it for herself.
If you associate power and status with money, you are
more likely to want a new expensive car as your business
vehicle, often regardless of whether the business can
afford it or not.
There is no right or wrong when it comes to either your
relationship or meaning that you give money. But imagine
what might happen if Donald Trump and Mother Teresa
went into business together, or were in a relationship
together. It could get quite stormy.
When it comes to money 1+1 doesn’t always = 2.
Economic theory assumes we always behave rationally,
whereas in real life, we don’t. Why? Because we attach
emotion to money.
So how do our emotions affect our decision making?
Let’s go back to our car example. Your emotions will
dictate the type of car you drive; how your clients and
competitors will see you. You couldn’t possibly show up to
a client meeting in that old bomb!
Your relationship with money not only impacts your
business but your personal life as well. Your business
may be thriving and your personal financial situation can
be in chaos. In your business you are surrounded by a
team of people to help you, from the person who does
your books, to your banker, accountant and business
coach. But once the money leaves the business you are
on your own. The support network isn’t there and you can
find yourself in strife.
It isn’t only your relationship with money you have to
think about, it is also those that are closest to you. For
example, your bookkeeper or internal accountant should
have the 20 percent practical skills nailed, but what
about their own relationship with money? That is going
to impact on how well they do their job and manage your
business funds.
Being ‘instructed’ on how to handle money is never
going to work in the long run. To make ‘better’ financial
decisions, you need to change your behaviour and
challenge the emotions which prompted that behaviour
in the first place. Then, align your core values and your
beliefs with your financial goals and you really are on your
way to achieving financial satisfaction and independence.