5 Cash Flow Myths Holding Female Entrepreneurs Back [Based on 25 1:1 Interviews]
To help my tribe better, In January 2020, I set out to interview 100 female entrepreneurs to find out their pain points and their biggest challenges so that I can actively help them.
While talking to these entrepreneurs across geographies and niches over the past 10 months, I also found that they believed in cash flow myths that held them back.
In this article, I am sharing FIVE such cash flow myths that hold female entrepreneurs back, with the hopes that it will help you get over them.
So, if you want to get unstuck and grow your business and your personal income, continue reading.
5 Cash Flow Myths Holding Female Entrepreneurs Back
Let’s start with the first myth.
Myth 1 | I Just Need to Make More, Sell More and I Will Be Okay
This is what a client told me,
“Shishir, I just need to get more clients and make more sales and I will be okay.”
There’s no point in doing doing doing and at the end of the day, and having nothing to show for it. Because business is more about keeping money rather than making money. Obviously, you can only keep money, when you have made it in first.
What I have found that most entrepreneurs do not clearly know what happens between when money comes into their business and when it finally lands in their bank account.
They think that if the money has come in business, then some of it will get into their personal bank account.
It does not work like that.
It is not uncommon for entrepreneurs to work hard and servicing the customers well, at the month-end, without much cash for themselves.
So, don’t get hung up on top-line revenue. It doesn’t mean anything if you are potentially struggling to pay your staff, tax, and even yourself.
Myth 2 | Money Is the By-Product of What I Do
During my interviews with female entrepreneurs, one of the questions I asked them was:
“What does money mean to you?”
Some said it gave them freedom, a choice, or a tool to have financial independence.
Others said it was a necessity and it helped them provide better for their son, daughter, or family.
There were also those who said that money was a by-product of what they did and did not focus on the money side of the business. That they wanted to focus on serving their clients better, make a positive impact. Because when they did that money came as a byproduct.
All of them are great answers and reasons, and show good intention.
Business can be a vehicle to pursue your dreams, achieve freedom, support those you love and to make an impact but it can only happen if you remain in the business long enough.
You ensure the longevity of your business by ensuring you have healthy cash flow. Remember 82% of businesses fail due to poor management of cash flow. PERIOD.
You can have a massive social media presence, make fantastic sales and profit and still yet go out of business, because of cash flow problems.
So pay attention to cash flow in your business.
I believe business is a long term game like a marathon. It requires stamina as well as the skill to win. Cash flow or money is the stamina that keeps you going in business.
So I believe it is not the by-product of what you do. It’s a tool/resource, and energy for you to invest in the causes you care about, to make the biggest impact. So instead, improve the relationship with the money aspect of the business and your cash flow will improve in your business.
Myth 3 | No One Taught Me How to Manage Money so I Don’t Know to Do That.
You learn either by education or experience or both. You have to have at least one of them.
We didn’t learn how to walk before we were born.
How many times, have we tried to stand on our two feet, let alone be able to walk.
It’s a process.
So when you say, I was not taught how to manage money, it means you never tried to learn to manage money. In the 21st century there is no excuse for not learning whatever you want to learn because some of the world’s best learning is just a click away.
And, you can’t expect to become an expert just by blinking your eyes. We don’t become financially savvy entrepreneurs overnight. You have to take baby steps first before you can walk or run. It’s a process.
Mark Cuban said in one of his interviews, “If you’re going to have and run a business if you don’t understand accounting you’re already behind.”
This interviewer asked him, “Do you think you need college to learn that?”
He replied, “If you’re so self-motivated that you can take an online course in accounting and teach yourself everything you’re way ahead of the game.”
Even after 17 years of helping entrepreneurs with the money side of the business, I like to call myself a passionate student of the subject rather than an expert, who is always willing to learn, try new things, learn from mistakes, put my blood/sweat/tears everything into it and become a better financially savvy entrepreneur.
How about you?
Myth 4 | Numbers in the Business Don’t Matter Much, Because They Are a Result of What Happened in My Business.
I was talking to one of my friends, a savvy digital marketer and he said to me:
“Shishir, how does going through the numbers help me in my business. Isn’t this a reactionary task?”
Here’s the thing.
Numbers do not form in a vacuum. They are a result of your decisions, which turn into actions and actions turn into numbers.
Numbers tell a story. Numbers tell how good or bad were the decisions you made in the first place.
So, if you want to improve your decision-making process, you need to be on top of the numbers. Because if your numbers signal that a particular decision or a choice was not good for business, you can choose differently.
Remember,
Metrics Matter.
AND
Financial Data Drives Decisions.
Myth 5 | It’s My Accountant’s Job, Not Mine
I hear so many female entrepreneurs say,
“Shishir, I don’t look at the money side of the business. I ask my accountant what to do and then I do it.”
It is as if your babysitter is deciding what is in the best interest of your child.
If you won’t do it for your child, why would you do it for your money?
I believe, You can get help, and outsource the task of managing money, but you cannot outsource the responsibility of managing money, because it’s your money.
You can have all the inspiration in the world, work on your money mindset, but if you don’t know numbers in your business, most likely you will lose.
Instead of using an accountant, financial coach to help you on the financial side of the business, how about they become just an extra pair of eyes who are looking over your shoulder as a co-passenger rather than a back seat passenger and you are driving your money side of the business forward.
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If you like videos more than words, then I published a video with the same content, you might want to check it out below.
