INSIGHT business coaching
The 2 Most Damaging Lies Business Owners Tell Themselves Business owners must constantly evaluate their financial situations and have systems and processes in place to avoid a professional crisis BY LUANN NIGARA
A
t some point, we all tell ourselves sneaky little lies in our personal life. You know what I mean… “On Monday, I’m starting back at the gym (for real this week)” or “I’m making my coffee at home every morning and breaking my standing date with Bonnie the Barista.”
expenses you have every month whether you have five, 50 or 500 projects. You must know your baseline number. As my friend Alinda Morris of Alinda Morris Interior Design in Gig Harbor, WA, said to me on my podcast, “If I don’t hit my cost to be open number every week, I’m just borrowing money from my own family to run my business.”
But what happens when we lie to ourselves about our businesses? Does it matter, or is it like the gym: no one knows, no one cares? Well, it can matter a great deal, depending on the lie. Some of these lies are not critical to our success. It is possible to coast along for years without facing these kinds of lies in the mirror. However, some lies really do affect our business at a fundamental level. Certain areas in business cannot be ignored or you will not be profitable. And understand very clearly, there is a huge difference between existing year after year versus being a vibrant, money-making business. If you are running a business, not a hobby, these are the two most destructive lies you can tell yourself.
Sit with this statement. Do you see how true it is? When you are not profitable, you are borrowing from your family vacation fund. You are borrowing from your retirement egg. You are borrowing from yourself.
My finances are in order
Believe me, I would be one of the many business owners who wouldn’t have known how or why to measure these things. I understand how easy it is to think, “There’s money in the bank, I
Do you know your “cost to be open” number? This is the finite dollar amount it costs to run your business. These are the 22 | wf-vision.com | September + October 2019
Do you know your gross and net profit margins? Do you know the difference between them? Do you evaluate every single project at completion for profitability? Do you have specific sales goals defined by day, month and year? Without your cost to be open number and absent defined sales goals, it is truly impossible to know if you are on track, headed to a brick wall or having a banner year.
