Here are the top 10 money mistakes creative entrepreneurs make when starting their own businesses:
- Not Getting Your Personal Finances in Order. Why it’s a mistake: If you don’t ensure your personal finances are rock solid, it will directly impact the success of your creative venture. Why? Although we hear financial experts tell us to keep our business and personal finances separate, the truth is that it’s impossible for them not to influence each other. If you have careless, sloppy personal money habits, it will affect your creative business. If your business is having a terrible quarter, that directly impacts your personal bottom line. The best money move you can make for your business is to ensure that your personal financial situation is on solid ground.
- Ignoring Your Best Employee: Money. Why it’s a mistake: If you neglect to spend regular time managing business finances, you’re never going to succeed at high level in your creative business. Imagine if you worked for a company, and every time you went to talk to your boss to find out what he wanted you to work on, he ignored you or hid under his desk. How productive would you be without your boss’ guidance or direction? Well, are you hiding from or ignoring your business finances? Money wants to be managed and directed! And it only takes a small amount of regular time weekly and monthly to ensure your best employee, Money, is properly managed and productive.
- Undervaluing Your Products & Services. Why it’s a mistake: When you doubt the worth of your products and services, your customers will pick up on that and buy from someone else. Have other people told you that your prices are too low? Believe them! When your prices are rock bottom, potential customers will think that you aren’t offering much of value. Shop your competition and if your prices are more than 10% lower, it’s time to raise them! My coaching rates are more than double what they were at the beginning of the previous year. I’ve had more coaching appointments in the first four months of this year than I had all of last year! Why? Because my ideal clients see me as valuable and my price reflects that.
- Trying to Go It Alone. Why It’s a Mistake: Hey, even the Lone Ranger had Tonto for assistance and companionship! Being self-employed shouldn’t mean you’re alone. I strongly recommend having a tribe of other creative entrepreneurs that you can turn to for advice and support. You should also have a “Financial Board of Advisors” – a banker, CPA, a money coach, insurance agent, and business attorney who can advise you on important issues like taxes, contracts, and small business loans.
- Borrowing Money Indiscriminately. Why It’s a Mistake: You need to proceed with caution when using debt in your business. Borrowing money to invest in cash producing assets is one thing. But using credit to purchase things that don’t produce profit or to “keep the business afloat” is risky to your financial health.
- Chasing the Shiny Objects. Why It’s a Mistake: Time is money, so you better manage your distractions! It’s important to learn to focus and spend time on the activities in your business that make you money. If your energies are scattered, you will feel depleted without seeing much progress. Decide on the three or four things that are most important for the success of your business and spend the majority of your time there.
- DIY-ing Everything to Save Money. Why it’s a Mistake: When entrepreneurs are first starting out and don’t have much capital in the business, they do everything themselves: the sales, the marketing, the website maintenance, customer service, and so on. But I have learned from personal experience that you save both time and money by hiring a pro – and you get a better-quality outcome. If I pay my Virtual Assistant to rebrand my PowerPoint presentations, I now have time freed up to talk with potential clients and create content. This creates income so I can grow my business and pay my VA to create beautiful presentations for me.
- Failing to Invest in Personal & Professional Growth. Why it’s a Mistake: Each new level in your business will require a new you. You have to learn more to earn more! You will need to increase your skills and your mindset to take your business to new levels of success. Where do you want your business to be in 1 year, 3 years, 5 years? What kind of person do you need to become in order to accomplish this? Every time I make progress in my business it’s because I’ve leveled up my skills and mindset through trainings, courses, and coaching.
- Ignoring Your Personal Brand. Why It’s a Mistake: Of course, you have a brand for your business, but as an entrepreneur, you’re never really off the clock. You represent your business 24/7. So, it’s important that you maintain a professional image personally as well. The way you dress, your body language, speech, and social media posts are either increasing or decreasing the odds that people will hire you and your company.
- Failing to Follow Up. Why It’s a Mistake: You’re leaving money behind if you don’t follow up. And not just once, but multiple times. 80% of sales are made on the 5th to 12th contact with a prospect, yet only 10% of people make more than 3 contacts. The fortune is in the follow up!